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Simon Property Group is monetising around half of its 22.4% stake in Klépierre. What are the implications for Klépierre and at sector level?
Companies: Klepierre (LI:EPA)Klepierre SA (LI:PAR)
AlphaValue
Q3 23 income accelerated significantly compared with H1 23. The other parameters were more in line with our expectations, with the vacancy ratio no longer improving and retailer revenues also normalising yoy. Italy and reversion, which weakened in Q3 23, were the most striking points. The granularity of Klépierre’s communication remains insufficient to better understand, and therefore anticipate, the underlying performance. For the time being, this strategy is favourable to the company’s share p
After adjusting for variable rents (+36%), car parks (+32%) among other slight restatements, we see a slight erosion in the underlying rental momentum despite the top line up 7.3% organically in H1 23.
We are lacking a couple of traditional operational metrics with which to evaluate Klépierre’s overall performance in the Q1 23 but inflation is playing its role and vacancy was stable sequentially.
Significant positive one-offs supported consolidated FFO in FY 22. Reported FFO per share should be down c.10% in FY 23 yoy even if +5% positive at the recurring level. €2.35 in FY 23 would mean remaining significantly below the FY 19 level of €2.79, nevertheless.
After persistent volatility for the top-line in Q1-Q2 22, Klépierre’s performance now looks to be progressively stabilising as it benefits from the rising contribution from inflation.
The guidance was raised due to positive one-offs. Vacancy stopped improving, thus confirming the stabilisation since December 2021.
Klépierre addressed the thematic of consumer spending while confirming its guidance. The H2 21 recovery in occupancy stalled in Q1 22.
Due to its own positioning (more global than local), Klépierre’s recovery should be strong in H1 22, for technical reasons first: sure, a favourable base effect will help. There are still a couple of quarters before landing in full.
Business is about to normalise progressively. The rent collection rate should soon be back to its usual pre-crisis level and new rent abatements are now targeting zero.
Despite a slower recovery that one could have expected in 2020, values were resilient in H1 21. The c.4% p.a. was half the FY 20 degradation pace. Even if we question the roughly stable appraisals, the fact is that the released figures were reassuring.
Klepierre confirmed other players’ views: shoppers are back in the shops as from reopening, targeting 90% of 2019 retailers’ revenue. No strong consumption catch-up (i.e. sales above 2019 levels) was observable to date, nevertheless. Klépierre’s shopping malls should reopen in full as from mid-May.
The company’s FY 21 guidance wasn’t that aggressive in assuming a lower FFO per share. Is this because some non-recurring items could be considered as recurring?
Research Tree provides access to ongoing research coverage, media content and regulatory news on Klepierre. We currently have 35 research reports from 3 professional analysts.
Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and
Companies: Lowland Investment Co PLC
Edison
Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.
Companies: Foxtons Group Plc
Zeus Capital
PCI Pal’s FY23 results show revenue growth of +25% to £14.9m, gross profit growth of +31% to £13.1m at a margin of 88%, and an outlook confirming robust momentum in H1 24. The FY23 results are as expected following the August trading update, and FY23 Total Annual Contract Value (TACV) is +23% yoy to £16.4m, with ARR +14% yoy to £12.6m due to £3.1m of contracts in deployment. We expect ARR will increase +35% and +31% to £17.0m and £22.2m in FY24 and FY25, as management lands and expands following
Companies: PCI-PAL PLC
Cavendish
Proposed share-for-share merger with Northgate
Companies: Redde Northgate PLC
Arden Partners
Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long
Companies: Vp plc
Equity Development
On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
Vector Capital is an established commercial lending group, focused on secured short-term and bridging loans in the property sector. This morning, the group has reported full year results to 31 December 2023, illustrating the challenging market backdrop. While underlying trading was robust, with good demand being seen for new loans, provisions for bad debts relating to historical loans of £728k in the year led to a decrease in PBT to £2.1m (WHI est. £2.4m, FY22 £2.8m). Looking ahead, although VCA
Companies: Vector Capital PLC
WHIreland
Companies: Equals Group Plc
Canaccord Genuity
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