REG - Picton Property Inc. - Half Year Results
12/11/2025 07:00
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RNS Number : 1393H Picton Property Income Limited 12 November 2025
12 November 2025
PICTON PROPERTY INCOME LIMITED
('Picton', the 'Company' or the 'Group')
Half Year Results
Picton announces its half year results for the period to 30 September 2025.
Commenting on the results, Michael Morris, Chief Executive of Picton, said:
"These are positive results delivering an improved total return relative to
this time last year. Alongside our share buyback programme we have continued
to make progress recycling capital from lower yielding assets to further
support earnings growth. Our focus remains on creating shareholder value,
reflected by our total shareholder return in excess of 12% over the period.
Recent asset management activity and our pipeline of leasing progress across
all sectors is already starting to unlock our £10 million of reversion,
relative to contracted rents. This is underpinned by our weighting to the
industrial sector, where we continue to reset rents to higher levels, as well
as the upgrading of our office portfolio to support occupier retention and ERV
growth."
Improved profits with positive total return
• Profit after tax of £15.1 million, or 2.9p per share (September 2024: £11.5
million or 2.1p per share)
• EPRA earnings of £10.5 million, or 2.0p per share (September 2024: £11.2
million or 2.1p per share)
• Net assets of £527.6 million, or 102p per share (March 2025: 100p per share)
• EPRA net disposal value of £550.6 million, or 106p per share (March 2025:
105p per share)
• Total return of 3.4% (September 2024: 2.2%)
• Dividends paid of £10.0 million (1.9p per share) with dividend cover of 106%
supporting the 2.7% dividend increase, effective May 2025
Ongoing focus on shareholder value
• £12.5 million share buyback programme announced in September 2025, taking
total buyback allocation to £30 million since January 2025
• 13.6 million shares purchased in the period at an average price of 77p per
share, 25% below the September NAV of 102p per share
• Total shareholder return of 12.1% (September 2024: 17.4%)
Proactive management of the portfolio delivering capital and rental growth
• Total property return of 3.2%, outperforming the MSCI UK Quarterly Property
Index of 2.7%
• Like-for-like portfolio valuation increase of 0.8%, or 0.6% after net capital
expenditure
• Like-for-like increase in estimated rental value ('ERV') of 3.7%, with growth
across all sectors driven by industrial assets
• More than 50 asset management transactions securing £6.1 million of
contracted rent, 2.8% ahead of the March 2025 ERV
• Income upside potential of £10 million as at 30 September 2025: £5.3 million
through re-leasing vacant space and £4.7 million from resetting rents to
market levels at lease events
Continued portfolio repositioning to reduce low yielding office exposure
• Portfolio weighted towards industrial sector 68%, office 20% and retail and
leisure 12%
• Disposal of largest office asset for £34.5 million at a 1% premium to March
2025 valuation
• Portfolio occupancy of 90%, with two thirds of the vacant space identified for
or under refurbishment
Upgraded portfolio to improve environmental performance, occupancy and value
• £4.0 million invested into upgrading projects principally across eight
assets
• Completion of decarbonisation projects at Milton Keynes and Chatham office
assets, with work underway at Bristol and Manchester
• Continued focus on improving EPC ratings, with 86% now rated A-C (improved
from 83% in March 2025)
Conservative LTV and long-term fixed rate debt
• Loan to value ratio ('LTV') of 22% (March 2025: 24%)
• Total borrowings of £209 million, with 100% at fixed rates and a weighted
average interest rate of 3.7%
• £50 million undrawn revolving credit facility
• Weighted average debt maturity of 6.2 years
Positive activity post period end
• Share buybacks of £2.4 million since period end at a 22% discount to
September NAV
• Transactions completed at industrial and office assets in Gloucester, Glasgow,
Harlow and Radlett including:
- Lettings totalling £0.9 million per annum, 5% ahead of March 2025 ERV
- Lease renewals totalling £0.3 million per annum, 47% ahead of the previous
rent and 11% ahead of the March 2025 ERV
• Terms agreed for £0.7 million per annum of lettings across all sectors,
subject to contract
• £3.6 million received from two occupiers vacating industrial assets,
comprising £2.3 million of dilapidations and £1.3 million of additional
income. These represent the two largest reversionary opportunities within the
portfolio with an estimated rental value more than 40% above the previous
passing rent.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE UK
MARKET ABUSE REGULATION
For further information:
Picton
Kathy Thompson, Company Secretary
020 7011 9988, kathy.thompson@picton.co.uk
Tavistock
James Verstringhe
020 7920 3150, james.verstringhe@tavistock.co.uk
(mailto:james.verstringhe@tavistock.co.uk)
About Picton
Established in 2005, Picton is listed on the main market of the London Stock
Exchange and is a constituent of a number of EPRA indices including the FTSE
EPRA Nareit Global Index.
Picton owns and actively manages a £695 million UK commercial property
portfolio, invested across 46 assets and with around 300 occupiers (as at 30
September 2025).
Through an occupier focused, opportunity led approach, Picton aims to be the
consistently best performing diversified UK REIT and has delivered upper
quartile outperformance and a consistently higher income return than the MSCI
UK Quarterly Property Index since launch.
With a portfolio strategically positioned to capture income and capital
growth, currently weighted towards the industrial sector, Picton's agile
business model provides flexibility to adapt to evolving market trends over
the long-term.
Picton has a responsible approach to business and is committed to being net
zero carbon by 2040.
For more information please visit: www.picton.co.uk (http://www.picton.co.uk)
LEI: 213800RYE59K9CKR4497
Property portfolio and performance
30 Sept 2025 31 March 2025
Property valuation £695m £723m
Number of properties 46 47
Net initial yield 5.2% 5.2%
Reversionary yield 7.2% 6.8%
Occupancy 90% 94%
Passing rent £40.1m £42.3m
Passing rent - LfL* £40.1m £41.0m
Contracted rent £45.7m £48.2m
Contracted rent - LfL* £45.7m £46.9m
ERV £55.7m £55.6m
ERV - LfL* £55.7m £53.7m
Property total return** 3.2% 7.3%
MSCI UK Quarterly Property Index benchmark total return** 2.7% 6.3%
* LfL denotes a like-for-like basis excluding the disposal in the period
** Six months to September 2025 and 12 months to March 2025
Financial overview
Balance sheet 30 Sept 2025 31 March 2025
Net asset value ('NAV') £528m £533m
EPRA net tangible assets ('NTA') per share 102p 100p
EPRA net disposal value ('NDV') per share 106p 105p
Borrowings £209m £210m
Loan to value ratio ('LTV') 22% 24%
Six months to Six months to
Income statement 30 Sept 2025 30 Sept 2024
Profit after tax £15.1m £11.5m
EPRA earnings £10.5m £11.2m
Earnings per share 2.9p 2.1p
EPRA earnings per share 2.0p 2.1p
Company returns and performance
Six months to Six months to
30 Sept 2025 30 Sept 2024
Total return 3.4% 2.2%
Total shareholder return 12.1% 17.4%
Total dividend per share 1.9p 1.85p
Dividend cover 106% 111%
BUSINESS OVERVIEW
We have delivered positive financial results, announcing today a total return
of 3.4% and total shareholder return of 12.1% over the six months to 30
September 2025. This was set against a backdrop of a resilient UK commercial
property market, showing small but positive capital and rental growth, despite
weak business confidence more generally.
