LONDON (Alliance News) - Town Centre Securities PLC said Wednesday that pretax profit in the full-year jumped, boosted by an increase in the value of the company's investment portfolio as it reported strong performances in its property and car parking businesses.
In its full-year results for the year to June 30, the company said pretax profit jumped to GBP27.4 million from GBP3.6 million the year before. Revenue came in marginally higher than the prior year at GBP22.6 million compared to GBP22.4 million.
The Leeds-based property investment, development and car parking company said the pretax profit improvement reflects a property revaluation surplus of GBP19.8 million for the year, compared to a deficit of GBP3.8 million last year, said the company. On a like-for-like basis Town Centre Securities recorded a 9.9% or GBP27 million increase in the value of its investment portfolio.
The like-for-like increase in value of the company's investment portfolio this year has been 10%, reflecting an initial yield of 6.4%, compared to 7.2% the prior year. After including acquisitions and developments the portfolio at the year-end stood at GBP325.2 million, compared to GBP301.0 million the year before. The current occupancy rate is 97.5%.
On a divisional basis, the company said its largest asset, The Merrion Centre in Leeds, generated good returns on its refurbishment and investment programme with its Arena Quarter retail, leisure and car park project - the New Front - opposite the new First Direct Arena nearing completion with further expenditure of GBP6.5 million this year bringing the total to GBP9.4 million. The company said that it leased four further units and renewed another during the period - 76% of the rental income is now secured on an average weighted unexpired term of 13.6 years - and that interest in the remaining units is strong.
Town Centre Securities said car parking revenue has increased by 4% to GBP5.1 million and profit is up to GBP2.6 million for the period, with the company recording strong performances at Whitehall Road, Leeds, due to contraction of supply, and Manchester, due to increased business contracts. "Revenue has decreased at Merrion due to the refurbishment works although the disruption has been minimised through intensive management. We are scheduled to complete the works in December this year and we will be aggressively marketing what will be one of the best car parks in Leeds," said the company.
The property developer also announced a lease renewal with Morrisons, set to result in an expansion of the store by around 20%, adding approximately GBP500,000 per year to rental income, said Town Centre. The transaction relocates a Peacocks and a 3 Store within the centre, significantly improving the overall retail offering, it added.
The company declared a final dividend of 7.34 pence per share, which, together with the interim dividend of 3.1 pence per share, provides an unchanged total dividend of 10.44 pence per share for the year.
"We have produced another strong trading performance and our properties are now starting to show some of the growth which we have seen in London recently," said Chairman and Chief Executive Edward Ziff.
"Our returns to shareholders are showing the benefit of our continuing intensive management and regular churning of the portfolio. Recent letting deals in the Merrion Centre have been exceptional and we have seen excellent growth in value as well. The car park business has also out performed. We remain conservatively funded and committed to delivering superior cash returns to shareholders," he added.
Looking ahead the company admits that while it has seen some "extraordinary figures" emanating from London and the south east, this growth has been and remains patchy, and therefore reiterated its commitment to making selective acquisitions and sell-off assets which do not fit with its strategy.
"We expect to see continued growth from the Merrion Centre as we continue with its regeneration and we are optimistic about our Scottish portfolio once the disruption from the referendum settles down. Manchester as a city remains active and we hope to make further progress this year. We have also started investing selectively in London, particularly in suburban shops. We expect to see good performance from all these sectors this year along with the expansion of the car park business," said Ziff.
Shares in Town Centre Securities were Wednesday trading 0.86% lower at 230.00 pence per share.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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