Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to 88V8,Howard,Bhoddhisatva,penym,Anonymous, for Donating to support the site

SEGRO results

Practical discussions about equity High-Yield Portfolios (HYP) for income
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
daveh
Lemon Slice
Posts: 689
Joined: November 4th, 2016, 11:06 am
Has thanked: 56 times
Been thanked: 222 times

SEGRO results

#284174

Postby daveh » February 14th, 2020, 9:14 am

Can be found here:
https://www.investegate.co.uk/segro-plc ... 00059833C/

Earnings momentum continues, driven by rental growth and a record year of development completions


Highlights:
· Adjusted pre-tax profit, up 10.8 per cent, reflecting a record year of development completions, high customer retention rates, like-for-like rental growth and a low vacancy rate.
· Adjusted EPS of 24.4 pence, an increase of 4.3 per cent compared to 2018 (23.4 pence) or 9.9 per cent excluding the impact of the SELP performance fee received in 2018 (payable every five years). IFRS EPS of 79.3 pence (2018: 105.4 pence) reflects the 7.5 per cent increase in the value of our portfolio (2018: 10.7 per cent increase).
· EPRA NAV per share up 8.9 per cent to 708 pence (31 December 2018: 650 pence). IFRS NAV per share was 697 pence (31 December 2018: 644 pence).
· Future earnings prospects underpinned by 1.2 million sq m of development projects under construction or in advanced pre-let discussions. This equates to an additional 15 per cent of space and £70 million of potential rent, 71 per cent of which relates to pre-lets and lettings prior to completion.
· 2019 full year dividend increased by 10.1 per cent to 20.7 pence (2018: 18.8 pence). Final dividend increased by 8.7 per cent to 14.4 pence (2018: 13.25 pence).

FINANCIAL AND OPERATING HIGHLIGHTS1
Valuation gains and rental growth across the portfolio with Continental Europe outperforming the UK
· Portfolio capital valuation surplus of 7.5 per cent driven by a 2.5 per cent increase in the like-for-like value of our UK portfolio (2018: 12.0 per cent) and 13.5 per cent in Continental Europe (2018: 5.1 per cent). Valuation gains were driven mainly by asset management, rental value growth (UK: 2.6 per cent, Continental Europe: 3.0 per cent), development gains and further yield compression in Continental Europe.
Operational metrics at record levels thanks to active asset management and strong occupier demand
· £65.8 million in annualised new rent commitments in the period (2018: £66.4 million), of which £33.2 million (2018: £41.5 million) is from new development.
· 4.7 per cent like-for-like net rental income growth (5.7 per cent in the UK, 3.1 percent in Continental Europe) aided by an average 17.8 per cent uplift on rent reviews and renewals. The UK figures include the significant impact of lease re-gears and renewals at the Heathrow Cargo Centre.
· Vacancy rate remains low at 4.0 per cent (31 December 2018: 5.2 per cent) reflecting strong lettings of recently completed speculative developments and some vacant asset disposals. Our continued focus on customer service has kept customer retention high at 88 per cent (2018: 89 per cent).
Capital allocation focused on funding further development-led growth
· £692 million of investment in our portfolio, including £556 million invested in development capex, infrastructure and land as well as £136 million of asset acquisitions. This was partially offset by £442 million of asset and land disposals (including sales of assets to our SELP joint venture).
· Total development capex for 2020, including infrastructure and land acquisitions, expected to exceed £600 million.
· £50 million of potential rent from current development pipeline, 60 per cent of which has been secured. This includes £10 million of potential rent from speculative urban warehouse developments in the very attractive London market.
· £20 million of potential rent from further 'near-term' pre-let projects which are in advanced stages of negotiation. Our land bank and additional land under our control through option agreements provide significant potential for further growth.
Balance sheet
· SEGRO continues to be appropriately and efficiently financed. The average cost of debt remains attractive at 1.7 per cent (2018: 1.9 per cent), the long average debt maturity has been maintained at 10.0 years (2018: 10.2 years) and look-through LTV ratio has reduced to 24 per cent (31 December 2018: 29 per cent).
· Equity placing of £451 million completed in February 2019, providing capacity to continue to invest for growth.
· SEGRO has almost £1.4 billion of cash and available facilities at its disposal.




Dividend paid 1st May record date 20th March ex date 19th March.

Dod101
Lemon Half
Posts: 5005
Joined: October 10th, 2017, 11:33 am
Has thanked: 1039 times
Been thanked: 1907 times

Re: SEGRO results

#284175

Postby Dod101 » February 14th, 2020, 9:17 am

Excellent results, but hardly HYP I would have thought? I hold it.

