FULL YEAR RESULTS TO 31 MARCH 2024
"This has been a transformational year for us with two M&A transactions doubling our portfolio to £6 billion. Our financial performance again reflects our sectorial focus, strength of our portfolio and the efficiency with which it is run. Our material earnings growth allowed us to again increase our covered dividend by 7.4%."
Andrew Jones, Chief Executive
Highlights
Focus on winning sectors and transformational M&A drives rents, earnings and dividend growth
- Net contracted rent increased over the year from £145m to £340m as a result of merger activity
- Net rental income increased 20.6% to £177.1m and 21.7% on an IFRS basis
- EPRA earnings up 20.3% to £121.6m, +5.4% on a per share basis
- EPRA cost ratio improved to 11.6%, guiding to 8% for FY 2025
- Dividend increased 7.4% to 10.2p, 107% covered by earnings, including Q4 dividend declared today of 3.0p
- Continued dividend progression with Q1 2025 dividend expected to be 2.85p (Q1 FY24: 2.4p), an increase of 18.8%, and in line with target to pay a 12 pence per share dividend for the full year
Portfolio returns driven by strong income performance
- Total property return +4.7%, outperforming IPD by 570bps
- ERV growth of 5.7% absorbed yield expansion of 26 bps resulting in a broadly flat valuation
- EPRA NTA per share of 191.7p (-3.6%) largely due to one-off merger transaction costs
- IFRS reported profit of £118.7m (31 March 2023: loss of £506.3m)
Portfolio aligned to structurally supported sectors of logistics, convenience, healthcare and entert
- Portfolio value of £6.0bn doubled as a result of merger activity (31 March 2023: £3.0bn)
- £2.9bn added through the LXi merger and £0.3bn added through the CTPT acquisition
- £185m of disposals in year with a WAULT of six years, sold at 1% discount to prevailing book value
- Post year end, £51m of urban logistics acquired and £75m of sales, mainly retail and offices
- Logistics represents 43% of the portfolio and is expected to rise to above 50% over the next year
Activity enhanced portfolio quality and strengthened long and strong income characteristics
- Occupancy of 99.4%, WAULT of 19.4 years (31 March 2023: 11.9 years) and gross to net income ratio of 99.0%
- Contractual rental uplifts on 79% of income, embedded reversion on logistics with ERVs 26% ahead of passing rent
- 85% of portfolio EPC A-C rated and 0.8 MWp of solar PV added in year, with further 3.1MWp completed since
Strong occupational activity delivered +£7.5m pa contracted income, 5.5% like for like income growth
- Rent reviews +19% on a five yearly equivalent basis, urban logistics open market reviews +40%
- Regears achieving rental uplift of 23% with urban logistics regears +37%
- Income uplift expected over next two years of £23m from rent reviews and regears
Strong financial position
- LTV of 33.2% with weighted average debt maturity of 5.4 years and cost of debt at 3.9% (100% hedged)
- Post merger refinancing resulted in cheaper financing costs and scale is expected to drive further debt cost benefits