Earlier this year we set out our priorities for the year ahead to create value
for shareholders, including repositioning the portfolio to improve the income
profile, continued investment to upgrade the portfolio, prudent use of debt
and use of our share buyback programme. I am pleased to report progress across
these key areas.
We have a well-structured portfolio and strong balance sheet. Our property
portfolio has £10.0 million reversionary upside with the largest element
coming from our industrial assets and improving occupancy in our office
portfolio.
We continue to evolve the portfolio and are looking to improve the income
profile to support earnings growth. This should help maintain our long-term
upper quartile outperformance against the MSCI UK Quarterly Property Index,
demonstrating the value of our diversified approach and focus on income and
total return.
Financial performance
We have delivered a total profit after tax of £15.1 million, which compares
with £11.5 million during the first half of last year.
Our EPRA earnings were £10.5 million, reflecting EPRA earnings per share of
2.0p, which, although 2% lower than September 2024, principally reflects the
timing of lease events across the portfolio and lower occupancy relative to 31
March 2025.
During the period, we increased our dividend by 2.7%, effective May 2025 and
we delivered dividend cover of 106%.
This is further detailed in the Financial Review section.
Positive portfolio valuation and ERV growth
During the period, in accordance with the RICS valuation guidelines on the
rotation of valuers, we appointed a new independent valuer; Knight Frank LLP,
who confirmed the property portfolio valuation was £695 million as at 30
September 2025.
The UK commercial property market has shown small, but nevertheless positive,
capital value growth and our own portfolio has mirrored that with growth of
0.8% on a like-for-like basis, driven primarily by gains in the industrial and
retail warehouse assets, or 0.6% after capital expenditure. ERV growth was
3.7%, driven by industrial assets, which will underpin future reversion.
During the period we sold our largest and lowest yielding, fully occupied
office asset and we restructured a hotel lease, with seven years remaining, to
a new 99-year lease in return for a payment of £2.4 million. These
transactions were ahead of the March 2025 valuation but reduced the overall
portfolio valuation on an absolute basis.
Further reduction in office exposure
The portfolio is weighted 68% to the industrial, warehouse and logistics
sector. We continue to reduce our office exposure, now standing at 20%,
following the disposal of our largest office asset for £34.5 million. Our
retail and leisure exposure, which is predominantly in retail warehouse
assets, remains unchanged at 12%.
Asset management activity
This is detailed within the Portfolio Review section, but in summary we
completed more than 50 asset management transactions, securing £6.1 million
of contracted rent, 2.8% above the March 2025 ERV.
These helped to drive rental value growth across the portfolio with lettings,
lease renewals and rent review transactions achieving above independent rental
value estimates.
We took the opportunity to surrender some leases early, ahead of known
expiries, where we have received payment to take back space and better manage
the reletting process. We have received £1.6 million, including £0.5 million
in respect of dilapidations for leases with an annual contracted rent and ERV
of £1.4 million per annum.
In light of the above, our occupancy reduced during the period and as at 30
September 2025 was 90%. More than two thirds of the vacant space is either
under refurbishment or due to be refurbished, with nearly 50% of the space
becoming available in the last six months. Of the vacant space, 81% is in the
office sector, with 12% in industrial and 7% in retail and leisure.
Capital structure
Our balance sheet remains strong with an LTV of 22% and with proceeds from a
recent disposal available for reinvestment. We have a highly attractive debt
position with all our drawn debt fixed at below market rates and with a
weighted maturity of more than six years. Additionally, we have a £50 million
undrawn revolving credit facility.
The value of our debt is reflected in our EPRA NDV being 106p per share, which
is £23 million higher than our reported net assets.
Our repurchase of shares at a meaningful discount to net asset value has
reduced overall net assets but enhanced our NAV per share as detailed below.
Sustainable thinking
During the six-month period we have continued to make good progress towards
our sustainability goals, with a focus on enhancing the environmental
performance of our portfolio. Our long-standing approach has been to use lease
events as an opportunity to invest in practical, energy efficient upgrades and
on-site renewable solutions, while reducing our reliance on carbon-intensive
fuels such as gas.
Our priority is to reduce Scope 1 emissions across the portfolio, with
recently completed projects at office assets in Chatham and Milton Keynes
delivering on these objectives.
During the period, our EPC ratings improved from 83% to 86% A-C by ERV.
We are also pleased to have improved our GRESB score, which increased to 82
points (2024: 81 points). In addition, we have maintained our EPRA Gold award
for our 2025 Annual Report and our sustainability reporting.
Equity capital markets
The listed real estate sector continues to trade at a meaningful discount to
net asset value and the arbitrage that this presents is self-evident in the
number of merger and take-private transactions announced this year.
We have taken advantage of this market dislocation and during the period we
bought back and cancelled £10.5 million of shares, at a 25% discount to their
net asset value as at September 2025.
Following the most recent office disposal in September, we announced a further
£12.5 million continuation of the share buyback programme.
The team continues to be fully aligned with the interests of shareholders
through our employee share schemes and during the period the Employee Benefit
Trust acquired 1.2 million shares to hedge against outstanding awards.
Outlook
We are encouraged by the leasing potential we have across all three sectors
within our portfolio. As at 30 September 2025 there was reversionary potential
of £10.0 million above the contracted rent, of which £5.3 million relates to
vacant space and £4.7 million relates to resetting rents to market levels at
lease events.
We are looking to redeploy some of the proceeds from our recent office
disposal into higher yielding opportunities to improve EPRA earnings. We
believe we can secure assets, significantly below their cost of construction
and with attractive income and capital growth characteristics. We have
identified a potential opportunity and are currently undertaking due
diligence.
The recently announced break option exercised at our logistics asset in
Rushden will provide the largest single opportunity to improve the income
profile of our portfolio, with the ERV around 50% higher than the previous
passing rent of £1.6 million. While there may be some disruption to EPRA EPS
growth, depending on how quickly this can be re-leased, the break penalty will
mitigate any short-term loss of income and the dilapidations receipt will
enable us to upgrade the building.
While we remain committed to focusing on the things we can control, some
factors are more widely felt. All eyes are on the UK Budget, due later this
month, which feels to have overshadowed much of the year. A pro-business
agenda is now what is needed. Against this backdrop, the Board and management
are continuing to explore ways to continue to create further value for
shareholders.
MARKET OVERVIEW
Economic backdrop
Global markets have been shaped by heightened geopolitical tensions, including
conflicts in the Middle East and Europe and the introduction of new US trade
tariffs. Domestically, the UK's November 2024 Budget introduced higher taxes
which dampened business sentiment, a trend which continues to influence
business and consumer confidence ahead of this month's Autumn Budget.
Despite this backdrop, the International Monetary Fund has recently upwardly
revised its UK economic growth forecasts, signalling a more resilient outlook,
particularly relative to other G7 economies.
UK CPI Inflation for the year to September 2025 was in line with August at
3.8%, which was lower than expected and prompted a decline in gilt yields; the
ten-year yield now stands at around 4.5%, which is in line with the long-term
average.
While the September inflation data does suggest a modest easing of price
pressures, inflation remains persistently above target, contributing to the
Bank of England's cautious monetary policy stance. The Monetary Policy
Committee has lowered the base rate from a 2024 peak of 5.25% to 4.0% as at
November 2025.
