Picton Property Income Ld Share Discussion Threads

[speedsgh] 12/11/2020 12:43

Pretty impressive results in view of the circumstances. They managed to turn a profit, EPRA NAV unchanged at 93p since Mar 20 and dividend cover of 129% excluding additional income (admittedly after a dividend reduction)...

Half Year Results -

Financial Highlights

~ EPRA earnings of £10.1 million
~ Profit of £3.7 million
~ Net assets of £506 million, or 93p per share
~ Total return of 0.7%
~ Dividend cover of 148%
~ Loan to value ratio of 22%
~ £50 million available through new undrawn revolving credit facility

Operational Highlights

~ Total property return of 1.5%, outperforming the MSCI UK Quarterly Property Index of -1.6%
~ Occupancy increased to 90%
~ Nine lettings completed, securing £1.2 million per annum, 2.8% ahead of March 2020 ERV
~ 16 lease renewals / regears completed, retaining £2.3 million per annum, 14.3% above March 2020 ERV
~ Five rent reviews completed, securing an uplift of £0.3 million per annum, 16.3% above March 2020 ERV
~ Additional income of £1.3 million received from asset management initiatives
~ Retail and Leisure exposure reduced to 12% from 18% of the total property portfolio

Rent Collection

~ Received 90% of the March quarter’s rent, expected to rise to 96% under agreed deferred payment plans
~ Received 90% of the June quarter’s rent, expected to rise to 93% under agreed deferred payment plans
~ To date 93% of the September quarter’s rent has been collected or is expected to be received under monthly payment plans

Subsequent Events

~ Dividend increased by 12% to 2.8p per share effective November 2020
~ Completed a further £0.4 million per annum of lettings, 2.4% above September 2020 ERV, including the first letting at Stanford Building, WC2
~ Good leasing pipeline with approximately £0.7 million per annum of transactions agreed, subject to contract, across industrial, office and retail sectors

Picton Chairman, Nicholas Thompson, commented:

“Picton has delivered a profit in what has undoubtedly been a challenging period. Cognisant of this performance and the overall strength of the balance sheet, we felt it was appropriate to take the first step in restoring the dividend to pre-Covid levels by announcing a 12% increase, effective November 2020.”

Michael Morris, Chief Executive of Picton, commented:

“We have delivered robust progress at a portfolio level and rent collection in excess of 90%. As well as improving occupancy, generating additional income to offset Covid-19 impacts and completing some key asset management projects, we have also increased our weightings to the better performing industrial and office sectors.”

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Our EPRA earnings for the period are similar to last year. Despite lower than usual rent collection we have been able to offset this with additional one-off income from active management initiatives, whilst reducing both property and administrative costs relative to this period last year.

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Dividend cover for the six months was 148%, or 129% excluding additional income. Recognising our rent collection performance and high dividend cover we have decided to increase the dividend by 12% to 0.7 pence per quarter, effective from the November payment which is a first step in restoring the dividend to its previous level.

[spectoacc] 26/10/2020 19:07

Thanks @nickrl, didn't realise the Covent Gdn one vacant.

There's a few have nudged divi back up (or reinstated) but I take issue with PCTN trumpeting it as a "12% increase" :)

[nickrl] 26/10/2020 19:02

These were carrying a fair void cost at year end but they've off loaded a Peterborough asset which had one void and an imminent loss of TK Maxx in Mar 21 so that will help but the reclassified W.End office in Covenant Gdn still vacant. They also have c22% of the NRI subject to break/expiry Apr20 to Apr22 ordinarily a positive but who knows in this environment so void costs could worsen. Negative comments out the way these are the first to increase a previously reduced dividend so BoDs must be confident they can maintain rental collection around 85-90% to cover it. As Specto says yield a paltry 4.6% at close but can't see much more upside on divi from here until things improve.

[skyship] 26/10/2020 15:50

HEADER updated...

