Schroder Real Estate Investment Trust Ltd (SREI)

Sector:

Real Estate

Index:

FTSE Small Cap

33.10p
   
  • Change Today:
    -0.30p
  • 52 Week High: 58.00
  • 52 Week Low: 30.10
  • Currency: UK Pounds
  • Shares Issued: 565.66m
  • Volume: 304,972
  • Market Cap: £187.24m

Schroder Real Estate manages to outperform benchmarks in full-year results

By Josh White

Date: Tuesday 21 May 2019

LONDON (ShareCast) - (Sharecast News) - UK-focussed Schroder Real Estate Investment Trust confirmed the delivery of a 5% dividend increase in its full-year results on Tuesday, adding that its net asset value had improved 0.7% to £356.4m.
The London-listed real estate investment trust said its net asset value total return slid to 4.5% in the year ended 31 March, from 10.5% in the prior year, reflecting the impact of one-off refinancing and acquisition costs.

Adjusted EPRA earnings improved to £15.2m from £14.1m year-on-year, which resulted in dividend cover of 114%, up from 109%.

Profit for the year totalled £15.9m, down from £33.8m.

During the year, Schroder Real Estate extended the term of its loan facility with Canada Life at a lower rate, and increased the capacity of the Royal Bank of Scotland revolving credit facility to maximise operational flexibility.

Its loan-to-value ratio, net of all cash, reduced to 22.1% from 29.2% during the period.

On the operational front, Schroder Real Estate said it sustained the outperformance of its real estate portfolio during the year, with a total return of 7.2% compared to the IPD/MSCI Benchmark Index of 5.2%.

That resulted in annualised outperformance of 2.0% over the past 12 months, 2.5% per annum over the past three years and 1.4% per annum since IPO in July 2004.

Schroder said its portfolio was supported by "strong" fundamentals, with 93% of the portfolio located in 'Winning Cities', and 68% of its portfolio weighted to the office and industrial sectors - up from 63.5% - with no City of London or shopping centre investments.

Three acquisitions of regional officers were made during the year in Edinburgh and Nottingham, as well as an adjoining industrial ownership in Milton Keynes, totalling £21.85m, equating to a yield based on contracted rental income of 7%.

It said it improved its rental profile with a reversionary income yield of 7.1%, compared to the MSCI/IPD Benchmark Index of 5.4%

A total of £50m of disposals were contracted during the year, and since the year ended, at a blended initial income yield of 2.9%, which Schroder said crystallised its profits from asset management.

It had a pipeline of asset management opportunities to capture future rental growth and improve the defensive characteristics across the portfolio, with the board adding that undrawn loan facilities and cash provided "important" operational flexibility.

"A combination of cash and undrawn revolving credit facilities provides an opportunity to reinvest following a market correction at higher yields," said Schroder Real Estate chairman Lorraine Baldry.

"This places the company in a strong situation and successful execution of this strategy combined with delivering asset management initiatives should provide support for future income, valuation and dividend growth."

Duncan Owen, global head of Schroder Real Estate, added that successful execution of the firm's strategy over the year had supported a dividend increase in contrast to the real estate market slowdown.

"It has also further enhanced our flexibility and balance sheet strength against the backdrop of a more uncertain market environment.

"Recent disposals have realised profits at the same time as the market is experiencing wider price falls."

Reinvestment would target higher income returns than the sales, Owen explained, and that would increase net operating income.

"In the meantime, the company is positioned to explore alternative refinancing strategies which may further increase net operating income.

"For this reason we believe the company is well placed to deliver on its long term objectives and to pursue a progressive dividend policy."

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SREI Market Data

Currency UK Pounds
Share Price 33.10p
Change Today -0.30p
% Change -0.90 %
52 Week High 58.00
52 Week Low 30.10
Volume 304,972
Shares Issued 565.66m
Market Cap £187.24m

SREI Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
40.78% above the market average40.78% above the market average40.78% above the market average40.78% above the market average40.78% above the market average
28.57% above the sector average28.57% above the sector average28.57% above the sector average28.57% above the sector average28.57% above the sector average
Price Trend
66.44% below the market average66.44% below the market average66.44% below the market average66.44% below the market average66.44% below the market average
75% below the sector average75% below the sector average75% below the sector average75% below the sector average75% below the sector average
Income
29.28% below the market average29.28% below the market average29.28% below the market average29.28% below the market average29.28% below the market average
25% below the sector average25% below the sector average25% below the sector average25% below the sector average25% below the sector average
Growth
84.58% below the market average84.58% below the market average84.58% below the market average84.58% below the market average84.58% below the market average
88.89% below the sector average88.89% below the sector average88.89% below the sector average88.89% below the sector average88.89% below the sector average

SREI Dividends

  Latest Previous
  3rd Interim 2nd Interim
Ex-Div 27-Feb-20 05-Dec-19
Paid 13-Mar-20 18-Dec-19
Amount 0.77p 0.65p

Trades for 09-Jul-2020

Time Volume / Share Price
16:35 14,735 @ 33.10p
16:29 40 @ 33.05p
16:28 896 @ 33.95p
16:23 57,280 @ 33.10p
16:21 313 @ 33.80p

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