Dod

kempiejon
Lemon Quarter
Posts: 1389
Joined: November 5th, 2016, 10:30 am
Has thanked: 5 times
Been thanked: 341 times

Re: SEGRO results

#284191

Postby kempiejon » February 14th, 2020, 9:40 am

Nice to see any double digit income increase in my income holdings, this particular offer has been in my HYP since 2006, just before it paid out a big special dividend 50p and cut it's regular from 30p to 13p. In the following 13 years it's still not recovered the income to what I bought it for. Lowly yield for a few years now but at least it has shown and inflation beating dividend increases in that time.

tjh290633
Lemon Quarter
Posts: 4323
Joined: November 4th, 2016, 11:20 am
Has thanked: 306 times
Been thanked: 1582 times

Re: SEGRO results

#284193

Postby tjh290633 » February 14th, 2020, 9:46 am

They seem to have a scatter gun approach to where they put information. A long way down the announcement you will find:

DIVID INCREASE REFLECTS A STRONG YEAR AND CONFIDENCE FOR THE FUTURE

Under the UK REIT rules, we are required to pay out 90 per cent of UK-sourced, tax-exempt rental profits as a 'Property Income Distribution' (PID). Since we also receive income from our properties in Continental Europe, our total dividend should normally exceed this minimum level and we target a pay-out ratio of 85 to 95 per cent of Adjusted profit after tax. We aim to deliver a progressive and sustainable dividend which grows in line with our profitability in order to achieve our goal of being a leading income-focused REIT.

The Board has concluded that it is appropriate to recommend an increase in the final dividend per share by 1.15 pence to 14.4 pence (2018: 13.25 pence) which will be paid as a PID. The Board's recommendation is subject to approval by shareholders at the Annual General Meeting, in which event the final dividend will be paid on 1 May 2020 to shareholders on the register at the close of business on 19 March 2020.


That seemed to be the only place where they mention the dividend being a PID.

TJH

Alaric
Lemon Quarter
Posts: 3923
Joined: November 5th, 2016, 9:05 am
Has thanked: 13 times
Been thanked: 778 times

Re: SEGRO results

#284232

Postby Alaric » February 14th, 2020, 11:27 am

Dod101 wrote:Excellent results, but hardly HYP I would have thought? I hold it.



The growth in the share price has outstripped the growth in the dividend.

daveh
Lemon Slice
Posts: 689
Joined: November 4th, 2016, 11:06 am
Has thanked: 56 times
Been thanked: 222 times

Re: SEGRO results

#284240

Postby daveh » February 14th, 2020, 11:43 am

Dod101 wrote:Excellent results, but hardly HYP I would have thought? I hold it.

Dod



Not anymore, but it was when I bought it (March 2008). It then when and cut its divi and had a rights issue (which some around here would suggest means it should have been sold). I tail swallowed the rights as I didn't have the cash to take them up. It has been one of my better performers, showing a return of 15%pa. It got to be so large a % of my portfolio that I had to chop it back in May 2018 and again in June last year. If it keeps as it is I'll be top slicing again this year as I've just noticed that it is back above 2x median size.

Dod101
Lemon Half
Posts: 5005
Joined: October 10th, 2017, 11:33 am
Has thanked: 1039 times
Been thanked: 1907 times

Re: SEGRO results

#284261

Postby Dod101 » February 14th, 2020, 12:32 pm

I bought SEGRO in July 2015 at £4.492 so it has done very well for me, although of course that is not a HYP-P comment so I will say no more.

I held it for some years in its previous incarnation as Slough Estates but for some reason sold it. I do not remember why.

Dod

daveh
Lemon Slice
Posts: 689
Joined: November 4th, 2016, 11:06 am
Has thanked: 56 times
Been thanked: 222 times

Re: SEGRO results

#284311

Postby daveh » February 14th, 2020, 3:06 pm

Dod101 wrote:I bought SEGRO in July 2015 at £4.492 so it has done very well for me, although of course that is not a HYP-P comment so I will say no more.

I held it for some years in its previous incarnation as Slough Estates but for some reason sold it. I do not remember why.

Dod


I bought at about the same price in 2008 but the waters are somewhat muddied by the rights issue(s) and consolidation in that I owned about 700 odd shares, received ~9000 rights of which I sold ~5000 and used the cash to take up ~ 3000 rights; there was then a 1:10 consolidation leaving me with ~400 shares which had cost ~800p each. I bought more shares between 2011 and 2012 at prices between 200 and 250p and took up the rights in 2017 at 345p. Putting all that (and the dividends) into excel the IRR comes out at 15% pa.

Dod101
Lemon Half
Posts: 5005
Joined: October 10th, 2017, 11:33 am
Has thanked: 1039 times
Been thanked: 1907 times

Re: SEGRO results

#284315

Postby Dod101 » February 14th, 2020, 3:17 pm

I had forgotten about the Rights Issue in 2017. I think I tail swallowed that one, but it has been a good share for me.

Dod

tjh290633
Lemon Quarter
Posts: 4323
Joined: November 4th, 2016, 11:20 am
Has thanked: 306 times
Been thanked: 1582 times

Re: SEGRO results

#284590

Postby tjh290633 » February 15th, 2020, 7:48 pm

That rights issue and subsequent consolidation was at time when Brixton Estates were acquired.

My memory tells me that it was structured the way it was to prevent shares being offered below the nominal price. Lost in the mists of time, now.