[hugepants] 26/10/2020 15:05

Yep it doesn't stack up very well against say SLI which has a similar portfolio

[spectoacc] 26/10/2020 08:19

As always, spoilt for choice, but PCTN reminds me a lot of UCKM. Large (half a billion quid of property), low LTV (half what some have), but poxy yield. A 12% increase of squat is still squat :)

4.5% yield now I reckon? Claim very low retail exposure but helped by reclassifying one asset from High St Retail to West End Office. Either canny property management, or canny classification.

49% industrial, ought to be on a better yield IMO.

I like PCTN - and UKCM - both seem conservative and "cheap" in any normal scenario. But neither stack up that well against everything else on offer atm.

[nickrl] 04/8/2020 17:21

What troubles me about AEWU is they've disposed of there biggest asset - yes at good price but they've lost the income stream so unless they tap into the cash they received can't see them raising the divi. I let that issue blight me at the time for dipping in so gone up too imo now. However, what im seeing in many of these is an up trend for a few weeks following good news then a slow drift back so will keep an eye on it.

[2wild] 04/8/2020 16:00

Despite it's 15% rise since I posted here just over a week ago, AEWU still looks great value with 8.6% covered yield (9.6% actual), super low LTV of 13.5% and 2.05% cost of debt including hedging.

[skyship] 04/8/2020 14:43

nickrl

Bizarrely, no shortage of good income plays.

RECI for sure. At 127p, with the covered and retained 12p dividend the yield = 9.45%

INLZ - a ZDP. At 153.5p the GRY (YTM) = 7.5%

AIRE - as you know, another propco, but trading at a well covered, reduced dividend yield of 6.3% and a 41% NAV discount. IMO the Divi likely to be higher than the 3.3p conservatively stated.

[nickrl] 24/7/2020 09:22

Can't fault there transparency on rental collection. They set the standard template others should adopt. As Sky says a tad too pricey still but given there relatively stable share price compared to others maybe that the price I have to accept to get some income without risking capital erosion.

[2wild] 24/7/2020 08:59

Or compair to AEWU 11% yield, 13.5% net LTV, 2% cost of debt and 20% discount to NAV. This quarters div is not fully covered but still 9.5% annualised on a 100% covered basis.

[skyship] 24/7/2020 08:06

Agreed, a reasonable set of results, but that's about all. The valuation does rather benefit from PCTN's past reputation of a safe pair of hands. The 25% notional NAV discount & low 3.8% yield certainly doesn't work for me; perhaps more of an institutional HOLD.

Compare the stats to EPIC's well covered 7.8% yield and 43% discount.

[nickrl] 23/6/2020 15:10

Daniel going forward they've lowered the divi to annualised 2.5p v 3.5p which is prudent but high entry point imo for that yield but depends on your view on whether they will recover rental value back to previous levels anytime soon

[danielbird193] 23/6/2020 12:58

Thanks, I hadn't spotted it was results day. I have been burying my head in the sand a bit in respect of my property exposure, but PCTN has always been a quality operator and that quality has shone through in the recent crisis.

While they haven't been immune from the struggles of the wider commercial property sector, the fact that their NAV per share has held steady over the year we've just had shows real skill from management. In particular, selling assets above book value and using the proceeds to pay down debt seems to have been a sensible move in the current environment. The company's leverage ratio is modest and the fact they've maintained the dividend shows there isn't an imminent cash crunch.

I continue to be a happy holder here.

[nickrl] 23/6/2020 10:32

Reasonable set of results and good detail on rent collection actions to recover the defect (mainly retail/leisure) but overall is 82% collected with another 9% on revised terms (when they get cash isn't clear though!). LTV is in good shape at 22% and they had already flagged a divi reduction from 3.5 to 2.5p for this year which if they maintain c80% in June qtr is covered but thats 3.6% at current share price There vacant properties are costing them £3m a year although i suspect its mainly the Covenant Garden asset but does indicate the scale of the threat to London centric propco's if vacancies end up on there books.

Should have had a nibble when it was sub 60p a few weeks back as it will attract interest interest I suspect with its reasonable broad portfolio.

