SEGRO PLC (SGRO)

[idpickering]

Trading Update.

Summary

Occupier market dynamics remain favourable, supporting the delivery of strong rent roll growth during the quarter.
Market data showing signs of stabilisation in industrial asset values.
Strong balance sheet for continued investment to drive further growth in earnings and dividends.
David Sleath, Chief Executive, said:

“2023 has started well for SEGRO. Occupier demand continues to be high and is coming from a diverse range of customers, whilst supply remains limited across all our markets. These favourable dynamics, combined with the active asset management of our prime portfolio, have enabled us to drive strong rent roll growth from the leasing of recently completed space and the capture of reversion and indexation from our standing assets. We have also added to our profitable development pipeline through further pre-lets and have projects equivalent to £84 million of additional rent under construction or due to start shortly.

“Market data is showing signs of stabilisation in asset values, although investment activity remains subdued. This is most evident in the UK where the indices show that values are broadly flat over the first quarter, but also in Continental Europe, as supported by a valuation exercise relating to the SELP portfolio which indicated only a small decline in values during the first three months of the year.

“Despite wider uncertainty arising from recent events in the credit markets, we remain well positioned with significant liquidity, no near-term refinancing requirements and modest leverage. We have considerable capacity to continue investing in our portfolio in a disciplined manner and expect this to deliver further compound growth in earnings and dividends during 2023 and beyond.”

https://www.investegate.co.uk/segro-plc ... 0000Z2649/

Ian.

[idpickering]

Result of AGM.

https://www.investegate.co.uk/segro-plc ... 1300Z3429/

Ian.

[tjh290633]

Interim Results. For some reason they are not on Investegate, but are on ADVFN:

http://uk.advfn.com/stock-market/london ... N/91657760

"SEGRO has performed well during the first six months of 2023, delivering rental growth from our standing portfolio and from our largely pre-let development programme. We have made great progress in capturing reversion, delivering an average rental uplift of 20 per cent at lease events during the period in addition to contracted indexation, whilst customer retention has increased significantly to 85 per cent.

"The structural drivers of occupier demand remain evident across the UK and Europe, whilst supply remains constrained in our chosen markets, helping to drive rental growth in line with our expectations.

"Valuations have been relatively stable in the first half of this year, following the deep valuation correction in the latter part of 2022. The increased volume of transactions in the last quarter indicates that investors see value at the current levels of pricing for prime industrial and logistics assets, given the positive long-term outlook for our sector.

"We have significant opportunities to drive rent and create value both within our standing portfolio and through the execution of our profitable development programme. These factors give us confidence in our ability to deliver attractive growth and returns into the years ahead."

And about the dividend:

Consistent with its previous guidance that the interim dividend would normally be set at one-third of the previous year's total dividend, the Board has declared an increase in the interim dividend of 0.6 pence per share to 8.7 pence (H1 2022: 8.1 pence), a rise of 7.4 per cent. This will be paid as a Property Income Distribution (PID) on 22 September 2023 to shareholders on the register at the close of business on 9 August 2023.

The Board will offer a scrip dividend option for the 2023 interim dividend, allowing shareholders to choose whether to receive the dividend in cash or new shares. In respect of the 2022 final dividend, 49 per cent of shareholders, representing GBP107 million of dividend payments, elected for the scrip option which resulted in the issue of 14.5 million new shares.

Nice increase.

TJH

[77ss]

Interim Results. For some reason they are not on Investegate, but are on ADVFN:

http://uk.advfn.com/stock-market/london ... 91657760...


TJH

Thanks for that Terry. I was wondering.

For some reason, Investegate has had no SGRO postings since 20th April! Odd.

[daveh]

Interim Results. For some reason they are not on Investegate, but are on ADVFN:

http://uk.advfn.com/stock-market/london ... 91657760...


TJH

Thanks for that Terry. I was wondering.

For some reason, Investegate has had no SGRO postings since 20th April! Odd.

There was a qtrly update yesterday. Can't find it on investegate, but it is on the Segro website.

https://www.segro.com/investors/financi ... ing-update

[tjh290633]

For some reason these were hard to find today. Eventually via https://www.londonstockexchange.com/new ... ecode=SGRO and https://www.segro.com/investors/financi ... ar-results one is led tohttps://www.segro.com/media/qfmdnpbz/ ... -final.pdf where the essential details can be found.

The Board has concluded that it is appropriate to recommend an increase in the final dividend per share by 0.9 pence to 19.1 pence (2022: 18.2 pence). We will pay the 2023 final dividend as a PID and expect to pay the 2024 interim dividend as an ordinary dividend. The Board’s recommendation is subject to approval by shareholders at the 2024 Annual General Meeting to be held on 18 April 2024, in which event the final dividend will be paid on 3 May 2024 to shareholders on the register at the close of business on 15 March 2024.

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 2023 and the outlook for earnings.