Labour market indicators show employment, job vacancies and wage growth all
easing. The unemployment rate rose to 5.0% in September, which is above
pre-pandemic levels. Adjusted for inflation, average weekly earnings growth
was 0.8% for regular pay and 1.0% for total pay between July and September
2025.
Consumer behaviour reflects this uncertain environment. Persistent inflation
and the prospect of increased taxes have weighed on discretionary spending,
leading to subdued retail sales growth. The British Retail Consortium reported
a 1.5% year-on-year increase in retail sales for October, the weakest since
May 2025. Meanwhile, the household savings ratio continues on an upward trend,
indicating a more conservative approach to spending.
Looking ahead, the recent upgrade to GDP growth forecasts and September's
inflation figures offer grounds for cautious optimism. However, momentum will
hinge on several factors; this month's Budget and policy announcements,
progress towards the inflation target, which would ease pressure on real
incomes and business costs, and the pace of interest rate cuts.
UK property market
The MSCI UK Monthly Property Index showed a total return for All Property for
the six months to September 2025 of 3.4%, with an income return of 2.7% and
capital growth of 0.7%. This compares with capital growth of 1.7% for the six
months to March 2025. The MSCI All Property net initial yield edged lower to
4.9% in September 2025, from 5.0% in March 2025.
As detailed below, positive capital growth was recorded primarily in
industrial and retail sub-sectors for the six months to September 2025.
Encouragingly, positive rental growth was recorded in most sub-sectors for the
six months to September 2025. All Property rental value growth was 1.6% for
the period, compared with 1.8% for the six months to March 2025.
Occupancy at an All Property level remained flat over the six months, with the
MSCI UK Monthly Property Index recording an occupancy rate of 88% for
September 2025.
The market performance for the six months to September 2025 for All Property
and the three main sectors is shown below.
Six months to September 2025 All Property Industrial Office Retail
Total return 3.4% 3.8% 1.2% 4.3%
Income return 2.7% 2.3% 2.5% 3.4%
Capital growth 0.7% 1.5% -1.3% 0.9%
Number of positive sub-sectors 20 7 3 10
Number of negative sub-sectors 12 0 7 5
ERV growth 1.6% 1.9% 1.3% 1.4%
Number of positive sub-sectors 29 7 9 13
Number of negative sub-sectors 3 0 1 2
Source: MSCI UK Monthly Property Index
PORTFOLIO REVIEW
Valuation
During the period, in accordance with the RICS valuation guidelines on the
rotation of valuers, we appointed Knight Frank LLP as our external valuer,
effective June 2025. The like-for-like independent property valuation
increased by £5.6 million to £694.8 million. The property portfolio has a
net initial yield of 5.2% and a reversionary yield of 7.2%.
All sectors experienced positive like-for-like valuation movements, driven by
the industrial sector. The valuations of the retail and office sectors were
impacted by a lease restructure at a hotel in Carlisle for which a payment of
£2.4 million was received, and an occupier vacating in Chatham for which a
payment of £1.2 million was received.
Our largest office asset, Stanford Building, London WC2, was sold in September
for £34.5 million, at a 1% premium to the March 2025 external valuation.
The portfolio investment programme continued over the period, with £4.0
million invested to upgrade assets, in particular at our Milton Keynes office
property, which is now fully decarbonised with an A-rated EPC, and at a
Gloucester industrial asset facilitating a lease extension to 2037.
The breakdown of valuation movements over the six months is shown below:
Sector Portfolio LfL* Capital expenditure Capital LfL*
allocation valuation change receipt post capex /
capital receipt
-£1.3m
Industrial 68% 1.1% - 0.8%
South East 48%
Rest of UK 20%
Office 20% 0.3% -£2.7m - -1.6%
London & South East 11%
Rest of UK 9%
Retail and Leisure 12% 0.1% - £2.4m 2.9%
Retail Warehouse 8%
High Street - Rest of UK 2%
Leisure 2%
-£4.0m
Total 100% 0.8% £2.4m 0.6%
* LfL denotes a like-for-like basis excluding the disposal in the period
Portfolio summary
Our portfolio is concentrated in the industrial, warehouse and logistics
sector and has £10.0 million of reversionary upside from the contracted rent.
This comprises £5.3 million of current vacant space and £4.7 million which
will be captured by resetting rents to market levels at lease events.
90% of the upside from resetting rents to market level comes from the
industrial portfolio, where we continue to capture rental growth through new
lettings, renewals and rent reviews. 81% of the vacant space is in the office
portfolio, which we have been upgrading to meet occupier requirements and are
seeing increased demand.
Portfolio snapshot
30 Sept 25 31 Mar 25 Like-for-like* % change
Assets 46 47
Occupancy 90% 94%
Valuation £695m £723m 0.8%
Disposal proceeds £34.5m £51.0m
Acquisition £0m £0.5m
Capital expenditure £4.0m £11.8m
Equivalent yield 6.8% 6.8%
Passing rent £40.1m £42.3m -2.1%
Contracted rent £45.7m £48.2m -2.5%
ERV £55.7m £55.6m 3.7%
* LfL denotes a like-for-like basis excluding the disposal in the period
The contracted annual rent of the portfolio as at 30 September 2025 was £45.7
million and the portfolio's ERV was £55.7 million, a like-for-like increase
of 3.7%, with all three sectors showing positive ERV growth as follows:
- Industrial: 5.1%
- Office: 2.6%
- Retail and Leisure: 0.7%
Rent collection remained strong with 98% received over the six months.
Performance
We delivered a total property return of 3.2%, outperforming the MSCI UK
Quarterly Property Index which recorded a total return of 2.7%. This
outperformance was driven by both income return and capital growth.
Our portfolio income return was 2.6%, outperforming MSCI's income return of
2.3%. Capital growth was 0.6%, compared to MSCI at 0.4%.
Portfolio activity
We continue to actively manage the portfolio, completing more than 50 asset
management transactions over the period, 2.8% ahead of March 2025 ERV. This
included:
- 15 lettings or agreements to lease, securing additional rent of £1.5 million,
3% ahead of the March 2025 ERV
- 21 lease renewals or regears, securing £3.2 million per annum, an uplift of
£0.1 million, 4% ahead of the previous rent and 2% ahead of the March 2025
ERV
- Ten rent reviews, securing an uplift of £0.2 million per annum, 18% ahead of
the previous rent and 5% ahead of the March 2025 ERV
- Three lease variations to remove occupier break options, securing £0.2
million per annum, 11% ahead of the March 2025 ERV
- Seven lease surrenders, one of which was back-to-back with the occupier; three
have already been re-let with one under offer, and three are being refurbished
prior to re-leasing
Occupancy
Occupancy has decreased to 90% (31 March 2025: 94%), which compares to the
MSCI UK Monthly Property Index of 88%, as at 30 September 2025. The space that
became available over the period represents nearly 50% of the total vacancy
and has an ERV of £2.5 million per annum, this includes:
- Space returned at offices in Farringdon on a lease break and in Bristol, where
an occupier has moved to a larger suite
- An office lease surrendered at Chatham with a passing rent of £0.9 million in
exchange for a payment of £1.2 million
- An industrial lease surrendered at Datapoint, London E16 with a passing rent
of £0.1 million per annum in exchange for a payment of £0.3 million
- An industrial unit in Winnersh, where the ERV is £0.2 million, more than 60%
ahead of the previous passing rent
The total ERV of vacant space is £5.3 million. The majority of our void is in
the office sector, with an ERV of £4.3 million or 81% of the total vacant
space. Offices have an occupancy rate of 75%, and the industrial and retail
assets have occupancy rates of 98% and 95% respectively.
