Picton Property Income

LN: PCTN

£511.5m market cap

93.4p last close

Picton Property Income is an internally managed UK REIT that invests in a diversified portfolio of commercial property across the UK. It is total return driven with a strong income focus and aims to generate attractive returns through pro-active management of the portfolio.

Investment summary

Good results for the year to 31 March 2019 (FY19) saw an EPRA NAV total return of 6.5%, comprising a 2.6% increase in EPRA NAV per share to 93p and aggregate quarterly DPS paid of 2.5p. Dividends were covered 1.22x by EPRA earnings. The property portfolio delivered an ungeared total return of 7.5% compared with the MSCI Quarterly Property Index return of 4.6% and it has outperformed the Index over one, three, five and ten years. Returns are benefitting from an overweighting of industrial and offices properties and an underweighting of retail and leisure. The current year will see a focus on asset management projects aimed at capturing strong reversionary rent potential, enhancing the quality of the assets and generating additional value. Income will be temporarily reduced until these complete but given the strength of dividend cover we expect no impact on DPS. The £7.1m proceeds from a placing of new shares will provide funding, and additionally flexibility for acquisition opportunities that may emerge. Our forecasts are under review.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2018A 38.4 N/A 23.1 4.19 22.3 19.7
2019A 38.3 N/A 23.4 4.25 22.0 19.9
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Last updated on 25/07/2019
Industry outlook

The supply demand balance for regional office and industrial property remains generally firm, and a positive yield spread between the regions and London offers potential for further narrowing. Parts of the retail sector are displaying clear signs of stress.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (£m) 173.4
Forecast gearing ratio (%) 35
Price performance
%
1m
3m
12m
Actual (3.8) 1.0 3.6
Relative* (4.9) 0.5 6.4
52-week high/low 98.6p/79.4p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD

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