TJH

Arborbridge
Lemon Quarter
Posts: 4153
Joined: November 4th, 2016, 9:33 am
Has thanked: 832 times
Been thanked: 1368 times

Re: SEGRO results

#284936

Postby Arborbridge » February 17th, 2020, 1:42 pm

It's been a very good performer, and from my POV it's a case of "if only" - if only I'd got on to it when the yield was reasonable. It could have made a good partner for my BLND holding, being different in character.

Alaric
Lemon Quarter
Posts: 3923
Joined: November 5th, 2016, 9:05 am
Has thanked: 13 times
Been thanked: 778 times

Re: SEGRO results

#284949

Postby Alaric » February 17th, 2020, 2:22 pm

tjh290633 wrote:My memory tells me that it was structured the way it was to prevent shares being offered below the nominal price. Lost in the mists of time, now.


If I've correctly understand the notes I made some years ago, when establishing base cost, it went as follows:-

April 2009 - Consolidation 25 to 27 1/12 (increases number of shares)
April 2009 - Rights issue of 12 times the consolidated holding at £ 0.10 per share.
April/July 2009 - Consolidation 10 to 1
July 2009 Rights issue of around 1 share per 10 at £ 2.10 per share
March 2017 Rights issue of 1 share per 5 at £ 3.45 per share

Current price is over £ 9.00

TUK020
Lemon Slice
Posts: 919
Joined: November 5th, 2016, 7:41 am
Has thanked: 204 times
Been thanked: 474 times

Re: SEGRO results

#284952

Postby TUK020 » February 17th, 2020, 3:00 pm

The share price for the last year looks like an unusually smooth ramp up by 50%.
Any accounting as to why this is such a smooth progression?

daveh
Lemon Slice
Posts: 689
Joined: November 4th, 2016, 11:06 am
Has thanked: 56 times
Been thanked: 222 times

Re: SEGRO results

#284965

Postby daveh » February 17th, 2020, 3:43 pm

Alaric wrote:
tjh290633 wrote:My memory tells me that it was structured the way it was to prevent shares being offered below the nominal price. Lost in the mists of time, now.


If I've correctly understand the notes I made some years ago, when establishing base cost, it went as follows:-

April 2009 - Consolidation 25 to 27 1/12 (increases number of shares)
April 2009 - Rights issue of 12 times the consolidated holding at £ 0.10 per share.
April/July 2009 - Consolidation 10 to 1
July 2009 Rights issue of around 1 share per 10 at £ 2.10 per share
March 2017 Rights issue of 1 share per 5 at £ 3.45 per share

Current price is over £ 9.00



I don't have the first consolidation in my records, but the rights received match a 12 for 1 rights issue wrt the shares held since 2008. I then record the second consolidation 1 for 10 and another rights issue of 1 for just less than 10 as 403 shares produced 42 new shares after I took up the rights. I have no record of why they had the two rights issues in such close proximity; a very large one followed by a fairly small one. I took up the rights again in 2017 at 345p. My recollection why I didn't take up the first rights issue was that it was going to cost too much, but looking at how I tail swallowed the rights only cost 10p to take up so it would have been less than £1000 to take up the rights in full so maybe I was hedging my bets by keeping my holding the same size as a % of the overall size of the company.

tjh290633
Lemon Quarter
Posts: 4323
Joined: November 4th, 2016, 11:20 am
Has thanked: 306 times
Been thanked: 1582 times

Re: SEGRO results

#284983

Postby tjh290633 » February 17th, 2020, 4:58 pm

I'm now looking at my records.

I first bought Segro in 2007 at 543p, with a then yield of 4.2%. Then in 2009 they had a 12 for 1 rights issue at 10p, followed by a 10 for 1 consolidation, followed by an Open Offer, which I took up at 210p.

I've found he PDF documents on my computer, relating to the rights issue and the merger with Brixton, but don't have links to them. A relevant page from the Placing and Open Offer Document of 09 July 2009 is:

• In order to maintain the Enlarged Group’s financial flexibility and covenant headroom following the Transaction, SEGRO has today announced its intention to raise £250 million by means of a Firm Placing and Placing and Open Offer of 119.0 million New SEGRO Shares at 210.00 pence per New SEGRO Share, which is being fully underwritten by J.P. Morgan Securities, UBS and Merrill Lynch. The Firm Placing and Placing and Open Offer is not conditional on the Transaction becoming Effective.


TJH

Alaric
Lemon Quarter
Posts: 3923
Joined: November 5th, 2016, 9:05 am
Has thanked: 13 times
Been thanked: 778 times

Re: SEGRO results

#285029

Postby Alaric » February 17th, 2020, 8:09 pm

daveh wrote: I have no record of why they had the two rights issues in such close proximity; a very large one followed by a fairly small one.


Looking back at some of the archive material thrown up by a Google search, the first one appears to have been a general need for more capital, and the second to finance the merger with or takeover of Brixton.


Return to “High Yield Portfolios (HYP) - Practical”

Who is online

Users browsing this forum: No registered users and 9 guests