Industrial
We continue to operate with good occupancy and are capturing rental growth
within the industrial portfolio. Where space is being returned, we are
achieving higher rents on re-leasing and we expect this to continue, although
certain key lease events will impact occupancy in the short-term.
As at 30 September 2025 our industrial portfolio had reversionary income
potential of £4.3 million, with a further £0.6 million of upside from
leasing vacant space.
Industrial snapshot
30 Sept 25 31 Mar 25 Like-for-like % change
Assets 19 19
Occupancy 98% 99%
Valuation £468.3m £463.2m 1.1%
Acquisition - £0.5m
Capital expenditure £1.3m £3.0m
Equivalent yield 5.8% 5.6 %
Passing rent £23.5m £22.6m 3.9%
Contracted rent £26.0m £25.7m 1.6%
ERV £30.9m £29.5m 5.1%
Our industrial assets increased in value by £5.1 million, or 1.1%, with 28
asset management transactions completed at 7.9% ahead of the March 2025 ERV.
These included:
- Ten lettings and agreements for lease securing £0.8 million per annum, 9%
ahead of March 2025 ERV
- 11 renewals and regears securing £1.8 million per annum, 29% ahead of the
previous rent and 7% ahead of March 2025 ERV
- Five rent reviews securing an uplift of £0.1 million per annum, 32% ahead the
previous rent and 9% ahead of March 2025 ERV
- Two break removals securing £0.1 million per annum, 8% ahead of the March
2025 ERV
Key leasing events during the period included:
- Harlow: we restructured the lease with the largest occupier for a ten-year
extension at £1.0 million per annum, an increase of 25% on the previous
passing rent with flexibility, subject to break penalty payments
- Radlett: we leased the only vacant unit at £0.2 million per annum, 14% ahead
of the March 2025 ERV, renewed a lease at £0.3 million per annum, 64% ahead
of the previous rent and settled two rent reviews for a combined £0.2 million
per annum, 39% ahead of the previous rent
- London, Datapoint: we let a unit to an existing data centre occupier at £0.2
million per annum, 40% ahead of the previous rent. We also completed an active
management surrender, receiving a payment of £0.2 million, and this unit is
now being refurbished ahead of re-leasing
Office
Office occupancy continues to be lower than other sectors, which is in part
due to the timing of lease events and proactive surrenders, but also a slower
leasing market, recognising wider macroeconomic factors.
Our office portfolio has vacant space with an ERV of £4.3 million and
reversionary income potential of £0.7 million from resetting rents to market
levels at lease events.
Office snapshot:
30 Sept 25 31 Mar 25 Like-for-like* % change
Assets 13 14
Occupancy 75% 86%
Valuation £141.8m £175.3m 0.3%
Disposal proceeds £34.5m £51.0m
Capital expenditure £2.7m £8.1m
Equivalent yield 9.1% 8.2%
Passing rent £11.4m £14.0m -10.7%
Contracted rent £12.3m £14.9m -9.6%
ERV £17.3m £18.7m 2.6%
* LfL denotes a like-for-like basis excluding the disposal in the period
Our office assets increased in value by £0.4 million or 0.3% on a
like-for-like basis with 11 asset management transactions completed securing
£2.1 million per annum of income. These included:
- Three lettings or agreements for lease securing £0.6 million per annum, 8%
below March 2025 ERV
- Five lease renewals and regears securing £1.0 million per annum, 7% ahead of
the previous rent and 5% below March 2025 ERV
- Three rent reviews at £0.6 million per annum securing an uplift of £0.1
million per annum, 12% ahead of the previous rent and 1% ahead the March 2025
ERV
Our largest office asset, Stanford Building, London WC2, was sold during the
period for £34.5 million, a 1% premium to the March 2025 valuation.
At 50 Farringdon Road, London EC1 we secured approval via permitted
development rights to create an additional floor of residential accommodation
above the existing offices.
Key leasing events during the period included:
- Bristol: we completed the letting of two fully-fitted suites at a record
rental level for the building, securing £0.3 million per annum, in line with
the March 2025 ERV, and retained an existing occupier at £0.2 million per
annum, 21% below March 2025 ERV but with no capital expenditure or rental
incentive
- Milton Keynes: we completed a lease renewal at £0.4 million per annum, 12%
ahead of the previous rent and retained another occupier at £0.1 million per
annum with a rent review due in 2026. The building M&E replacement works
have been completed and the asset has an EPC A rating; refurbishment works are
underway in two suites with good occupier interest
Retail and Leisure
We are operating with high occupancy and starting to experience rental growth
in the retail portfolio. However, income growth is still limited as new leases
are reset from historically higher rental levels, but our retail portfolio now
has a higher ERV than the contracted rent for the first time in a number of
years.
The retail and leisure portfolio has reversionary potential of £0.2 million,
with the vacant space of £0.4 million offset by £0.2 million of rents higher
than ERV. This reflects the recent resetting of rents back to market levels
and the removal of over-renting from some assets.
Retail and leisure snapshot:
30 Sept 25 31 Mar 25 Like-for-like % change
Assets 14 14
Occupancy 95% 94%
Valuation £84.7m £84.6m 0.1%
Capital expenditure - £0.7m
Capital premium received £2.4m -
Equivalent yield 7.9% 7.9%
Passing rent £5.3m £5.7m -7.1%
Contracted rent £7.3m £7.6m -3.8%
ERV £7.5m £7.4m 0.7%
Our retail and leisure assets increased in value by £0.1 million or 0.1%,
with ten active management transactions completed securing £0.7 million of
income, 3.7% ahead of the March 2025 ERV. These included:
- Two lettings securing £0.2 million per annum, 20% ahead of the March 2025 ERV
- Five renewals and regears securing £0.4 million per annum, 5% below the March
2025 ERV
- Two rent reviews at £0.1 million per annum, 6% ahead of the March 2025 ERV
- One break removal securing £0.1 million, 23% ahead of the March 2025 ERV
At Carlisle, we restructured a hotel lease expiring in 2031, on to a new
99-year lease, receiving a premium of £2.4 million in lieu of a rent
reduction and longer lease. We simultaneously let a small vacant retail unit
to the hotel operator as part of the overall transaction.
Key leasing events during the period included:
- Leeds: we completed the surrender of a lease in exchange for a surrender
payment and, simultaneously re-let the unit at £0.1 million per annum, 64%
ahead of the previous rent and 27% ahead of the March 2025 ERV
- Preston: we let the sole vacant unit following a short void period and with no
capital expenditure, at £0.1 million per annum, 7% ahead of the March 2025
ERV
- Bristol: we completed a lease renewal at £0.2 million per annum, which was in
line with the March 2025 ERV but 46% below the previous rent, which was set in
2009
Post period end activity
Transactions were completed at an industrial property in Gloucester, an office
in Glasgow and industrial properties in Harlow and Radlett.
- Lettings totalling £0.9 million per annum, 5% ahead of March 2025 ERV
- Lease renewals totalling £0.3 million per annum, 47% ahead of the previous
rent and 11% ahead of the March 2025 ERV
We have a pipeline of agreed lettings subject to contract, which will generate
£0.7 million per annum of rental income, including offices in Colchester and
St Albans, industrial in Luton and retail in Bristol.
