First quarter of 2020

The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.

Grainger

Acceleration to scale; NTA premium pricing this

Grainger

AGM statement – good start to the year

Grainger

10% premium to NTA pricing in near-term outlook

Grainger

Acquisition in Cardiff for £57m; 7% gross yield

Another acquisition in East London; PT upgrade

Grainger has announced another forward-funded acquisition within Canning Town, this time a 132-home PRS development in Hallsville Quarter for ~£55m (5.5% gross yield), complementing its existing PRS developments in this area (Argo Apartments, Hallsville Quarter phase 1). We leave our forecasts are unchanged (not updated post yesterday’s prelims), but upgrade our PT from 290p to 305p, pricing the shares at a ~10% premium to EPRA Net Tangible Assets. Buy.

FY19 prelims – earnings 3% ahead of consensus

FY19 prelims have come in line. Key highlights include: NRI ~3% below our forecasts, but offset by disposal profits being ~6% ahead, resulting in an adj. op. profit beat of 3.4% . Adj. PBT was in line with our estimates, and 3% ahead of BB cons. EPRA NNNAV grew 1% LFL to 272p (post rights-issue). With the shares up 33% YTD, and tracking close to our 290p PT (unchanged), we acknowledge the shares are up with events. However, we leave our Buy stance unchanged noting the potential that exists for t

Planning application submitted for Lewisham development

Grainger has confirmed that a detailed planning application to develop on Besson Street (New Cross Gate, Lewisham) has now been submitted as part of its 50/50 JV with the London Borough of Lewisham. The scheme will include 324 new homes (35% affordable), as well as 5,000 sq. ft of amenity space. Subject to planning permission, construction is expected to start in April 2021 with completion anticipated for April 2024. We make no changes to our forecasts and leave our Buy rec unchanged, noting tha

Earnings rebased ~7%/9% for FY20/21e; more conservative stance taken

We update our forecasts for Grainger following the Sept trading update and CMD, revising down our net rental income estimates by ~8%/10% for FY20/21e taking a more conservative view over the lag between passing rents vs. NRI materialised. As a result our adj. PBT estimates fall by ~7%/9% for FY20/21e, which moves us from the top-end of consensus to the middle of the range. We retain our Buy rec and 290p PT, seeing moderate upside (~8%) at current levels noting the recent bounce in the shares ove

£42m acquisition generates scale in Sheffield

Grainger has announced a £42m forward-funded acquisition of a 284- home PRS development in Sheffield (gross yield ~7% on cost), complementing its existing presence in the region. We make no forecast changes at this stage, and with the shares trading at a ~13% discount to our FY20e EPRA NNNAV, we continue to believe this undervalues the company’s sector-leading positioning in the PRS market, reiterating our Buy rating.

Trading update shows good rental growth, leasing ahead of expectations, new acquisition

Grainger has released a trading update to the end of August reporting LFL rental growth of 3.4% (ahead of our forecasted 3% for FY19e), leasing ahead of expectations at its new schemes in Bristol, Manchester & Hampshire, and a complimentary acquisition also in Bristol. We leave our forecasts unchanged at this stage, though we note we are ahead of consensus for FY20 and reiterate our Buy recommendation seeing value at current levels.

Update to £34m forward funded acquisition in Leeds

Grainger has announced that construction has now commenced at its 216-home PRS development in Leeds, which is being forward funded for £34m. The scheme (known as Fabrik) is anticipated to generate gross yield on cost in excess of 6.5% once stabilised, with completion anticipated for late 2021. We highlight the fact that this development builds on Grainger’s existing presence in Leeds (complimenting its 242-home Yorkshire Post development, also anticipated to complete in 2021) giving the company

Earnings rebased 16-22% post interims; maintain strong Buy

Following the interims last week, we rebase our earnings by 15.8% for FY19E and 21% - 22% for FY20-21E to reflect disposal profits in H1 19 being lower than expected, and updated assumptions on net rental income post the interims. We make other small changes (explained below) which repositions EPRA NNNAV from 287p to 283p in FY19E and from 306p to 299p in FY20E. Though we move from the top-end to the middle of consensus earnings, we remain buyers of Grainger seeing significant scope for a re-rat

H1 19 Interims; 6% PBT fall due to sales timing

Grainger’s interims reported net rental income of £29.1m (up 33% YoY, +3.6% excluding the GRIP consolidation) and underlying PBT of £38.3m (- 6% YoY due to the timing of residential sales, as previously indicated). EPRA NNNAV was reported at 271p (up marginally from a restated 270p at Sept 18, which our calculations assumed would be 277p). The company has also declared an interim dividend of 1.73p (up 10% YoY) but below our original forecast of 1.96p due to the impact of right issue restatement.

Morning Note – 22 April 2024

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Benefits of scale set to materialise

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

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.

Morning Note – 29 February 2024

Jupiter Green

Hardman & Co Insight - Asset managers had a poor 2022

Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year? The first chart is my favourite chart of asset m