Workspace Group's full year NAV and profits beat forecast, strong demand continues
Final results from flexible office provider Workspace Group beat forecasts for profit and net asset value thanks to strong demand in London, rental growth and redevelopments.
FTSE 250
20,389.39
14:45 07/05/24
FTSE 350
4,576.24
14:45 07/05/24
FTSE All-Share
4,528.46
14:45 07/05/24
Real Estate Investment Trusts
2,354.49
14:45 07/05/24
Workspace Group
533.00p
14:39 07/05/24
After an extremely active year for the company in which it acquired five properties - with a new small purchase announced alongside results - and redeveloped and refurbished seven more, net asset value grew 42% to 703p per share.
NAV appreciation was driven by an overall valuation uplift of 30% or £328m, helping beat consensus forecasts of nearer 670p.
Overall occupancy was 88.7% at 31 March, with the total rent roll having increased over the year by 19% to £69.4m and net rental income up 14% to £54.4m.
Profit before tax rose by a similar 43% to £360m, with adjusted trading profit after interest up 30% to £26.6m, beating consensus of £25.2m.
This fed through to adjusted underlying earnings per share being lifted 24% to 17.2p, with directors hiking the final dividend 15% to 8.15p, meaning the total dividend is up 13% to 12.04p per share.
Chief executive Jamie Hopkins said demand for the company's office space remains strong, with current enquiry levels and lettings up year on year.
"This, coupled with the continued acceleration of our redevelopment and refurbishment plans and extensive portfolio management efforts, has translated into high rental and capital value growth, unlocking further value for our shareholders."
The FTSE 250 group continues to seek further acquisition opportunities across London, and announced the purchase of Angel House in Islington, "an attractive Art-Deco building" with a 3.7% initial yield but low rents of £29 per sq ft.
There is also a pipeline of 14 properties at varying stages of refurbishment and redevelopment, ranging from those at the planning stage to those where customers are being vacated. Refurbishments are expected to add £9.4m to the group rent roll by the time they are all completed, with redevelopments to add £3.1m.
For the new financial year, broker Peel Hunt forecasts adjusted NAV up 3% to 870p "for now", up from its previous 841p estimate, to give +5.8% prospective premium.