LONDON (Alliance News) - Palace Capital PLC on Tuesday said it expects its full-year results will be in line with market expectations, and said it intends to lift its dividend for the year by 23% due to strong income returns.
The property investor said it intends to offer a final dividend of 9.00 pence per share for the year ended March 31, up from 7.00p per share a year earlier, which will take its full-year dividend to 16.00p per share. The year earlier, it paid 13.00p.
Palace Capital ended its financial year with a portfolio of 55 properties which had a contracted rent roll of GBP13.5 million per annum and a net income of GBP11.8 million, it said.
Palace Capital said as part of its audit for the year ended March 31, it has commissioned independent valuations of the portfolio, and the updated values of the properties will be disclosed within the preliminary results announcement on June 6.
Palace Capital said it anticipates that this independent valuation will show an overall uplift in the valuation of the company's portfolio, "partly as a result of the active asset management steps being undertaken".
Palace Capital said that, since the year end, it has received planning permission from the City of York Council for its conversion of Hudson House into 82 apartments and 37,000 square feet of offices. The company said this approval should result in a "considerable increase" in the valuation.
Palace Capital added that the mixed-use leisure scheme in Halifax that it acquired two months ago is a "long-term hold with strong covenants on long leases". The company said it intends to take advantage of historically low interest rates for the scheme and has received indicative terms from an unnamed major insurance company to replace the existing short-term facility for the scheme with a new 10-year loan of GBP15.2m at a fixed interest rate of around 3.5%.
Palace Capital noted that it has signed contracts with AIM-listed Quarto Publishing PLC to take leases on four floors of its Ovest House property in Brighton, at a rental of GBP20 per square foot and said there is considerable potential in this asset.
Refurbishment works at its retail and residential scheme in Dartford, Kent, is on track to be completed in August of this year, Palace Capital said, whilst the Bank of England has agreed to extend its lease at office building Bank House in Leeds by a further three years.
Palace Capital said it is currently in a position to take advantage of the recently agreed GBP30.0 million revolving credit facility with NatWest Bank to make "further opportunistic purchases".
"I am delighted with the progress we are making. Palace Capital is an exciting company with strategic assets in growth locations and we continue to identify off-market opportunities at sensible prices which will enable us to grow the company and the net asset value," said Chief Executive Neil Sinclair.
Shares in Palace Capital were up 2.9% at 355.00p on Tuesday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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Palace Capital (PCA)