H1 19 Interim Results

Key Points. Mucklow’s interims show a steady performance with rental income up 4.2% driven by lease renewals, rent reviews, and a noteworthy fall in the vacancy rate to another record low of 2.4% (Jun 18: 2.8%). As a result, underlying PBT increased 6.3% YoY with growth of c.5% at the EPS level. Of significance, EPRA NAV grew by 2.3% (ahead of our expectations) to 572p (Jun 18: 559p) driven by a £8.7m revaluation gain (H1 18: £14.1m) demonstrating ongoing demand for industrial property in the Mi

AGM Trading Statement

Mucklow has released its AGM trading statement for the period from 1 July 2018 to 12 November 2018. Of note, the group has been able to maintain its record low vacancy rate of 2.8% that was reported at the finals in September, reflecting the continuing strong demand for regional industrial property, and the company’s active approach towards managing its portfolio.

Board Changes

Mucklow has announced that Justin Parker, Managing Director will be stepping down from the Board, and will leave the company on 31st December 2018 “to pursue new challenges in the property industry.”

Prelims FY18 – Valuation Growth with Record Low Voids

Finals showed a solid performance from Mucklow with EPRA NAV ahead of expectations, up 18.7% to 559p (Arden: 510p) driven by a revaluation gain of £49.7m (FY17: £13.0m) reflecting the continued investor appetite towards industrial property in the Midlands. Adjusted PBT (excluding these gains, and other exceptionals) decreased slightly to £15.7m (FY17 & Arden: £15.9m) driven by a one-off increase in property costs owing to the refurbishment of vacant properties.

Interims

Mucklow’s interim results reflect a stable performance with adjusted PBT increasing 1.3% YoY to £8.0m driven by gross rental income growth of 1.7% (to £12.0m), in line with our expectations, and EPRA EPS increasing by 2.7% to 12.88p. The company highlights consistent strong investor demand for industrial property in the Midlands as a key driver and, regarding the outlook, the company believes that market conditions will continue to be favourable for the rest of the year. As such we make no chang

AGM Update – Market conditions remain favourable

Mucklow’s AGM update reports that the portfolio has continued to benefit from steady occupier demand enabling the company to maintain the solid financial performance seen last year.

High quality assets, attractive yield

Mucklow has been one of the best performing UK REITs over the last 10 years, driven by the conservative long-term strategy and the astute reading of the property cycle. Looking forward we believe that the company’s Midlands industrial focus leaves it well-placed to benefit from structural and cyclical trends that should drive good growth in rents, dividends and capital values.

Positive AGM Update

Mucklow reports that the Group has maintained its positive momentum during the first four months of the year. Demand for space has remained steady against a background of declining availability with a record high for occupancy of 97.1% and increasing rental levels.

Interims – Occupier markets remain strong

Mucklow’s interims report a continuation of the positive trends in occupier markets seen last year but a more subdued period for investment markets. Strong occupier demand resulted in a reduction in voids to 4.7% at December 2015, which helped underlying PBT increase 16% to £7.5m. After the strong valuation gains seen in the last two years, there was a further small uplift, leaving NAV/share up 2.6% at 438p. The interim dividend was increased by 3% to 9.59p.

AGM - Rents and values continue to improve

Mucklow’s AGM reports a continuation of the positive trends seen last year. The availability of modern industrial space across Midlands “has continued to decline” and occupier demand has remained at good levels. This is driving rental growth with higher rents “consistently being achieved on new lettings and lease renewals” and the vacancy rate has declined from 5.4% at the year end to a record of low of 4.7% currently, which “may reduce further” by the end of H1.

CMD - Broadening & deepening client relationships

A dose of morosity

No change in the narrative. Aviva’s ship sails on as usual. The PRT business is still going well, inflation remains an impediment to a strong P&C improvement, retail customers seem more interested in the rising cost of living than savings’ products and Aviva investors see no real signs of an improvement. This is the same story as in recent quarters and, in that context, our thesis remains the same.

'Airlines will be shocked when Covid leases run out and rates go up’

Morning Note – 24 May 2023

The Opportunity in Short-Termism

Fears vs Fundamentals (again) For 2 years, European banks have enjoyed potent earnings upgrades. For 2 years, valuations have been trapped between ''unease'' and ''outright panic'' multiples. This note looks at the latest fears and fundamentals behind this ongoing struggle. We extract lasting lessons from Q1, a record profit quarter, and extend our work on the fears of the moment: ''peak NIM'', CRE and credit contraction. Peak NIM - no, not yet We refresh our top-down margin work for the late

In the Flow

Industry flows - bond funds remain preferred over equities Risk appetite for equity funds remained subdued with last week seeing $4bn net outflows (negative in 8 of the last 9 weeks). Flows worsened sequentially for Asia/EM categories, but improved for US and European equities. Bond funds saw inflows for a 10th straight week (c.$8bn) with broad based inflows across US government, IG and HY funds. Listed asset managers flows - inflows into ETFs, outflows from mutual funds ETFs net inflows contin

NAHL Group plc: AGM update: Continued progress in scaling the business for future growth

NAHL’s AGM statement released today, is encouraging as management continues to scale the businesses for further growth. As a result, the Board’s expectations for the full year remain unchanged and we make no alterations to our forecasts. As a reminder, these still call for a c.13% increase in adjusted PBT in 2023, c.170% in FY24 and a further c.70% in FY25. Our current fair value remains at 65p but this is likely to rise as the Group delivers on its significant potential.

Morning Note – 30 May 2023

WH Ireland: Avation - Market tailwinds highlighted in Bloomberg Intelligence event

Avation is a lessor of 35 commercial aircraft to a diversified client base of 17 airlines. Yesterday's Bloomberg Intelligence webinar event entitled ‘Aircraft Lessor Recovery and Innovation' reaffirmed a number of positive market trends for aircraft lessors at the present time. Key points included: i) structural deficits in the supply of turboprop aircraft in the coming years, with aircraft retirements expected to outpace limited production of new aircraft; ii) the strong recovery in air travel

This Week's AIM Highlights 19th May

Early Mover in UK Lab-grown Meat

BSF Enterprise Plc (BSF) is a biotechnology company focused on acquiring, combining, and building businesses in the lab-grown tissue space. It aims to achieve this through an acquisition-led growth strategy and has already acquired the tissue engineering and cellular agriculture company, 3D Bio Tissues.

Very strong CY22 - CY23 upgraded 10%

An Asian exploration

We spent last week with HSBC and STAN in Hong Kong and Singapore, delving into the detail of structural drivers for Asia. Both banks have a good story to tell, with business models that are well positioned and being enhanced further. In isolation we did not learn enough to warrant a change in recommendation but tailwinds from the region are not to be overlooked. A deep dive into a core part of the investment case Asia sits at the core of the investment case for both HSBC and STAN given its share

c.60% discount to NAV... Can deep value prevail?

Petershill (PHP) reported a Q1-23 double digit % headline miss on FRE/DE mostly driven by cyclical factors. However, fundraising was resilient including more closings after quarter end and PHP reiterated FY2023 guidance ($220-250m FRE). We remain outperform, 250p target price. Weakness on headline earnings amid a muted industry backdrop Private markets are being tested in 2023 with private equity deal activity down c.50-80% y/y. In this context, the headline Q1 miss was mostly driven by cyclica

Trading update indicates strong FY23 performance