[bscuit] 29/4/2020 23:01

Following on from the English rent shortfall at the last rent date do we know the percentage by rent roll of the Scottish/NI properties?

[speedsgh] 20/3/2020 07:28

Picton completes trio of lettings -

Picton today issues an update on the portfolio following the completion of a series of office leases, which add a total of £0.9 million of annual income to the headline rent roll. The transactions follow the completion of recent refurbishment works.

Metro Building, Salford Quays - Let the 4th floor to HM Government on a 20-year lease subject to break in 2030 at £0.4 million per annum, which was in line with the December 2019 ERV.

180 West George Street, Glasgow - Let the 3rd floor on a 10-year lease, subject to break in 2025, at £0.2 million per annum, which was in line with the December 2019 ERV.

Tower Wharf, Bristol - upsized an existing occupier and extended a lease which was due to expire in May 2020. This increased their floor space by 73% and secured a new 15-year lease, subject to break in 2030, at a rent of £0.5 million per annum, which was in line with the December 2019 ERV and £0.3 million ahead of the previous passing rent.

The Company will provide a trading update in April 2020.

Michael Morris, Chief Executive of Picton, commented:

“To have recently concluded three significant long-term leases following our refurbishment of these spaces is encouraging.

Our immediate priority is ensuring the health and safety of our occupiers, employees and other partners, as we seek to minimise the impact of the COVID-19 virus. We are continuing to work with our occupiers to help them navigate these uncertain times.

We have a strong balance sheet with primarily long-dated debt, a low LTV of 22% and access to more than £41 million of funding in two undrawn debt facilities.”

[speedsgh] 03/2/2020 11:28

Dividend Declaration -

Picton today announces an interim dividend payment in respect of the financial
period from 1 October 2019 to 31 December 2019, of 0.875 pence per share.

The dividend timetable is set out below:

Ex-Dividend Date - 13 February 2020

Record Date - 14 February 2020

Pay Date - 28 February 2020

The dividend of 0.875 pence per share will be designated as a property income
distribution ('PID').

[speedsgh] 03/2/2020 11:27

Net Asset Value as at 31 December 2019 -

NAV growth and strengthened balance sheet through debt reduction

* Net assets increased to GBP519.1 million (30 September 2019: GBP510.7 million).
* NAV/EPRA NAV per share rose 1.7% to 95.2 pence (30 September 2019: 93.6
pence).
* Total return for the quarter of 2.6% (30 September 2019: 1.6%).
* LTV reduced to 22.4% (30 September 2019: 24.5%).

Dividend declared

* Dividend of 0.875 pence per share declared and to be paid on 28 February
2020 (30 September 2019: 0.875 pence per share).
* Annualised dividend equivalent to 3.5 pence per share, delivering a
dividend yield of 3.5%, based on 30 January 2020 share price.
* Dividend cover for the quarter of 114% (30 September 2019: 114%).

Further valuation uplift driven by asset management

* Like-for-like increase in property portfolio valuation for the quarter of
1.4% (30 September 2019: 0.7%) driven primarily by industrial and regional
office sector gains.
* GBP3.3 million invested in over 10 refurbishment and repositioning projects.
* Secured an average increase of 11% against the September ERV from nine
lease events (renewals, regears and one rent review), with a combined
annual rent of GBP3.0 million.
* Completed nine lettings on average 3% ahead of the September ERV, with a
combined annual rent of GBP0.5 million.
* Agreed to pre-lease Shipton Way, Rushden, to Whistl UK Limited at an annual
rent of GBP1.6 million who will become the Company's largest single occupier
from October 2020, when the existing occupier vacates.
* Completed the disposal of an office building in Croydon for GBP18.2 million.
* Stable occupancy of 88% (30 September 2019: 88%).

Nick Thompson, Chairman of Picton, commented:

"We have delivered another positive uplift in net assets, whilst at the same
time reducing borrowings and increasing the amount available under our
revolving credit facilities to capitalise on any emerging opportunities."

