Segro full year results

[daveh]

Can be found here:
www.investegate.co.uk/article.aspx?id=2 ... 1331X&fe=1

SEGRO plc ('SEGRO' / 'Company' / 'Group') announces its results for the year ended 31 December 2016.

· Strong results, financial position and momentum, with a high quality pipeline of growth opportunities.

· Adjusted EPS up 7.1 per cent to 19.7 pence (2015: 18.4 pence) was underpinned by a 4.0 per cent increase in like-for-like net rental income, a continued low vacancy rate at 5.7 per cent and a strong contribution from development completions. IFRS EPS of 53.9 pence (2015: 91.7 pence), which includes the impact of unrealised capital gains on the portfolio, reflects continued capital growth but at a slower rate.

· EPRA NAV per share up 8.0 per cent to 500 pence, driven by a 4.8 per cent like-for-like increase in the value of the portfolio, reflecting development gains, UK rental growth and asset management activities.

· Occupier and investor demand for modern warehousing remains resilient. Occupier demand remains strong from a broad range of business sectors, particularly from retailers adapting their supply chains to the rapid growth of internet retailing. The result of the EU referendum has had little apparent impact on occupier and investor demand for well located, modern urban and big box warehouses.

· Future earnings prospects underpinned by the largely de-risked development programme. Developments under construction have the potential to generate £27 million of new rent, of which 61 per cent has been pre-let. A further £27 million is available from conditional pre-let and potential speculative projects which are expected to start in the coming months.

· Final dividend increased by 5.7 per cent to 11.2 pence (2015 final dividend: 10.6 pence).


Dividend paid 4th May, record date 24th March, XD 23rd March

[daveh]

They also say:

Dividend increase reflects a strong year and confidence for the future

Under the UK REIT rules, we are required to pay out 90 per cent of UK-sourced, tax-exempt rental profits as a 'Property Income Distribution' (PID). Since we also receive income from our properties in Continental Europe, our total dividend should normally exceed this minimum level and we target a payout ratio of 85 to 95 per cent of Adjusted profit after tax. We aim to deliver a progressive and sustainable dividend which grows in line with our profitability in order to achieve our goal of being a leading income-focused REIT.



The Board has concluded that it is appropriate to recommend an increase in the final dividend per share of 0.6 pence to 11.2 pence (2015: 10.6 pence) which will be paid as a PID. The Board's recommendation is subject to approval by shareholders at the Annual General Meeting, in which event the final dividend will be paid on 4 May 2017 to shareholders on the register at the close of business on 24 March 2017.

In considering the final dividend, the Board took into account:

· the policy of targeting a payout ratio of between 85 and 95 per cent of Adjusted profit after tax;

· the desire to ensure that the dividend is sustainable and progressive throughout the cycle; and

· the results for 2016 and the outlook for earnings.

The total dividend for the year will, therefore, be 16.4 pence, a rise of 5.1 per cent on 2015 (15.6 pence) and represents payment of 87 per cent of Adjusted profit after tax and 83 per cent of Adjusted EPS.

The Board has decided to retain a scrip dividend option for the 2016 final dividend, allowing shareholders to choose whether to receive the dividend in cash or new shares. In 2016, 32 per cent of the 2015 final dividend and 19 per cent of the 2016 interim dividend was paid in new shares, equating to £29.5 million of cash retained on the balance sheet and 7.1 million new shares being issued.

[Dod1010]

Good results. I wish held more of them. In case no one noticed, Primary Health Properties also posted decent results yesterday although with a more modest increase in the dividend. I hold both as well as British Land, with its exposure to London office blocks. I prefer Segro and PHP.

Dod