LONDONMETRIC PROPERTY PLC
(“LondonMetric” or the “Group” or the “Company”)
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Strong operational performance drives EPRA earnings and dividend growth
LondonMetric today announces its half year results for the six months ended 30 September 2022 .
| EPRA 1,2 | IFRS | |||
| Income Statement | H1 2023 | H1 2022 | H1 2023 | H1 2022 |
| Net rental income (£m) | 72.1 | 63.5 | 70.5 | 61.8 |
| Earnings/Reported (Loss)/Profit (£m) | 50.2 | 44.2 | (243.4) | 254.1 |
| Earnings per share (p) | 5.14 | 4.87 | (24.90) | 28.01 |
| Dividend per share (p) | 4.6 | 4.4 | 4.6 | 4.4 |
| EPRA 1,2 | IFRS | |||
| Balance Sheet | H1 2023 | FY 2022 | H1 2023 | FY 2022 |
| Net tangible assets (NTA) (£m) | 2,250.8 | 2,559.6 | 2,269.8 | 2,559.7 |
| NTA per share (p) | 229.3 | 261.1 | 232.1 | 262.3 |
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 13.5% to £72.1m, on an IFRS basis increased by 14.1%
· ERV growth of 4.3% over the period
· EPRA cost ratio down 90 bps to 12.3%
· EPRA earnings up 13.6% to £50.2m, +5.5% on a per share basis
· Dividend progression of 4.5% to 4.6p, 112% covered by earnings, including Q2 dividend declared of 2.3p
· Continued dividend progression expected for full year
Portfolio valuation movement reflects deterioration in macro investment backdrop
· Portfolio value of £3.5bn (31 March 2022: £3.6bn)
· Total property return -6.3%, capital return -8.1% (47bps yield expansion)
· EPRA NTA per share -12.2% to 229.3p
· IFRS reported loss of £243.4m
Occupational market strong, delivering +£4.3m pa income and 2.9% like for like income growth
· Rent reviews +17% with urban logistics reviews +25%
· Lettings signed with WAULT of 11 years and rent 14% higher than expectations, PPE: 17 urban deals at 24% ahead of previous passing
· Rent reviews on distribution assets over next 18 months expected to add £8 million pa of contracted income
Activity continues to strengthen our portfolio’s income characteristics and quality
· Occupancy remains high at 98.7%, WAULT of 12 years and gross to net income ratio of 98.9%
· Contractual rental uplifts on 60% of portfolio’s income, material embedded reversion on remainder
· EPC A-C rating improved to 86% of portfolio, BREEAM Very Good or Excellent on 30%
Distribution weighting at 73.9%, including urban logistics at 42.9%
· £140m of disposals (including PPE) with a WAULT of 7 years, sold at 6% premium
· £99m of acquisitions with a WAULT of 14 years
Strong balance sheet
· LTV of 32.1% with weighted average debt maturity of 5.8 years and cost of debt at 3.2% (85% hedged)
· New £225m revolving credit facility completed PPE, mitigates refinancing risk in the period to 31 March 2025
· Debt maturity increases to 6.2 years and available undrawn facilities are £235m post refinancing
Andrew Jones, Chief Executive of LondonMetric, commented:
“We continue to operate in a volatile environment with a number of challenges facing both the economy and the consumer. Sharp movements in both bond yields and interest rates have brought to an end the era of cheap money and is having a material impact on real estate valuations. Stability has partially returned, with a moderation in expectations for future rate increases, however we are expecting interest rates to remain higher for longer.
“Our real estate strategy, however, is less concerned with short term volatility and periods of dislocation. Instead, we focus on wider macro trends and longer term performance periods with a continued preference for real estate that benefits from evolving consumer behaviour as a result of technological advancement and changing economic conditions. With our significant weighting to well-located urban logistics, where there is a broad and deep occupational market, as well as our investment in highly resilient grocery-led long income, we have been able to ride out some of the recent headwinds and again report very strong income metrics and further earnings progression.
“Our all-weather portfolio of quality assets in great locations continues to enjoy strong fundamentals of very high occupancy, long leases and excellent rental growth. We have continued to actively manage and enhance the quality of the portfolio and the balance sheet, allowing us to grow our rental income, absorb higher interest costs and continue our long term dividend progression. As material shareholders in the business, the management team have strong shareholder alignment and will continue to ensure that the portfolio remains fit for the future.”
For further information, please contact:
LONDONMETRIC PROPERTY PLC: +44 (0)20 7484 9000
Andrew Jones (Chief Executive)
Martin McGann (Finance Director)
Gareth Price (Investor Relations)