Segro, the FTSE 100-listed property investment company, reported a 25.7% rise in full-year pre-tax profit on Friday, thanks to strong client retention rates and like-for-like rental growth.
The company, which launched a £573m rights issue in March 2017 to help strengthen its balance sheet, also reported the completion of £2.7bn in financing to reduce debt.
Full-year financial highlights
- Adjusted profit before tax rises 25.7% to £194.2m
- Adjusted earnings per share up 5.9% to 19.9p
- Portfolio valuation rises 13.6% to £8.04bn
- Net asset value per share up 15.4% to £5.54
- Final dividend increased by 6.1% to 11.35p
The company issued an upbeat outlook, saying future earnings prospects were underpinned by 1.2 million square metres of development projects under construction or in advanced pre-let discussions - equivalent to a fifth of its current portfolio, and capable of generating £43m in rent.
Further 'near-term' pre-let projects associated with £22m of rent were at advanced stages of negotiation, the company added.
David Sleath, chief executive (left), said: "Segro has delivered another strong set of results in 2017 with some of our best ever operating metrics, underpinned by record levels of development completions - almost all of which is pre-leased.
"Occupier demand in early 2018 is strong across all our markets and supply of modern warehouse space remains constrained.
"The structural drivers of demand in our sector (urbanisation, growth of the digital economy and e-commerce) are likely to underpin occupier demand for some time to come and these, coupled with our modern, well-located assets, our current development pipeline and our land bank all offer significant opportunities for future growth."
Investors were impressed with the results and the outlook and pushed the shares 5.29% higher to 584.6p in early trade on the London Stock Exchange.
Picture courtesy of Segro website