(Alliance News) - Segro PLC on Friday hiked its dividend as it reported increased earnings boosted by rental growth and development completions.
The London-based industrial property investor said pretax profit swung to a GBP636 million gain in 2024, from a loss of GBP263 million in the previous year.
On an adjusted basis, pretax profit climbed 15% to GBP470 million from GBP409 million in 2023. The primary difference between the adjusted and reported figures is the realised and unrealised portfolio property gains which are not included in the adjusted figures.
The company said net rental income grew 7.0% to GBP628 million from GBP587 million, due to 5.8% like-for-like rental growth and new developments.
The firm declared a final dividend of 20.20 pence, up 5.8% from 19.10 pence. The 2024 full-year dividend was 29.30 pence, an increase of 5.4% from 27.80 pence in 2023.
Segro gained GBP91 million in new headline rents during the period, compared to GBP88 million in 2023. Development completions added GBP37 million of potential new headline rent, at a yield on cost of 6.9%.
Looking ahead, the company said it is confident in its future growth prospects.
Segro said it has the potential to secure GBP173 million of additional rental income from its standing portfolio through capturing existing rent reversion and leasing vacant space.
It can deliver GBP422 million of new rent from development of its land bank, the company said.
Segro said conversations with occupiers have picked up pace in recent weeks, and it expects leasing and pre-letting activity to increase.
The company has developed "strong relationships with global data centre players" through its role in creating a hub of data centres in Slough, which it sees as an "exciting, high-growth opportunity".
"Our business is therefore well-placed for further attractive, compounding growth in earnings and dividends in the years ahead, with significant additional value upside from our data centre pipeline," the company said.
Chief Executive David Sleath said: "We have created the largest data centre hub in Europe and are increasingly excited about the exceptional value creation opportunity from our pipeline of 2.3 gigawatt European data centre sites in core availability zones. We plan to pursue the most attractive risk-adjusted returns on each opportunity, including initially working with partners to develop fully-fitted data centres.
"We have strong conviction in the enduring structural trends that are driving occupier demand for our space. Our business, with its high-quality, well-located, urban-weighted portfolio, exceptional land bank and strong balance sheet is primed for further growth."
Segro shares were down 0.6% at 717.40 pence in London on Friday morning.
By Michael Hennessey, Alliance News reporter
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Segro (SGRO)