Key ongoing initiatives which will unlock significant reversion include:
- Rushden: the occupier at our Rushden asset exercised a break option effective
October 2025. The asset represented the largest single reversionary
opportunity within the portfolio with an ERV more than 50% above the passing
rent. In accordance with the lease terms, a payment of £2.5 million was
received after the period end, comprising a £0.8 million break penalty and
£1.7 million in dilapidations. The break penalty received will mitigate any
short-term loss of income while the dilapidations will enable an upgrade of
the building. Marketing of the unit has already commenced, and we have had
some initial expressions of interest and viewings.
- Radlett: an occupier of a unit in Radlett vacated effective November 2025. We
received a payment of £1.1 million covering a surrender premium and agreed
dilapidations payment. The ERV is more than 20% above the previous passing
rent of £1.0 million per annum. We have also received a positive
pre-application response on a proposal to extend this unit.
Top ten assets
The top ten assets as at 30 September 2025, ranked by capital value, represent
58% of the total portfolio valuation as shown below:
Sector Approx. Appraised
area (sq ft)
value
1 Parkbury Industrial Estate, Radlett, Hertfordshire Industrial 337,900 >£100m
2 River Way Industrial Estate, Harlow, Essex Industrial 464,000 £50m-£100m
3 Datapoint, Cody Road, London E16 Industrial 55,100 £30m-£50m
4 Lyon Business Park, London IG11 Industrial 99,400 £30m-£50m
5 Shipton Way, Rushden, Northamptonshire Industrial 312,900 £20m-£30m
6 50 Farringdon Road, London EC1 Office 31,300 £20m-£30m
7 Sundon Business Park, Luton, Bedfordshire Industrial 127,800 £20m-£30m
8 Tower Wharf, Cheese Lane, Bristol Office 70,600 £20m-£30m
9 Trent Road, Grantham, Lincolnshire Industrial 336,100 £20m-£30m
10 The Business Centre, Wokingham, Berkshire Industrial 96,400 £20m-£30m
A full portfolio listing is available on our website: www.picton.co.uk
(http://www.picton.co.uk)
Top ten occupiers
The top ten occupiers, based as a percentage of annualised contracted rental
income, after lease incentives, as at 30 September 2025, are summarised below:
Occupier %
1 Public sector 4.3
2 Whistl UK Limited 3.6
3 The Random House Group Limited 3.6
4 B&Q Plc 3.0
5 Snorkel Europe Limited 2.6
6 XMA Limited 2.1
7 Orlight Limited 1.8
8 DHL Supply Chain Limited 1.7
9 Blanco UK Limited 1.7
10 4 Aces Limited 1.5
25.9
FINANCIAL REVIEW
Income statement
Overall trading performance for the six months improved with modest positive
valuation gains and a profit of £15.1 million, or 2.9p per share (September
2024: £11.5 million or 2.1p per share). EPRA earnings were £10.5 million, or
2.0p per share (September 2024: £11.2 million or 2.1p per share). EPRA
earnings has been affected by lower net property income and interest income,
which was in part offset, on a pence per share basis, by the share buyback
programme.
We experienced positive like-for-like valuation movements across all sectors,
with the industrial sector contributing the largest element. The unrealised
revaluation gains, net of capital expenditure and lease incentives, were £5.6
million.
We disposed of Stanford Building, London WC2, our largest office asset, for
gross proceeds of £34.5 million, 1% above the 31 March 2025 valuation. A loss
on disposal of £1m is recognised due to sales costs and lease incentives. On
completion of the sale, we simultaneously entered into a lease of the first
floor which is now classified as a right of use asset, rather than owner
occupied.
In addition, during the period we entered into a new 99-year lease with the
hotel occupier in Carlisle, receiving a premium of £2.4 million as part of
the transaction, in return for an extended lease term and rent reduction.
EPRA earnings were affected by lease events and reduced occupancy,
predominantly in the office sector. These events are expected to impact in the
short-term while being a key step to unlock reversion and income growth in the
medium term. Net property income was £18.0 million (September 2024: £18.4
million) due to:
- Rental income decreased by £1.4 million due to a number of factors: disposals
(£0.2 million), our Rushden occupier exercising its break option and the need
to unwind lease incentives (£0.6 million), lower office occupancy and the
retail and leisure assets reverting to market rents. Overall rental income,
excluding disposals and Rushden, reduced by £0.6 million or around 3%
- Other income was £1.1 million mainly attributable to the surrender premium
received at Chatham (£0.8 million). The surrender premium was equivalent to
around 12 months of the occupier's rental income and offsets the reduced
rental income
- Property operating costs increased by £0.3 million due to the occupier at
Rushden exercising its break effective October 2025. This resulted in an
one-off expense of £0.4 million as a result of a lease incentive being
written off
- Property void costs reduced due to disposals of vacant property in the
previous financial year
We remained focused on managing our cost base and sought to reduce costs
through a review of valuation, auditor and other professional fees.
Our net financing costs increased by £0.3 million compared to the prior
six-month period due to reduced interest income, as a result of lower interest
rates and back-dated interest received from our managing agents in the prior
period. Our interest expense is fixed, as 100% of the debt drawn is under our
long-term fixed rate facilities.
We increased the dividend effective May 2025 and maintained dividend cover at
106% over the period (September 2024: 111%).
Balance sheet
The Group's net asset value ('NAV') as at 30 September 2025 was £527.6
million or 102p per share, reflecting a 2% increase (March 2025: £533.4
million or 100p per share). While the NAV reduced due to the share buyback
programme, with a total of £10.5 million utilised during the six-month
period, the NAV on a pence per share basis increased by 2%. The total return
was 3.4% (September 2024: 2.2%).
The valuation of the investment portfolio increased by £5.6 million to
£694.8 million equivalent to 0.8% on a like-for-like basis, excluding
Stanford Building, London WC2, which was sold in the period. This equates to
0.6% including net capital expenditure, being £4 million of capital
expenditure incurred less the £2.4 million premium received on the lease
regear at the hotel in Carlisle. No assets were held for sale as at 30
September 2025.
Our balance sheet remains strong with £53.6 million of cash as at 30
September 2025. The increase of £18.3 million during the period was primarily
due to the disposal of Stanford Building, London WC2, (gross proceeds £34.5
million) less capital expenditure (£4.0 million) and share buybacks (£10.5
million). The remaining proceeds will be used for share buybacks, reinvestment
into the portfolio and for new opportunities to support value and earnings
growth.
Total borrowings reduced by £0.8 million in line with the quarterly
amortisation under the Aviva loan facility. The LTV as at September 2025 was
22% (March 2025: 24%) with the reduction due to the disposal proceeds. The
weighted average maturity of our borrowings is now 6.2 years and 100% of the
drawn debt is fixed at a weighted average interest rate of 3.7% (March 2025:
3.7%).
The long-term loan facilities with Canada Life and Aviva are in place until
2031 and 2032 respectively.
Our £50 million revolving credit facility remains committed but undrawn and
gives us operational flexibility and the potential for future investment
opportunity.
During the period a new occupational lease was entered into in respect of the
1(st) floor Stanford Building, London WC2. The lease is for a ten-year term,
with the option to break at the end of five years. The annual rent payable is
£299,100 with half rent payable over the first 12 months. This has been
recognised as a lease liability on the balance sheet at 30 September 2025.