The total dividend for the year will, therefore, be 27.8 pence, a rise of 5.7 per cent versus 2022 (26.3 pence) and represents distribution of 85 per cent of Adjusted profit after tax.
The Board has decided to retain a scrip dividend option for the 2023 final dividend (subject to approval by shareholders at the 2024 AGM), allowing shareholders to choose whether to receive the dividend in cash or new shares. In 2023, 49 per cent of the 2022 final dividend and 21 per cent of the 2023 interim dividend were paid in new shares, equating to £129 million of cash retained on the balance sheet.

and

FINANCIAL CALENDAR                                 
2023 final dividend ex-div date                       14 March 2024
2023 final dividend record date                       15 March 2024
2023 final dividend scrip dividend price announced    22 March 2024
Last date for scrip dividend elections                12 April 2024
2023 final dividend payment date                         3 May 2024  
2024 Q1 Trading Update                                18 April 2024
Half Year 2024 Results (provisional)                  26 July 2024

Frustratedly

TJH
(Also posted in HYP-Practical)

[daveh]

Results of placing and retail offer:

https://www.investegate.co.uk/announcem ... er/8059688

SULTS OF PLACING AND RETAIL OFFER



SEGRO plc ("SEGRO" or the "Company" or the "Group") announces the successful pricing of the non-pre-emptive placing of new ordinary shares of 10 pence each in the capital of the Company (the "Ordinary Shares") announced on 27 February 2024 (the "Placing"). In light of the strong demand received both from existing investors and potential new holders, the Board has decided to increase the size of the raise from approximately £800 million to £900 million.

David Sleath, Chief Executive, said: "We appreciate the support from our investor base for this equity placing and the confidence it demonstrates in our business. In addition to the profitable growth opportunities within our development pipeline, we expect further exciting opportunities to emerge in the coming months which this additional capital will help us to deliver."

A total of 109,756,098 new Ordinary Shares in the capital of the Company (the "Placing Shares") have been placed by Morgan Stanley & Co. International plc ("Morgan Stanley") and UBS AG London Branch ("UBS", and together with Morgan Stanley, the "Joint Bookrunners") at a price of 820 pence per Placing Share (the "Placing Price"). Barclays Bank PLC ("Barclays") and BNP PARIBAS ("BNPP") are acting as co-bookrunners in connection with the Placing (Barclays and BNPP together, the "Co-Bookrunners" and together with the Joint Bookrunners, the "Banks").

Concurrently with the Placing, retail and other investors have subscribed in the offer made by the Company via the PrimaryBid platform for a total of 829,268 new Ordinary Shares in the capital of the Company (the "Retail Offer Shares") at the Placing Price (the "Retail Offer").

The Placing and Retail Offer in aggregate comprised 110,585,366 new Ordinary Shares which will raise gross proceeds of approximately £907 million for the Company. The Placing Price of 820 pence represents a discount of 3.4% per cent to the closing price on 27 February 2024, which was 849 pence. The Placing Shares and Retail Offer Shares, in aggregate, represent approximately 9.0% per cent of the existing issued ordinary share capital of SEGRO prior to the Placing. The dilutive impact for existing SEGRO shareholders resulting from the Placing and the Retail Offer represents approximately 8.3% per cent. of the Company's issued share capital.

I don't recall seeing anything about this placing in advance or what the cash raised it is to be used for. I wouldn't have been interested in taking it up as I have a rather full holding already and it is way down towards the bottom of my HYPTUSS list. It's one of the few shares I've actually top sliced in the past because it became a too large holding.


Though they do say:

The proceeds of the Placing and Retail Offer of approximately £907 million in aggregate will allow the SEGRO group to pursue additional growth opportunities, including new and existing development projects and to take advantage of potential acquisition opportunities which may arise, whilst maintaining a strong balance sheet.

So nothing specific.

[Dod101]

I too missed the initial announcement. If not participating there is a significant dilution and for that reason if no other I might well have applied for new shares. Not that I would necessarily have got them of course.

Dod

[daveh]

I too missed the initial announcement. If not participating there is a significant dilution and for that reason if no other I might well have applied for new shares. Not that I would necessarily have got them of course.

Dod

I've just seen the Primary Bid offer on Investegate. It was announced at 5:12pm yesterday
https://www.investegate.co.uk/announcem ... id/8059312

and the RNS about the placing was at 4:59pm
https://www.investegate.co.uk/announcem ... es/8059283

That doesn't exactly give anyone much time to do anything about it and is after hours for the market.

There are actually more details of the reasoning behind the placing in this RNS. But early evening/late afternoon is a bit of an odd time to release it. I didn't see it as I tend to stop looking for RNSs by early afternoon unless I am expecting something that hasn't turned up.

[G3lc]

I also missed the announcement, so my topping up price is under 8.20, giving so little notice seems a bit like sharp practice, changes my view on the ethics of the company. But then what would they, or anyone else care.

[Dod101]

I also missed the announcement, so my topping up price is under 8.20, giving so little notice seems a bit like sharp practice, changes my view on the ethics of the company. But then what would they, or anyone else care.

I wonder what happened. These placing are much easier for the company but I guess many shareholders would prefer the old rights issues. I might email the Co Secretary and complain about the timing.

Dod

[daveh]

If I was being generous I would say SEGRO didn't need to involve the retail market at all and it was good of them to bother with the primary bid offer, as the placing was well over subscribed. In that situation it is probably easier (and cheaper) for the company not to bother with retail investors. But the timing (late afternoon) of the RNSs and the lack of time to actually apply (less than 24 hrs) does seem a bit of a stitch up between the company and the large shareholders.

Looks like you could buy in the market today for about the same or slightly less than the placing price.

[Alaric]

But the timing (late afternoon) of the RNSs and the lack of time to actually apply (less than 24 hrs) does seem a bit of a stitch up between the company and the large shareholders.

That looks to have been the idea. There was an email from ii saying that the offer was taking place and that it would appear under corporate actions against SEGRO. If it wasn't there, it would have because it had been over-subscribed. Checking within a few minutes of receiving the email, it had already gone.