March 06, 2008
SEGRO, the leading European provider of flexible business space, announces its Preliminary Results for the year ended 31 December 2007.
Highlights
- Strong underlying profit performance - adjusted profit before tax increased by 7.7 per cent to £153.7m (2006: £142.7m), comprising profit from both continuing operations (£131.3m) plus discontinued operations (£22.4m). Profit before tax reported under IFRS was £242.9m (2006: £690.1m).
- Adjusted diluted NAV per share was down 9.2 per cent at 704p (down 13.2 per cent since June 2007), NAV per share was down 3.9 per cent at 690p. These reflected property valuation reductions including a 9.5% market-driven year on year UK deficit, positively countered by a surplus of 6.2% in Continental Europe. H1 2007 property gains of 3.1 per cent (UK: 2.1 per cent; Continental Europe: 9.1 per cent) were offset by a second half deficit of 9.1 per cent (UK: 11.3 per cent; Continental Europe 0.2 per cent gain)
- Very strong lettings achieved in the UK with a record 298,000 sq m of space let (up 62 per cent) and overall vacancy reduced from 11.6 per cent to 10.8 per cent (8.5 per cent underlying).
- Excellent progress in Continental Europe with £425m (€621m) of attractive acquisitions and development expenditure of £112m (€164m). Very good letting figures of 298,000 sq m (up 76 per cent) and a vacancy rate of 5.9 per cent at year end (down from 8.7 per cent).
- Successful and well-timed exit from the USA realising a pre-tax gain on sale of £437m and enabling the payment of a £250m special dividend (53 pence per share) in August 2007.
- Adjusted diluted earnings per share up 28.3 per cent at 32.2p (2006: 25.1p) with a basic unadjusted loss per share of 16.4p (2006: 201.8p earnings per share).
- Final dividend per share of 14.7p, making a total dividend of 23p per share, up 21 per cent over 2006 and assisted by the Group’s REIT conversion on 1 January 2007.
- Strong balance sheet and resilient business model with a year end adjusted debt to equity ratio of 56 per cent, a loan to value ratio of 34 per cent, average debt maturity of 10.5 years and available funds of £1.1bn.
Ian Coull, Chief Executive commented:
“2007 was a transformational year for SEGRO, in which we became a UK REIT, achieved critical mass in Continental Europe, delivered a timely and well executed disposal of our US business and divested the power station in Slough. We produced excellent profits, underpinned by our customer focus and our core skills in asset management and development.
Looking forward, we expect the continuing weakness in the credit and real estate investment markets to maintain downward pressure on UK commercial property values during the first half of the year. However, occupier demand across all our key markets continues to hold up well and, with a strong balance sheet - £1.1 billion of available facilities - a focused business model and a broad diversity of customers, SEGRO is well placed to take advantage of the opportunities and to face the challenges that lie ahead”.
Summary Financial Statement Tables
| INCOME STATEMENT |
|
|
| Continuing Operations |
2007 |
2006 |
| Net rental income(1) (£m) |
204.8 |
188.8 |
| Property (losses)/gains (£m) |
(382.2) |
397.5 |
| (Loss)/profit before taxation (£m) |
(246.5) |
505.5 |
| Adjusted profit before taxation(2) (£m) |
131.3 |
99.6 |
| Underlying tax rate(4) (%) |
1.4 |
14.0 |
| Continuing and Discontinued Operations |
|
|
| Profit before taxation (£m) |
242.9 |
690.1 |
| Adjusted profit before taxation(2) (£m) |
153.7 |
142.7 |
| Basic (loss)/earnings per share (p) |
(16.4) |
201.8 |
| Adjusted diluted earnings per share(3) (p) |
32.2 |
25.1 |
| Total dividend for the year (p) |
23.0 |
19.0 |
| Total return(9) (%) |
0.7 |
19.2 |
| BALANCE SHEET |
31 December |
31 December |
| |
2007 |
2006 |
| Total properties, including share of Joint Ventures (£m) |
5,182.6 |
6,079.8 |
| Net assets excluding minority interests (£m) |
2,989.0 |
3,372.7 |
| Adjusted net assets(5) (£m) |
3,056.0 |
3,648.8 |
| Net assets per share (p) |
690 |
718 |
| Adjusted diluted net assets per share(6) (p) |
704 |
775 |
| Net debt (£m) |
1,701.1 |
2,223.4 |
| Debt to equity(7) (%) |
55.7 |
60.9 |
| Loan to value(8) (%) |
34.0 |
38.0 |
| 1 |
Including rental income on trading properties. |
| 2 |
Profit before tax adjusted for EPRA and exceptional items. |
| 3 |
Earnings per share based on adjusted profit before tax and reflecting the dilutive effects shares held by the ESOP trust. |
| 4 |
Tax charge, excluding deferred tax on valuation movements, as a percentage of adjusted profit before tax. |
| 5 |
Shareholders’ funds adjusted to add back deferred tax associated with investment properties. |
| 6 |
NAV per share adjusted to add back deferred tax associated with investment and development properties and to reflect the dilution caused by shares held in the ESOP. |
| 7 |
Net debt as a percentage of net assets adjusted to add back deferred tax associated with investment and development properties. |
| 8 |
Net debt as a percentage of the total property portfolio excluding joint ventures. |
| 9 |
Adjusted NAV growth plus dividends paid in the period and after adding back the SIIC conversion charge of £13.9 million (2006 restated to add back the REIT conversion charge of £81.9 million). |
| SEGRO plc |
The Maitland Consultancy |
| Michael Waring Tel: +44 (0)7775 788 628 |
Colin Browne Tel: +44 (0)20 7379 5151 |
About SEGRO
SEGRO is the leading provider of Flexible Business Space in Europe. Headquartered in the UK, SEGRO is listed on the London Stock Exchange and on Euronext in Paris. The company is a UK Real Estate Investment Trust (“REIT”) with operations in ten countries (it completed the exit from its US business in August 2007), serving a diversified customer base of over 1,600 customers operating in a wide range of sectors, representing both small and large businesses, from start ups to global corporations. With property assets of £5.2 billion (including trading properties and development assets) and around 4.7. million sq m of business space, SEGRO has an annual rental income in excess of £249 million. www.segro.com
Please click here for the full press release in PDF format.
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PROPERTY ANALYSIS
For full details of our holdings can be found in the SEGRO Property Analysis.
INVESTOR PRESENTATION
An investor presentation takes place at 09.30 and will be available by webcast. Register here for the webcast. Copies of the investor presentation slides are available from the Financial Results page. |