Half Year results for the six months ended 30 September 2023.
LONDONMETRIC PROPERTY PLC
(“LondonMetric” or the “Group” or the “Company”)
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023
Portfolio alignment to structurally supported logistics and long income delivers continued earnings and dividend growth
LondonMetric today announces its half year results for the six months ended 30 September 2023.
| EPRA1,2 | IFRS | |||
| Income Statement | H1 2024 | H1 2023 | H1 2024 | H1 2023 |
| Net rental income (£m) | 76.9 | 72.1 | 76.0 | 70.5 |
| Earnings/Reported Profit/(Loss) (£m) | 53.1 | 50.2 | 81.0 | (243.4) |
| Earnings per share (p) | 5.25 | 5.14 | 8.0 | (24.9) |
| Dividend per share (p) | 4.8 | 4.6 | 4.8 | 4.6 |
| EPRA1,2 | IFRS | |||
| Balance Sheet | H1 2024 | FY 2023 | H1 2024 | FY 2023 |
| Net tangible assets (NTA)/Net Assets (£m) | 2,178.5 | 1,956.2 | 2,222.5 | 1,995.2 |
| NTA per share (p) | 199.6 | 198.9 | 204.5 | 203.7 |
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
Focus on the winning sectors drives earnings and dividend growth
· Net rental income increased 6.7% to £76.9m, +7.8% on an IFRS basis
· EPRA earnings up 5.8% to £53.1m, +2.1% on a per share basis
· EPRA cost ratio down 80 bps to 11.5%
· Dividend progressed 4.3% to 4.8p, 109% covered by earnings, including Q2 dividend declared today of 2.4p
· Continued dividend progression expected for full year supported by earnings
Portfolio valuation stabilised reflecting liquidity in our sectors
· Portfolio value of £3.2bn (31 March 2023: £3.0bn)
· Total property return +3.2%, capital return +0.7%
· Yield expansion of 10 bps offset by ERV growth of 1.8% delivering a revaluation uplift of 0.1% (+0.8% with CTPT discount)
· EPRA NTA per share +0.4% to 199.6p underpinning a total accounting return of 2.8%
· IFRS reported profit £81.0m (30 September 2022: £243.4m loss)
Strong occupational activity delivered +£3.6m pa income and 2.9% like for like income growth
· Rent reviews +19% on a five yearly equivalent basis with urban logistics reviews +35%
· Lettings signed with WAULT of 13 years with regears achieving +28%
· Further £2.8m p.a. uplift from PPE deals agreed and completed
Activity continues to maintain portfolio’s long and strong income characteristics and quality
· Occupancy remains high at 99%, WAULT of 11 years and gross to net income ratio of 99%
· Contractual rental uplifts on 59% of portfolio’s income
· Significant embedded reversion with portfolio expected to generate £15m p.a. of rental uplift over next 2-3 years
· 86% of portfolio EPC A-C rated, 31% BREEAM Very Good or Excellent and 0.6 MWp of solar added in period
Portfolio aligned to structurally supported sectors
· Distribution weighting at 71.7% (urban logistics at 43.2%) and long income at 23.5%
· £157m of disposals (including PPE) with a WAULT of 7 years, sold at 0.3% below prevailing book
· £285m CT Property Trust portfolio acquired at a discount and actively managing with strong reversion
Strong financial position with reduced LTV
· LTV fallen from 32.8% to 29.5% and cost of debt from 3.4% to 3.3%
· Debt maturity increased to 6.2 years with no refinancing requirement until FY2027 and 99.5% of drawn debt hedged
Andrew Jones, Chief Executive of LondonMetric, commented:
“Financial markets continue to be defined by elevated interest rates and higher borrowing costs. This is severely impacting liquidity across the real estate sector and exacerbating a polarisation in performance. We expect this to continue with refinancings and redemptions putting further downward pricing pressure in legacy sectors. We are, however, more confident that structurally supported assets with better income security and positive rental trajectory will enjoy better price stability.
“Against this backdrop, we have continued to be active and opportunistic, looking to sell mature and non-core assets and remaining alert to quality opportunities that are being mis-priced by either the real estate or stock markets. During the period we successfully concluded the £285 million portfolio acquisition of CT Property Trust and to date have disposed of £157 million of assets across our portfolio.
“As a result, our portfolio is in great shape and its alignment to well positioned triple net income assets has helped to deliver a positive set of financial results, further increasing our net rental income, earnings per share and covered dividend. This puts us on track for a ninth consecutive year of dividend progression; a performance that puts us in a rarefied club.
“Looking forward, we will continue to allocate capital to sectors that are benefiting from evolving consumer behaviours which provide an attractive tailwind for returns and dividend growth. We remain alert, interested and open minded to using our strong financial position to access new opportunities where the market is unfairly discounting and where our proactive approach can deliver growth and value.”