LXi REIT - Organic growth drivers with external opportunities

LXi REIT reported strong FY23 income results and well-covered dividend growth, driven by the economies scale generated by its successful merger with Secure Income REIT (SIR) and rental growth. We expect this to continue. Asset management, rent growth and portfolio positioning all mitigated the capital impact of market-wide weakness in property values.

LXi REIT - Stronger, leaner and fitter

LXi REIT’s (LXi’s) well-executed merger with Secure Income REIT (SIR) brought together two complementary businesses, adding scale at low cost and retaining LXi’s successful diversified, inflation-protected, long-income strategy. We expect this approach to deliver visible income and DPS growth, including merger cost savings, and mitigate market-wide pressure on capital values. Meanwhile, good progress is being made with the near-term priorities of debt refinancing, capital recycling, and lease re

LXi REIT - Strong accretive growth continuing

The strong returns evident in LXi REIT’s (LXi’s) interim results continued through Q322, well above the company’s target of at least 8%, supported by swift and accretive capital deployment. In this note we review LXi’s strategy and the prospects for continued growth based on inflation-indexed rent uplifts and accretive portfolio acquisitions, reflected in our updated forecasts.

LXi REIT - Swift and accretive capital deployment

Less than two months after closing its most recent, c £100m (gross) upsized equity placing, LXi REIT has substantially deployed the equity proceeds in accretive acquisitions. Further assets are in solicitors’ hands. Full rent collection underpins the FY22 DPS target, a new high level since listing in February 2017, and we forecast portfolio growth and inflation-protected rents to drive further growth in DPS and net asset value.

LXi REIT - Strong FY21 with increasing momentum

LXi REIT’s FY21 results showed a strong performance against the challenging market backdrop, especially during the second half of the year. The 5.6% EPRA NTA total return takes the annual average since IPO to 10.1%, well ahead of the 8% minimum target. Accretive portfolio growth, inflation-protected rents and full rent collection are positive indicators for further growth, while the FY22 DPS target marks a new high level since IPO in February 2017.

LXi REIT - Diversified, long income

LXi REIT is a diversified, multi-sector investor in high-quality, often newly built, assets let on long, upwards only, index-linked leases. Visible growth in contracted income, substantially inflation protected, supports a progressive dividend policy. An ability to source attractively priced assets, including smaller lot size forward developments, and active capital recycling further supports returns.

Safer harbour REITS: an update

A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REI

Fidante Daily Digest

Sequoia Economic Infrastructure Income – Results of fundraising | LXi – New investments

Fidante Daily Digest

Augmentum Fintech – Additional investments | LXi – Results of fundraising

Fidante Daily Digest

PSH* – Pershing Square Holdings – Q1 2019 shareholder letter | LXI – LXi – Finals and proposed fundraising

Fidante Daily Digest

Gresham House Energy Storage – Q1 2019 NAV, dividend and placing | LXi – Acquisitions and disposals | AEW UK – Q1 2019 NAV and dividend

Fidante Daily Digest

Merian Chrysalis – Starling Bank grant award | Augmentum Fintech – ClearBank/Tide grant award | Aberdeen Standard Euro Logistics Income – Q4 2018 NAV | LXi – Accretive acquisition

Fidante Daily Digest

LXi – Acquisitions and disposals | Civitas Social Housing – Grading under review | Chenavari Capital Solutions - December 2018 update

Fidante Daily Digest

LXi - Disposals and acquisitions | Triple Point Social Housing - Acquisitions | Picton Property Income - Upsized lease with Lidl

Fidante Daily Digest

LXi – Interims to 30 September 2018 | Civitas Social Housing – Interims to 30 September 2018 | Empiric Student Property – New CEO

LIBERUM: Plus500: Strategic progress pays dividends

Tatton Asset Management (TAM LN) - Record net inflows

Tatton, the leading on-platform discretionary fund manager (DFM) and IFA support services Group has released a trading update ahead of its results to 31 March 2024, due on 18 June 2024.

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

Ondo InsurTech FY24 Trading Update

Ondo InsurTech has released a brief post-YE update revealing its good progress continued through 2H24 and consequently FY24 will be in line with market expectations.

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

NextEnergy Solar Fund - Attractive Refinancing

The refinancing of a £135m revolving credit facility and the extension of a similar £70m facility gives NESF firepower as development opportunities for new solar are especially attractive thanks to lower module prices in Europe. They give the fund key financial flexibility at a critical time as it pursues its capital recycling programme.

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

Initial Equity Trading Comments - 19 February 2024

M Winkworth+ (WINK, House Stock at 163p) - Solid FY23A results, well placed to grow

Resilient FY24, confident long-term outlook

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

Hybridan Small Cap Feast - 16/04/2024

16th 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: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radical Limited for

Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti

AUM up 30% in FY24, record flows, forecasts raised

AUM jumped £3.8bn or +30% in FY24, reaching £16.6bn on 31 Mar 24, 12% above our previous forecast of £14.7bn. Including 50%-owned 8AM Global, Assets Under Influence hit £17.6bn. Investment performance provided a tailwind, adding £1.5bn to AUM. But our key takeaway from Tatton’s hugely impressive last few years, is that it has designed and implemented a superior offering in platform-MPS with net flows consistently far higher than peers. That leadership looks even more pronounced in H2-24 with net

Morning Note – 18 April 2024

NextEnergy Solar Fund – High- and growing-income opportunity?

NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a