Paul Arenson, Stenprop CEO said: “We are pleased to announce solid results for the interim reporting period which reflects the quality of our portfolio.
“We remain focused on property investments in the UK and Germany with emphasis on commercial and retail assets which offer the best opportunities and growth enhancement for our portfolio. Importantly, our office assets are in good locations and fully let with little exposure to financial services companies which we regard as higher risk following Brexit.”
As at 30 September 2016 the Company’s real estate portfolio comprised an interest in 55 properties valued at €839.8 million, with 40% in the United Kingdom, 42% in Germany and 18% in Switzerland (by value). This includes the assets held for sale. The portfolio, with a gross lettable area of approximately 254,100 m² and gross annual rent of €50.9 million, is predominantly in the office and retail sectors accounting for 50% and 38% of rental income respectively.
“We have made a decision to sell the more mature assets in Switzerland and recycle the capital received into assets with long-term growth potential in value and earnings within the UK and Germany,” says Arenson.
Adjusted EPRA earnings attributable to shareholders were higher at €15.2 million compared to €14.3 million the previous year. This equates to a 3.0% increase to diluted adjusted EPRA EPS of 5.32 cents year-on-year (2015: 5.17 cents). Diluted EPRA net asset value per share decreased 7.8% to €1.54 per share primarily due to the depreciation of Sterling since the Brexit vote.
“Our loan to value target ratio is stable and we continue to manage our debt profile by optimising the terms, including interest rates, maturity terms and covenants, whilst minimising capital repayments.
“During the reporting period, we also repurchased approximately 1.3 million shares for €1.8 million at an average price of €1.29, excluding the final dividend of 4.7 cents, to enhance liquidity in our share,” says Patsy Watson, CFO of Stenprop.
Approximately 45% of Stenprop’s net asset value is in Sterling with the Sterling:Euro exchange rate having a material impact on its Euro earnings and net asset value. Although currency volatility presents challenges, Stenprop has adopted and maintained a long-term multi-currency foreign exchange policy with no currency hedges.
Bank debt at 30 September 2016 was €438.8 million, resulting in an average loan to value ratio of 52.7%, up marginally from 51.6% at year-end, as a result of a decrease in the value of the UK portfolio following Brexit.
“Taking into account the impact of currency fluctuations going forward we are confident that we will continue to deliver sustainable balanced growth for our shareholders,” concluded Arenson.