SEGRO's NAV growth fails to impress

24th Feb 2011 15:47

Property company SEGRO saw net asset value (NAV) per share grow 3.4% in 2010 and trimmed its vacancy rate to 12.0% at the end of the year from 13.5% at the end of 2009.NAV per share rose from 354p at the end of 2009 to 366p at the end of 2010. Adjusted NAV per share - calculated using the European Public Real Estate Association (EPRA) methodology - advanced 2.5% to 376p from 367p the year before.Net rental income climbed 4.7% to £282.1m from £269.4m, while profit before tax was £197.2m, compared to a loss of £248.1m in 2009."The full year results from SEGRO were as expected. Good gains in occupancy have meant voids have narrowed. However the valuation performance has significantly underperformed other majors that have reported recently," reckoned broker Peel Hunt.The departure of Ian Sutcliffe, managing director of SEGRO's UK operations, was also unexpected, the broker added. "The departure, to some extent, means there are questions over the senior property expertise at the company. That said, David Sleath, new chief executive, we think will be calculated in a new appointment or may restructure the overall property division," Peel Hunt speculated.The company, which has barely got over digesting its 2009 acquisition Brixton Estates, said gearing has been reduced to 80% while the loan to value ratio is now 46%. Chief executive Ian Coull, who is set to retire in April, said: "Enquiry levels remain robust and we have a very healthy pipeline of attractive pre-let projects. We remain focused on our key priorities to increase occupancy, improve the portfolio and prudently manage our financial position. Although we expect many of the challenges in 2010 to continue into 2011 we are confident that, given our high quality portfolio and strong team, SEGRO is well positioned to continue to make progress and to benefit from the emerging recovery."