H1 19 Interim Results

Key Points. Mucklow’s interims show a steady performance with rental income up 4.2% driven by lease renewals, rent reviews, and a noteworthy fall in the vacancy rate to another record low of 2.4% (Jun 18: 2.8%). As a result, underlying PBT increased 6.3% YoY with growth of c.5% at the EPS level. Of significance, EPRA NAV grew by 2.3% (ahead of our expectations) to 572p (Jun 18: 559p) driven by a £8.7m revaluation gain (H1 18: £14.1m) demonstrating ongoing demand for industrial property in the Mi

AGM Trading Statement

Mucklow has released its AGM trading statement for the period from 1 July 2018 to 12 November 2018. Of note, the group has been able to maintain its record low vacancy rate of 2.8% that was reported at the finals in September, reflecting the continuing strong demand for regional industrial property, and the company’s active approach towards managing its portfolio.

Board Changes

Mucklow has announced that Justin Parker, Managing Director will be stepping down from the Board, and will leave the company on 31st December 2018 “to pursue new challenges in the property industry.”

Prelims FY18 – Valuation Growth with Record Low Voids

Finals showed a solid performance from Mucklow with EPRA NAV ahead of expectations, up 18.7% to 559p (Arden: 510p) driven by a revaluation gain of £49.7m (FY17: £13.0m) reflecting the continued investor appetite towards industrial property in the Midlands. Adjusted PBT (excluding these gains, and other exceptionals) decreased slightly to £15.7m (FY17 & Arden: £15.9m) driven by a one-off increase in property costs owing to the refurbishment of vacant properties.

Interims

Mucklow’s interim results reflect a stable performance with adjusted PBT increasing 1.3% YoY to £8.0m driven by gross rental income growth of 1.7% (to £12.0m), in line with our expectations, and EPRA EPS increasing by 2.7% to 12.88p. The company highlights consistent strong investor demand for industrial property in the Midlands as a key driver and, regarding the outlook, the company believes that market conditions will continue to be favourable for the rest of the year. As such we make no chang

AGM Update – Market conditions remain favourable

Mucklow’s AGM update reports that the portfolio has continued to benefit from steady occupier demand enabling the company to maintain the solid financial performance seen last year.

High quality assets, attractive yield

Mucklow has been one of the best performing UK REITs over the last 10 years, driven by the conservative long-term strategy and the astute reading of the property cycle. Looking forward we believe that the company’s Midlands industrial focus leaves it well-placed to benefit from structural and cyclical trends that should drive good growth in rents, dividends and capital values.

Positive AGM Update

Mucklow reports that the Group has maintained its positive momentum during the first four months of the year. Demand for space has remained steady against a background of declining availability with a record high for occupancy of 97.1% and increasing rental levels.

Interims – Occupier markets remain strong

Mucklow’s interims report a continuation of the positive trends in occupier markets seen last year but a more subdued period for investment markets. Strong occupier demand resulted in a reduction in voids to 4.7% at December 2015, which helped underlying PBT increase 16% to £7.5m. After the strong valuation gains seen in the last two years, there was a further small uplift, leaving NAV/share up 2.6% at 438p. The interim dividend was increased by 3% to 9.59p.

AGM - Rents and values continue to improve

Mucklow’s AGM reports a continuation of the positive trends seen last year. The availability of modern industrial space across Midlands “has continued to decline” and occupier demand has remained at good levels. This is driving rental growth with higher rents “consistently being achieved on new lettings and lease renewals” and the vacancy rate has declined from 5.4% at the year end to a record of low of 4.7% currently, which “may reduce further” by the end of H1.

Morning Note – 22 April 2024

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