LondonMetric earnings improve on back of growing rental income
By Josh White
Date: Tuesday 26 Nov 2024
(Sharecast News) - LondonMetric Property reported a significant increase in first-half earnings on Tuesday, as net rental income soared 154% year-on-year to £193.1m.
The FTSE 100 company said EPRA earnings rose 155% to £135.4m for the six months ended 30 September, representing a 26.5% increase on a per-share basis to 6.6p.
IFRS reported profit for the period doubled to £163.8m, with IFRS earnings per share steady at 8p.
The interim dividend per share was raised 18.8% to 5.7p, fully covered by earnings and consistent with the company's target of 12p for the full year.
LondonMetric attributed its performance to robust portfolio returns, driven by reliable and growing rental income.
Like-for-like income increased 1.7%, with annualised growth of 3.5%, contributing to a £40.9m valuation uplift.
EPRA net tangible assets per share rose 2.1% to 195.7p.
Portfolio activity remained strong, with the company acquiring £193.3m in logistics assets during the period, pushing logistics to 45% of its £6.2bn portfolio and targeting 50% by year-end.
Disposals totaled £155.4m , with further sales and acquisitions underway.
Occupancy remained high at 99%, with a weighted average unexpired lease term (WAULT) of 19 years.
Sustainability initiatives advanced, with 87% of the portfolio achieving EPC A-C ratings and an additional 3.3MWp of solar photovoltaic capacity installed.
LondonMetric said it anticipated £26m in income uplift over the next 18 months, with logistics alone offering 21% embedded reversionary potential.
The company maintained a strong financial position, with loan-to-value at 33.8% and a weighted average debt maturity of 4.8 years, fully hedged at an average cost of 4%.
LondonMetric said it also secured extended maturities and additional hedging facilities, enhancing financial flexibility.
"Following the transformational LXi deal, we have further cemented our position as the UK's leading triple net real estate income investor," said chief executive officer Andrew Jones.
"The benefits of our actions are evidenced by the portfolio's exceptional income characteristics, our sector leading EPRA cost ratio of 7.6% and our strong financial performance in the period which saw earnings per share grow by 26%.
"Our £6.2bn portfolio is aligned to the strongest thematics of logistics, convenience, hospitality and healthcare, and is invested in mission critical real estate with high occupier contentment."
Jones said that importantly, the company's transactional capabilities, greater scale and strong shareholder alignment was ensuring its portfolio was "constantly re-shaping", with £234m of lower growth disposals and £203m of high quality acquisitions in the year-to-date.
"This activity along with further external growth and consolidation opportunities that are presenting themselves is supporting our target to grow our logistics exposure to 50% by year end.
"Our all-weather portfolio with guaranteed rent growth, greater scale and a well positioned balance sheet underpins our earnings growth and our ability to deliver a tenth year of dividend progression and maintain our path to dividend aristocracy.
"After all, we continue to believe that income compounding is the eighth wonder of the world - the secret ingredient that creates wealth over time."
At 0847 GMT, shares in LondonMetric Property were up 0.68% at 191.8p.
Reporting by Josh White for Sharecast.com.
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