EPRA net tangible assets were 102p per share, in line with the IFRS net asset
value. However, the EPRA net disposal value, which included the £23 million
fair value adjustment to our borrowings, was 106p per share.
Share buybacks continued over the period with a new £12.5 million programme
being put in place in September 2025 following the disposal of Stanford
Building, London WC2. We have committed to a total of £30 million in share
buybacks since commencement in January 2025 with £11.9 million outstanding as
at 30 September 2025. Over the six-month period 13,585,000 shares were
purchased and cancelled at an average price of 77 pence per share. This
equated to a 25% discount to the September 2025 NAV per share and was
accretive to both earnings and NAV growth.
The Employee Benefit Trust ('EBT') purchased 1,200,000 shares during the
period and holds 3,119,446 shares as at 30 September 2025. Shares are held by
the EBT to hedge awards outstanding employee share schemes.
DIRECTORS' RESPONSIBILITIES
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
The Company's assets comprise direct investments in UK commercial property.
Its principal risks are therefore related to the commercial property market in
general and its investment properties. Other risks faced by the Company
include economic, investment and strategic, regulatory, management and
control, operational, financial and climate related risks.
These risks, and the way in which they are managed, are described in more
detail under the heading 'Managing Risk' within the Strategic Report in the
Company's Annual Report for the year ended 31 March 2025. The Company's
principal risks and uncertainties have not changed materially since the date
of that report.
STATEMENT OF GOING CONCERN
The Directors have assessed whether the going concern basis remains
appropriate for the preparation of the financial statements for the period
ended 30 September 2025. In making their assessment the Directors have
considered the principal and emerging risks relating to the Group and
scenarios impacting the portfolio and the potential consequences on financial
performance, asset values, investing and financing activities. More details
regarding the Group's business activities, together with the factors affecting
performance, investment activities and future developments are set out in the
Portfolio Review.
Further information on the financial position of the Group, including its
liquidity position and debt facilities, is set out in the Financial Review and
in the condensed consolidated financial statements.
Under all of these scenarios the Group has sufficient cash resources to
continue its operations, and remain within its loan covenants, for a period of
at least 12 months from the date of these financial statements.
Based on their assessment and knowledge of the portfolio and market, the
Directors have therefore continued to adopt the going concern basis in
preparing the financial statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE INTERIM REPORT
We confirm that to the best of our knowledge:
a. the condensed set of consolidated financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting';
b. the Business Overview and Portfolio Review (together constituting the Interim
Management Report) together with the Statement of Principal Risks and
Uncertainties above include a fair review of the information required by the
Disclosure Guidance and Transparency Rules ('DTR') 4.2.7R, being an indication
of the important events that have occurred during the first six months of the
financial year, a description of principal risks and uncertainties for the
remaining six months of the year, and their impact on the condensed set of
consolidated financial statements; and
c. the Business Overview together with the condensed set of consolidated
financial statements include a fair review of the information required by DTR
4.2.8R, being related party transactions that have taken place in the first
six months of the current financial year and that have materially affected the
financial position or performance of the Company during that period, and any
changes in the related party transactions described in the last Annual Report
that could do so.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website, and for
the preparation and dissemination of financial statements. Legislation in
Guernsey governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
By Order of the Board
Saira Johnston
Director
11 November 2025
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2025
Note 6 months 6 months ended Year ended
ended 30 September 31 March
30 September 2024 2025
2025 unaudited audited
unaudited Total Total
Total £000 £000
£000
Income
Revenue from properties 3 25,514 26,883 54,019
Property expenses 4 (7,500) (8,467) (16,343)
Net property income 18,014 18,416 37,676
Expenses
Administrative expenses (3,400) (3,469) (7,100)
Total operating expenses (3,400) (3,469) (7,100)
Operating profit before movement on investments 14,614 14,947 30,576
Investments
Revaluation of owner-occupied property 10 - 88 128
Profit on disposal of property, plant & equipment 10 40 - -
(Loss)/profit on disposal of investment property 9 (997) (33) 1,496
Investment property valuation movements 9 5,556 253 12,859
Total profit on investments 4,599 308 14,483
Operating profit 19,213 15,255 45,059
Financing
Interest income 231 594 813
Interest expense (4,301) (4,338) (8,549)
Total finance costs (4,070) (3,744) (7,736)
Profit before tax 15,143 11,511 37,323
Tax - - -
Profit after tax 15,143 11,511 37,323
Total comprehensive income for the period/year 15,143 11,511 37,323
Earnings per share
Basic 7 2.9p 2.1p 6.9p
Diluted 7 2.9p 2.1p 6.8p
Notes 1 to 17 form part of these condensed consolidated financial statements.
All of the profit and total comprehensive income for the period is
attributable to the equity holders of the Company. There are no minority
interests.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2025
Note Share Retained Other Total
capital
earnings
£000
reserves £000
£000
£000
Balance as at 31 March 2024 164,400 360,528 (453) 524,475
Profit for the period - 11,511 - 11,511
Dividends paid 6 - (10,089) - (10,089)
Share-based awards - - 400 400
Purchase of shares held in trust - - (1,519) (1,519)
Balance as at 30 September 2024 164,400 361,950 (1,572) 524,778
Profit for the period - 25,812 - 25,812
Dividends paid 6 - (10,070) - (10,070)
Share-based awards - - 351 351
Purchase and cancellation of own shares 13 - (7,493) - (7,493)
Balance as at 31 March 2025 164,400 370,199 (1,221) 533,378
Profit for the period - 15,143 - 15,143
Dividends paid 6 - (9,975) - (9,975)
Share-based awards - - 405 405
Purchase of shares held in trust - - (920) (920)
Purchase and cancellation of own shares 13 - (10,462) - (10,462)
Balance as at 30 September 2025 164,400 364,905 (1,736) 527,569
Notes 1 to 17 form part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2025
Note 30 September 2025 30 September 31 March
unaudited 2024 2025
£000 unaudited audited
£000 £000
Non-current assets
Investment properties 9 676,300 679,004 700,694
Property, plant and equipment 10 1,234 3,519 3,504
Lease receivable 1,048 - -
Total non-current assets 678,582 682,523 704,198
Current assets
Investment properties held for sale 9 - 20,497 -
Accounts receivable 24,735 25,226 25,122
Cash and cash equivalents 53,586 28,223 35,320
Total current assets 78,321 73,946 60,442
Total assets 756,903 756,469 764,640
Current liabilities
Accounts payable and accruals (18,273) (19,865) (20,048)
Loans and borrowings 12 (1,314) (1,279) (1,388)
Obligations under leases 11 (196) (115) (115)
Total current liabilities (19,783) (21,259) (21,551)
Non-current liabilities
Loans and borrowings 12 (205,947) (207,867) (207,153)
Obligations under leases 11 (3,604) (2,565) (2,558)
Total non-current liabilities (209,551) (210,432) (209,711)
Total liabilities (229,334) (231,691) (231,262)
Net assets 527,569 524,778 533,378
Equity
Share capital 13 164,400 164,400 164,400
Retained earnings 364,905 361,950 370,199
Other reserves (1,736) (1,572) (1,221)
Total equity 527,569 524,778 533,378
Net asset value per share 15 102p 96p 100p
Notes 1 to 17 form part of these condensed consolidated financial statements.
