Circle Property PLC lifts interim dividend as it remains upbeat on
“The majority of our tenants remain firmly of the view that the office plays a central part in the running of their respective businesses,” the company said
Circle Property PLC (AIM:CRC) said it is optimistic that the recovery in the regional office market is “heading in the right direction” and raised its interim dividend to 3.5p per share from 2.5p last year and from 3.3p in pre-pandemic 2019.
The company reported a net asset value per share of £2.74 for the first six months to 30 September 2021, unchanged from the full year to March 2021 and down from £2.83 in the first half of the previous year, including the full impact of disposals in the period.
Commenting on the results, chief executive John Arnold said: “Our regional office portfolio has performed resiliently in the period. As increasing numbers of workers have returned to their offices, the importance of having an environment to meet, collaborate, mentor and train employees is clear. Whilst working patterns have changed, the office continues to play an integral role for many businesses.”
“Whilst the letting market is recovering more slowly, we believe that the flexibility offered by our assets and their inherently smaller floorplates (1,000-5,000 sq.ft) will be key in converting enquiries into lettings. The board remain committed to maximising returns and delivering value to our shareholders.”
The company reported pre-tax profits of £1.3mln for the first half compared with a loss of £0.7mln.
Rental income fell to £3.2mln from £3.9mln due to disposals. Rent collection for the March, June and September quarters was 93%, 91% and 80% respectively, and discussions continue around outstanding rental arrears, Circle said.
The company said 84.02% of its portfolio is let and generating incoming.
“The majority of our tenants remain firmly of the view that the office plays a central part in the running of their respective businesses,” it said.
In August, Circle exchanged contracts for the sale of One Castle Park, Bristol to Boultbee Brooks for £20mln, representing a 3.9% increase on the 31 March 2021 valuation of £19.25mln, and in September, it sold 135 Aztec West in Bristol to Assura Aspire for £3.961mln, well above the March 2021 valuation of £1.55mln.
READ: Circle Property sells Bristol property for 62% book-value gain
Circle is aiming to reduce gearing through targeted asset sales. The group had a cash balance of £8.6mln at the end of September, reflecting a net loan-to-value (LTV) of 40%. It repaid a £1.98mln of debt in October and expects to reduce its LTV further following the completion of the disposal of One Castle Park.
Shares rose 1.46% to 209.00p in early trade.
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