SEGRO's prime warehousing portfolio 'showing growth and resilience with the outlook strengthened by the acceleration of structural trend', reports SEGRO in its half yearly review to June 2020.
Commenting on the results, David Sleath, Chief Executive, said: “SEGRO’s strong and resilient business has continued to grow in the first half of 2020 despite the unprecedented disruption caused by Covid-19, in no small part thanks to the dedication and commitment of our people. Our focus on our customers, suppliers and local communities has allowed us to offer targeted support where needed.
“The impacts of the pandemic are accelerating the adoption of technology, particularly e-commerce, across society and have resulted in a renewed focus by many occupiers on the critical importance of efficient, resilient logistics supply chains. These factors play to the quality of our portfolio and should continue to support and enhance occupier and investor demand for our prime warehouses, both in the UK and, increasingly, on the Continent.
“Our existing portfolio has performed well and our development programme has expanded, with a pipeline of additional near-term pre-let projects which is approximately twice the size of a year ago. This, combined with our well-located land bank, means we are in a strong position to make further progress in the second half of the year and beyond.”
Highlights:
- Adjusted pre-tax profit of £140.4 million up 6.5 per cent compared with the prior year (H1 2019: £131.8 million). Adjusted EPS is 12.5 pence (H1 2019: 12.2 pence) and Adjusted NAV per share up 2.6 per cent to 718 pence (31 December 2019: 700 pence), in part due to a 0.7 per cent (H1 2019: 3.5 per cent) increase in the valuation of the portfolio.
- Good lettings and asset management performance supported by continued high levels of occupier demand. £33.7 million of new headline rent captured in the period, including £18.8 million of new pre-let agreements, tracking in line with 2019 levels.
- Continuing to invest for growth with net capital expenditure of £631 million in the period through asset acquisitions, development projects and land purchases. Future earnings prospects underpinned by 1.3 million sq m of development projects under construction or in advanced pre-let discussions, equating to an additional £78 million of potential rent, 86 per cent of which relates to pre-lets.
- Over £1 billion of new equity and debt financing, helping to strengthen the balance sheet for further, development-led growth. LTV of 22 per cent at 30 June 2020.
- The £10 million SEGRO Centenary Fund, launched in April, has already awarded £771,000 to projects across the UK and Continental Europe with £465,000 of additional support to help alleviate pressures caused by the pandemic.
- Interim dividend increased by 9.5 per cent to 6.9 pence (2019 interim dividend: 6.3 pence), in line with our usual practice of setting the interim dividend at one-third of the previous full year dividend
FINANCIAL SUMMARY