These condensed consolidated financial statements were approved by the Board
of Directors on 11 November 2025 and signed on its behalf by:
Saira Johnston
Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2025
Note 6 months ended 6 months ended Year ended
30 September 2025 30 September 31 March
unaudited 2024 2025
£000 unaudited audited
£000 £000
Operating activities
Operating profit 19,213 15,255 45,059
Adjustments for non-cash items 14 (4,120) 160 (13,597)
Interest received 298 1,006 1,248
Interest paid (4,109) (4,432) (8,540)
Decrease in accounts receivables 319 963 1,044
Decrease in accounts payable and accruals (1,854) (516) (291)
Cash inflows from operating activities 9,747 12,436 24,923
Investing activities
Disposal of investment properties 9 29,515 28,967 50,031
Purchase of investment properties 9 - - (533)
Capital expenditure on investment properties 9 (3,959) (4,205) (11,794)
Lease premium received 2,350 - -
Disposal of property, plant & equipment 10 3,438 - -
Purchase of property, plant & equipment 10 (1) - (12)
Cash inflows from investing activities 31,343 24,762 37,692
Financing activities
Borrowings repaid (773) (17,140) (17,897)
Financing costs (662) - -
Purchase of shares held in trust (920) (1,519) (1,519)
Purchase and cancellation of own shares (10,462) - (7,493)
Dividends paid 6 (9,975) (10,089) (20,159)
Lease liability (32) - -
Cash outflows from financing activities (22,824) (28,748) (47,068)
Net increase in cash and cash equivalents 18,266 8,450 15,547
Cash and cash equivalents at beginning of period/year 35,320 19,773 19,773
Cash and cash equivalents at end of period/year 53,586 28,223 35,320
Notes 1 to 17 form part of these condensed consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2025
1. GENERAL INFORMATION
Picton Property Income Limited (the 'Company' and together with its
subsidiaries the 'Group') was established in Guernsey on 15 September 2005 and
entered the UK REIT regime on 1 October 2018.
The financial statements are prepared for the period from 1 April to 30
September 2025, with unaudited comparatives for the period from 1 April to 30
September 2024. Comparatives are also provided from the audited financial
statements for the year ended 31 March 2025.
2. MATERIAL ACCOUNTING POLICIES
These financial statements have been prepared in accordance with IAS 34
'Interim Financial Reporting'. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the financial statements of the Group as at and for the year
ended 31 March 2025.
The accounting policies applied by the Group in these financial statements are
the same as those applied by the Group in its financial statements as at and
for the year ended 31 March 2025.
The annual financial statements of the Group are prepared in accordance with
International Financial Reporting Standards ('IFRS') as issued by the IASB.
The Group's annual financial statements for the year ended 31 March 2025 refer
to new Standards and Interpretations none of which has a material impact on
these financial statements. There have been no significant changes to
management judgements and estimates as disclosed in the last annual report and
financial statements for the year ended 31 March 2025.
The Directors have assessed whether the going concern basis remains
appropriate for the preparation of the financial statements. They have
reviewed the Group's principal and emerging risks, existing loan facilities,
access to funding and liquidity position and then considered different adverse
scenarios impacting the portfolio and the potential consequences on financial
performance, asset values, dividend policy, capital projects and loan
covenants. Under all these scenarios the Group has sufficient resources to
continue its operations, and remain within its loan covenants, for a period of
at least 12 months from the date of these financial statements. Based on their
assessment and knowledge of the portfolio and market, the Directors have
therefore continued to adopt the going concern basis in preparing the
financial statements.
3. REVENUE FROM PROPERTIES
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2025
2025 2024
£000
£000 £000
Rents receivable (adjusted for lease incentives) 20,475 21,910 43,531
Surrender premiums 1,133 - 7
Dilapidation receipts 22 - 368
Other income - 127 286
21,630 22,037 44,192
Service charge income 3,884 4,846 9,827
25,514 26,883 54,019
Rents receivable includes lease incentives recognised of £0.1 million (30
September 2024: £0.3 million, 31 March 2025: £0.6 million).
4. PROPERTY EXPENSES
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2025
2025 2024
£000
£000 £000
Property operating costs 1,712 1,387 2,629
Property void costs 1,904 2,234 3,887
3,616 3,621 6,516
Recoverable service charge costs 3,884 4,846 9,827
7,500 8,467 16,343
5. OPERATING SEGMENTS
The Board is charged with setting the Group's business model and strategy. The
key measure of performance used by the Board to assess the Group's performance
is the total return on the Group's net asset value. As the total return on the
Group's net asset value is calculated based on the net asset value per share
calculated under IFRS as shown at the foot of the Balance Sheet, assuming
dividends are reinvested, the key performance measure is that prepared under
IFRS. Therefore, no reconciliation is required between the measure of profit
or loss used by the Board and that contained in the financial statements.
The Board has considered the requirements of IFRS 8 'Operating Segments'. The
Board is of the opinion that the Group, through its subsidiary undertakings,
operates in one reportable industry segment, namely real estate investment,
and across one primary geographical area, namely the United Kingdom, and
therefore no segmental reporting is required. The portfolio consists of 46
commercial properties, which are in the industrial, office, retail and leisure
sectors.
6. DIVIDENDS
Declared and paid: 6 months ended 6 months ended Year ended
30 September 30 September 31 March
2025 2024 2025
£000 £000 £000
Interim dividend for the period ended 31 March 2024: 0.925 pence - 5,050 5,050
Interim dividend for the period ended 30 June 2024: 0.925 pence - 5,039 5,039
Interim dividend for the period ended 30 September 2024: 0.925 pence - - 5,038
Interim dividend for the period ended 31 December 2024: 0.925 pence - - 5,032
Interim dividend for the period ended 31 March 2025: 0.95 pence 5,019 - -
Interim dividend for the period ended 30 June 2025: 0.95 pence 4,956 - -
9,975 10,089 20,159
The interim dividend of 0.95 pence per ordinary share in respect of the period
ended 30 September 2025 has not been recognised as a liability as it was
declared after the period end. A dividend of £4,911,000 will be paid on 28
November 2025.
7. EARNINGS PER SHARE
Basic and diluted earnings per share is calculated by dividing the net profit
for the period attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares in issue during the period,
excluding the average number of shares held by the Employee Benefit Trust. The
diluted number of shares also reflects the contingent shares to be issued
under the Long-term Incentive Plan.
The following reflects the profit and share data used in the basic and diluted
earnings per share calculation:
30 September 2025 30 September 31 March
2025
2024
Net profit attributable to ordinary shareholders of the Company from 15,143 11,511 37,323
continuing operations (£000)
Weighted average number of ordinary shares for basic earnings per share 525,258,662 545,472,873 544,037,179
Weighted average number of ordinary shares for diluted earnings per share 526,895,423 544,645,651 545,502,180
8. FAIR VALUE MEASUREMENTS
The fair value measurement for the financial assets and financial liabilities
are categorised into different levels in the fair value hierarchy based on the
inputs to valuation techniques used. The different levels have been defined as
follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities that the Group can access at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly. The fair
value of the Group's secured loan facilities, as disclosed in note 12, are
included in Level 2.
Level 3: unobservable inputs for the asset or liability. The fair value of the
Group's investment properties is included in Level 3.
The Group recognises transfers between levels of the fair value hierarchy as
of the end of the reporting period during which the transfer has occurred.
There were no transfers between levels for the period ended 30 September 2025.
The fair value of all other financial assets and liabilities is not materially
different from their carrying value in the financial statements.
