Mucklow property portfolio value up as half-year profits rise

19th Feb 2014 07:03

A boost in rental income helped Midlands-based commercial property developer Mucklow increase half-yearly pre-tax profits to 14.1m pounds from 8.1m pounds. The group said its property portfolio value rose to £278.5m from £262.7m with rental income rising £0.61m to £21.7m after it bought two more investment properties for a total consideration of £6.71m excluding stamp duty and purchase costs, at an average net initial yield of 8.6%.Shareholders will receive an interim dividend of 9.04p a share, an increase of 3%. Vacancy rates fell to 6.2% from 6.7% and Chairman Rupert Mucklow said there were signs "we may have reached a turning point in the property cycle during the first half year, with strengthening occupational demand outstripping supply and a growing appetite from Investors, pushing up property values"."Economic forecasts are certainly looking better and business confidence is improving. We intend to continue our strategy of investing in quality industrial and commercial properties in the Midlands, with attractive long term growth prospects and we anticipate another satisfactory performance in the second half year," he added.Underlying pre-tax profit and adjusted earnings per share, which excludes property revaluations and profit on the sale of investment and trading properties were lower at £6.3m and 10.41p against £6.9m and 11.44p last time. Mucklow said the fall was due to a combination of extra spending on various properties to help market vacant space, rent free incentives for existing tenants in order to secure longer leases and higher bank financing costs."The regional investment market has started to gain some momentum. There has been an increase in the number of investors looking to buy modern industrial and commercial properties, with a limited supply of quality stock available," Mucklow said.FP