Michael Morris, Chief Executive of Picton, commented:

"The asset management activity over the quarter, driven by a number of key
leasing and regear transactions, has delivered further growth. Our primary
focus is our refurbishment programme and corresponding leasing activity to
drive both income and value."

[skyship] 12/11/2019 21:17

90% as at Mar'19

[sleepy] 12/11/2019 20:53

From last years half year results:

“As anticipated, there was a reduction in occupancy over the period from 96% to 94%. The decrease, which we expect to be short term”

[speedsgh] 12/11/2019 07:57

Half Year Results -

Picton announces its half year results for the period to 30 September 2019.

Continued Growth in Net Assets
* Profit after tax of £14.5 million
* Total return of 2.8%
* Increase in EPRA net asset value per share of 0.9%, to 94 pence per share

Strengthened Balance Sheet
* Raised £7.1 million of new equity at a 1.9% premium to the March net asset value
* Repaid £7.6 million of borrowings
* Loan to value ratio reduced to 24.5%
* Dividend cover of 107%

Outperforming Property Portfolio
* Total property return of 3.2%, outperforming the MSCI UK Quarterly Property Index of 0.8%
* Total property return and income return outperforming MSCI over 1, 3, 5 and 10 years
* Like-for-like valuation increase of 1.2%, driven by industrial and office sectors
* 14 lettings completed with a rent roll of £1.5 million per annum
* 20 lease renewals completed with a rent roll of £1.2 million per annum
* 12 rent reviews completed securing an uplift in rent of £0.5 million per annum

Investing for Income and Capital Growth
* £2.8 million invested in refurbishment projects
* Occupancy of 88%
* 79% of the void space under refurbishment
* £9.4 million of reversionary potential

Picton Chairman, Nicholas Thompson, commented:

“During the last six months we have been able to further strengthen our balance sheet, increasing net assets and maintaining a covered dividend. Our June fundraising has enabled us to continue to invest into our portfolio, enhancing the quality of our assets for occupiers and shareholders alike.”

Michael Morris, Chief Executive of Picton, commented:

“There has been an encouraging level of activity in the portfolio over the past six months. With an estimated £9.4 million of reversionary potential to be unlocked, we believe there is significant upside to come from refurbishment and leasing initiatives.”...

[petewy] 08/11/2019 14:49

Results Tuesday

[speedsgh] 17/9/2019 09:23

Portfolio Update -

Picton (LSE: PCTN), is pleased to provide an update on the portfolio following a period of significant activity since its June NAV update.

Progress has been made across all sectors with the completion of 20 asset management initiatives including lettings, lease renewals, regears and rent reviews. These have a combined annual rent of £2.4 million per annum and were agreed on average 4% ahead of the June 2019 estimated rental values (ERVs).

In addition, the Company has started to deploy the capital raised in June, having completed two refurbishment projects, where occupiers have been identified and terms agreed in principle. Projects have commenced at a further seven assets, all of which are aimed at enhancing occupancy and rental income.

A further update will be provided in the Company’s interim results to 30 September 2019 which are expected to be released in November.

Michael Morris, Chief Executive of Picton, commented:

“We have been encouraged by the level of portfolio activity over the traditionally quieter summer period, especially given the current political backdrop. Since raising capital to invest in the portfolio in June, we have made significant progress on the identified projects and have already both attracted and retained new and existing occupiers, improving the income profile. We are continuing to invest in our portfolio and unlock future opportunities to improve occupancy and rental income.”

The principal activity across sectors is as follows......

[speedsgh] 29/7/2019 09:39

Dividend Declaration -

Picton (LSE: PCTN), today announces an interim dividend payment in respect of
the financial period from 1 April 2019 to 30 June 2019, of 0.875 pence per
share.

The dividend timetable is set out below:

Ex-Dividend Date - 8 Aug 2019

Record Date - 9 Aug 2019

Pay Date - 30 Aug 2019

The dividend of 0.875 pence per share will be designated as a property income
distribution ('PID').