Coronavirus Update

LondonMetric Properties Plc - Annual Results Update

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LONDONMETRIC PROPERTY PLC

("LondonMetric" or the "Group" or the "Company")

ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021

SECTOR ALIGNMENT AND ASSET SELECTION DELIVER

RELIABLE AND GROWING INCOME WITH STRONG PORTFOLIO OUTPERFORMANCE

LondonMetric today announces its annual results for the year ended 31 March 2021.

 

 

 

 

 

 

EPRA 1,2

IFRS

Income Statement

2021

2020

2021

2020

Net rental income (£m)

123.3

115.9

119.7

111.1

Earnings/Reported Profit (Loss)(£m)

85.6

74.5

257.3

(5.7)

Earnings per share (p)

9.52

9.26

28.6

(0.7)

Dividend per share (p)

8.65

8.30

8.65

8.30

 

EPRA 1,2

IFRS

Balance Sheet

2021

2020

2021

2020

NTA3 / NAV (£m)

1,731.9

1,437.2

1,731.3

1431.8

NTA3 / NAV per share (p)

190.3

170.3

191.3

171.0

LTV (%)

32.3

35.9

32.3

35.9

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

3.  EPRA net tangible assets (NTA) is a new reporting measure that replaces EPRA net asset value this year. Discussed further in the Financial review and note 8 to the financial statements

Continued focus on reliable, repetitive and growing income increases earnings and dividend

  • Net rental income up 6% to £123.3m, on an IFRS basis increased by 8%
  • Rent collection strong with less than 1% forgiven or outstanding for the year
  • EPRA earnings up 15% to £85.6m, +3% on a per share basis
  • IFRS reported profit up 400% to £257.3m, after adjusting prior year for exceptional costs
  • Dividend progression of 4.2% to 8.65p, 110% covered, including Q4 dividend declared today of 2.35p
  • Continued progression expected with Q1 22 dividend guidance of 2.2p, a 4.8% progression on Q1 21

Sector alignment and asset selection delivering strong portfolio valuation uplift

  • Total Property Return of 13.4%, outperforming IPD All Property which delivered 1.2%
  • Capital return of 8.0% (IPD All Property: -3.2%), urban logistics assets delivered a capital return of 15.5%
  • EPRA NTA per share increased by 11.7% to 190.3p, driven by 19.3p valuation gain, on an IFRS basis increased by 11.9%
  • Total Accounting Return of 16.7%

Distribution weighting at 71%, including urban logistics at 39% and grocery/roadside at 11%

  • £245m of acquisitions let to strong credits with a WAULT of 17 years and 87% of rent subject to contractual uplifts
  • £159m of disposals, largely shorter let urban logistics and long income assets, with a WAULT of nine years
  • Post year end, £68m acquired, increasing urban logistics portfolio to £1.1 billion, representing 41% of the portfolio 

173 asset management initiatives completed and strong progress on developments

  • £5.3m pa income uplift and 3.1% like for like income growth, with open market rent reviews +18%
  • Lettings signed with WAULT of 13 years, including a pre-let of 120,000 sq ft to Amazon at Tyseley
  • Under offer on 172,000 sq ft at Bedford Link development and in discussions on letting of the last unit

Resilient £2.6bn portfolio focused on operationally light assets with strong income characteristics

  • Occupancy of 98.7% with long income portfolio 100% let
  • WAULT of 11.4 years with only 8% of income expiring in next three years
  • Gross to net income ratio of 98.6% and contractual rental uplifts on 56.8% of income   

Balance sheet strengthened

  • £120m equity raise in year and £780m of refinancing with green framework post year end
  • LTV of 32.3% with weighted average debt maturity increased to 8.2 years (2020: 4.7 years) and cost of debt at 2.5%
  • EPRA cost ratio reduced further to 13.6% (-60bps)

Andrew Jones, Chief Executive of LondonMetric, commented :

"Whilst we have all experienced a truly unprecedented last 12 months, in many ways Covid-19 has merely accelerated longer term trends that were already being driven by technological advancement and changing consumer behaviour. Logistics, healthcare and grocery real estate have been significant beneficiaries of this acceleration delivering standout performances and enjoying an ever-wider margin of victory over other real estate sectors.

"The performance of our portfolio during the year reflects our alignment to the winning sectors and increasingly wanting to own the best assets. Our £2.6 billion portfolio has weathered the storm in fine shape evidenced by very strong rent collection, continued earnings growth and significant valuation uplift, all of which are as a result of longer term decisions to align to the winning macro trends. The urban logistics sector in particular, where we have now amassed over £1 billion of assets, has been our main conviction call for a number of years and is enjoying truly exceptional demand/supply dynamics resulting in material jumps in rents.

"Our strong shareholder alignment, disciplined approach and focus on quality assets that deliver a reliable, repetitive and growing income has positioned us well for the future as we progress towards our ambition of becoming a dividend aristocrat. After all, income compounding is the bedrock for attractive returns."