LONDONMETRIC PROPERTY PLC
(“LondonMetric” or the “Group” or the “Company”)
FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2023
Strong operational performance drives EPRA earnings and dividend growth
LondonMetric today announces its full year results for the year ended 31 March 2023.
| EPRA1,2 | IFRS | |||
| Income Statement | FY 2023 | FY 2022 | FY 2023 | FY 2022 |
| Net rental income (£m) | 146.8 | 133.1 | 144.1 | 130.0 |
| Earnings/Reported (Loss)/Profit (£m) | 101.1 | 93.5 | (506.3) | 734.5 |
| Earnings per share (p) | 10.33 | 10.04 | (51.8) | 78.8 |
| Dividend per share (p) | 9.50 | 9.25 | 9.50 | 9.25 |
| EPRA1,2 | IFRS | |||
| Balance Sheet | FY 2023 | FY 2022 | FY 2023 | FY 2022 |
| Net tangible assets (NTA)/ Net Assets (£m) | 1,956.2 | 2,559.6 | 1,995.2 | 2,569.8 |
| NTA/ Net Assets per share (p) | 198.9 | 261.1 | 203.7 | 262.3 |
| LTV (%) | 32.8 | 28.8 |
1. Including share of joint ventures, excluding non-controlling interest
2. Further details on alternative performance measures can be found in the Financial Review and definitions can be found in the Glossary
Continued focus on reliable, repetitive and growing income drives earnings and dividend growth
· Net rental income increased 10.3% to £146.8m, IFRS basis increased 10.8%
· EPRA earnings up 8.1% to £101.1m, +2.9% on a per share basis
· EPRA cost ratio down 80 bps to 11.7%
· Dividend increased 2.7% to 9.5p, 109% covered by earnings, including Q4 dividend declared today of 2.6p
· Dividend progression to continue, Q1 2024 dividend expected to increase by 4.3%
Portfolio valuation movement reflects deterioration in macro investment backdrop
· Portfolio value of £3.0bn (31 March 2022: £3.6bn)
· Total property return -12.0%, capital return -15.7%
· Yield expansion of 107 bps, ERV growth of 8.4% resulting in revaluation of -£587.5m (31 March 2022: +£632.2m)
· EPRA NTA per share of 198.9p (-23.8%)
· IFRS reported loss of £506.3m (31 March 2022: £734.5m profit)
Occupational market strong, delivering +£7.8m pa contracted income and 5.0% like for like income growth
· Rent reviews +16%, urban logistics reviews +21%
· Lettings signed with WAULT of ten years, regears achieving rental uplift of 21%
· Rent reviews over next two years expected to add £11m pa of contracted income
Activity continues to strengthen portfolio’s income characteristics and quality
· Occupancy remains high at 99.1%, WAULT of 11.9 years and gross to net income ratio of 98.9%
· Contractual rental uplifts on 63% of portfolio, material embedded reversion on urban where ERV is 25% ahead of current
· EPC A-C rating improved to 90% of portfolio, with 31% BREEAM Very Good or Excellent
Distribution weighting at 73.1%, including urban logistics at 43.1%
· £273m of disposals with a WAULT of seven years, sold at 1% premium to prevailing book value
· £120m of acquisitions with a WAULT of 14 years
· Post year end, further £21.6m of sales, including today’s separately announced disposal of a DHL warehouse
Balance sheet well positioned
· LTV of 32.8% with weighted average debt maturity of 6.0 years and cost of debt at 3.4% (93% hedged)
· New facilities of £275m in year with maturity lengthened on £400m. Post year end, £400m of debt extended
· Undrawn facilities of £380m, refinancing risk mitigated until FY 2027
Recommended Offer for CT Property Trust Limited
· LondonMetric has today separately announced a £198.6m recommended offer for CT Property Trust Limited
Andrew Jones, Chief Executive of LondonMetric, commented:
“The last year has seen a weaker economic backdrop, elevated inflation and a significantly higher interest rate environment. Not surprisingly, this has led to a recalibration of real estate values and conditions that have undoubtedly impacted our approach to leverage and interest rate exposure.
“Whilst risks and uncertainty remain, the outlook is improving and some confidence is returning. History teaches us that periods of uncertainty always pass and eventually inflation will be tamed and interest rates will stabilise. What is even clearer is that the strong occupational fundamentals supporting our chosen sectors remain intact. Broadening occupational demand and constrained supply are creating ideal conditions for continued rental growth, particularly for our urban warehouses, which remain our strongest conviction call. This has helped us to again report attractive like-for-like income growth, earnings and dividend growth as well as maintain our strong portfolio metrics.
“Looking forward, we have a strong conviction that our portfolio is firmly positioned on the right side of the long term structural shifts and that it will continue to generate reliable, repetitive and growing income to deliver on our progressive dividend policy.”