LONDONMETRIC PROPERTY PLC
(“LondonMetric” or the “Group” or the “Company”)
FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2024
Portfolio alignment to structurally supported sectors delivers continued
earnings and dividend growth in a transformational year for the Group
LondonMetric today announces its full year results for the year ended 31 March 2024.
| EPRA1,2 | IFRS | |||
| Income Statement | FY 2024 | FY 2023 | FY 2024 | FY 2023 |
| Net rental income (£m) | 177.1 | 146.8 | 175.3 | 144.1 |
| Earnings/Reported Profit /(Loss) (£m) | 121.6 | 101.1 | 118.7 | (506.3) |
| Earnings per share (p) | 10.9 | 10.3 | 10.6 | (51.8) |
| Dividend per share (p) | 10.2 | 9.5 | 10.2 | 9.5 |
| EPRA1,2 | IFRS | |||
| Balance Sheet | FY 2024 | FY 2023 | FY 2024 | FY 2023 |
| Net tangible assets (NTA)/ Net Assets (£m) | 3,908.9 | 1,956.2 | 3,969.5 | 1,995.2 |
| NTA/ Net Assets per share (p) | 191.7 | 198.9 | 195.2 | 203.7 |
| LTV (%) | 33.2 | 32.8 | ||
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
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 entertainment· 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
Andrew Jones, Chief Executive of LondonMetric, commented:
“This has been a transformational period for our Company with the successful execution of two M&A transactions. We have doubled the size of our portfolio to £6 billion, creating the UK’s leading triple net lease REIT and the third largest UK REIT by market capitalisation. Scale and income granularity are increasingly important and our activity has further enhanced our sector leading income metrics with reliable, predictable and exceptional income growth.
“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% and gives us confidence to increase our Q1 dividend for FY 2025 by 19%. This will be our tenth year of dividend progression; a performance that allows us to be called a dividend achiever.”
“We are a thematic triple net income investor in structurally supported sectors with high quality assets that enjoy strong occupier contentment. Logistics remains our strongest conviction call for accelerated rental growth, particularly urban logistics, and this weighting is expected to increase materially as we reinvest proceeds from non core and ex-growth asset sales, with approximately £180 million already sold or under offer since year end.
“We are fully aligned to shareholders with a shared mission and will be ruthlessly efficient in how we operate our business and how we allocate capital in our quest towards dividend aristocracy.”