The Group's financial risk management objectives and policies are consistent
with those disclosed in the consolidated financial statements for the year
ended 31 March 2025.
9. INVESTMENT PROPERTIES
6 months 6 months Year ended
ended ended 31 March
30 September 2025 30 September 2025
£000 2024 £000
£000
Fair value at start of period/year 700,694 724,043 724,043
Capital expenditure on investment properties 3,959 4,205 11,794
Acquisition - - 533
Disposals (29,515) (28,967) (50,031)
Reclassification of investment property (3,397) - -
(Loss)/profit on disposal of investment property (997) (33) 1,496
Unrealised movement on investment properties 5,556 253 12,859
Fair value at the end of the period/year 676,300 699,501 700,694
Historic cost at the end of the period/year 624,001 667,757 647,863
The fair value of investment properties reconciles to the appraised value as
follows:
30 September 30 September 31 March
2025 2024 2025
£000 £000 £000
Current
Appraised value of properties held for sale - 20,550 -
Lease incentives shown as debtors in respect of properties held for sale - (53) -
- 20,497 -
Non-current
Appraised value 693,711 700,770 723,145
Valuation of assets held under head leases 2,035 2,062 2,074
Lease incentives held as debtors (19,446) (20,390) (21,087)
Owner-occupied property - (3,438) (3,438)
676,300 679,004 700,694
Fair value at the end of the period/year 676,300 699,501 700,694
In Carlisle, the hotel occupier entered into a new 99-year lease with a
premium of £2.35 million being received as part of extending the lease term
and a rent reduction. As the present value of lease payments amount to at
least substantially all of the fair value of the underlying asset the lease
has been treated as a finance lease in the financial statements. The present
value of the remaining lease payments receivable under the lease are
classified in the consolidated balance sheet under 'Lease receivable'.
The sale of Stanford Building, London WC2 completed in the period with net
disposal proceeds of £32.9 million of which £29.5 million has been treated
as a disposal of investment property and £3.4 million has been treated as a
disposal of owner-occupied property (see note 10). A realised loss on disposal
of investment property of £1.0 million has been realised in the statement of
comprehensive income.
All of the Group's properties are Level 3 in the fair value hierarchy as they
involve the use of significant inputs and there were no transfers between
levels during the period. Level 3 inputs used in valuing the properties are
those which are unobservable, as opposed to Level 1 (inputs from quoted
prices) and Level 2 (observable inputs either directly, i.e. as prices, or
indirectly, i.e. derived from prices).
The investment properties were valued by Knight Frank LLP, Chartered
Surveyors, as at 30 September 2025 on the basis of fair value in accordance
with the RICS Valuation - Global Standards (incorporating the International
Valuation Standards) and the UK national supplement (the Red Book) current as
at the valuation date.
As at 30 September 2024, two assets were held for sale; contracts had been
exchanged to sell Longcross, Cardiff and Charlotte Terrace, London. Both of
these sales completed prior to 31 March 2025.
The fair value of the Group's investment properties has been determined using
an income capitalisation technique, whereby contracted and market rental
values are capitalised with a market capitalisation rate. The resulting
valuations are cross-checked against the equivalent yields and the fair market
values per square foot derived from comparable market transactions on an arm's
length basis.
Information on the significant unobservable inputs per sector of investment
properties is disclosed as follows:
30 September 2025 31 March 2025
Office Industrial Retail and leisure Office Industrial Retail and leisure
Appraised value (£000) 141,800 468,325 83,586 175,305 463,220 84,620
Area (sq ft, 000s) 685 3,255 699 706 3,227 692
Range of unobservable inputs:
Gross ERV (sq ft per annum)
- range £12.45 to £66.76 £3.14 to £4.09 to £12.45 to £93.46 £3.92 to £29.96 £3.35 to £28.12
£31.27 £28.86
- weighted average £33.13 £14.13 £12.28 £43.74 £13.69 £12.42
Net initial yield
- range 3.43% to 12.16% 0.0% to 22.03% 0.0% to 13.49% 3.51% to 12.10% 2.89% to 8.21% 0.00% to 24.58%
- weighted average 6.83% 4.68% 5.78% 6.96% 4.53% 6.15%
Reversionary yield
- range 6.69% to 13.33% 4.83% to 8.66% 6.75% to 16.86% 5.12% to 15.39% 4.76% to 9.17% 6.97% to 17.13%
- weighted average 10.34% 6.06% 8.22% 9.37% 5.83% 8.16%
True equivalent yield
- range 5.92% to 12.23% 4.82% to 9.91% 6.45% to 11.11% 5.14% to 11.30% 4.78% to 8.39% 6.50% to 12.75%
- weighted average 9.08% 5.79% 7.85% 8.20% 5.63% 7.91%
An increase/decrease in ERV will increase/decrease valuations, while an
increase/decrease in yield will decrease/increase valuations.
The Group's borrowings (note 12) are secured by a first ranking fixed charge
over the majority of investment properties held.
10. PROPERTY, PLANT & EQUIPMENT
Owner occupied property Plant and equipment Total
Right of use asset £000 £000 £000
£000
At 1 April 2024 - 3,391 108 3,499
Additions - - - -
Depreciation - (41) (27) (68)
Revaluation - 88 - 88
At 30 September 2024 - 3,438 81 3,519
Additions - - 12 12
Depreciation - (40) (27) (67)
Revaluation - 40 - 40
At 31 March 2025 - 3,438 66 3,504
Additions 1,201 - 1 1,202
Depreciation (5) (40) (29) (74)
Disposals - (3,438) - (3,438)
Profit on disposal - 40 - 40
At 30 September 2025 1,196 - 38 1,234
Property, plant & equipment included the fair value of the first floor
Stanford Building, London WC2 which was classified as owner-occupied property
as at 31 March 2025 and 30 September 2024. In September 2025 Stanford Building
was sold with net sale proceeds in relation to the owner-occupied element of
the building of £3,438,000. The Company simultaneously entered into a
ten-year lease, with a five-year break option, of the first floor Stanford
Building which has been classified as a right of use asset.
11. OBLIGATIONS UNDER LEASES
30 September 30 September 31 March
2025 2024 2025
£000 £000 £000
Current
Occupational lease liability 80 - -
Head lease liability 116 115 115
196 115 115
Non-current
Occupational lease liability 1,053 - -
Head lease liability 2,551 2,565 2,558
3,604 2,565 2,558
3,800 2,680 2,673
The Group has entered into a number of head leases in relation to its
investment properties. These leases are for fixed terms and subject to regular
rent reviews. They contain no material provisions for contingent rents,
renewal or purchase options nor any restrictions outside of the normal lease
terms.
During the period a new occupational lease was entered into in respect of the
first floor Stanford Building, London WC2. The lease is for a ten-year term,
with the option to break at the end of five years. The annual rent payable is
£299,100 with half rent payable over the first 12 months.
12. LOANS AND BORROWINGS
Maturity 30 September 2025 30 September 31 March
£000 2024 2025
£000 £000
Current
Aviva facility - 1,598 1,530 1,564
Capitalised finance costs - (284) (251) (176)
1,314 1,279 1,388
Non-current
Canada Life facility 24 July 2031 129,045 129,045 129,045
Aviva facility 24 July 2032 78,220 79,818 79,027
Capitalised finance costs - (1,318) (996) (919)
205,947 207,867 207,153
Total loans and borrowings 207,261 209,146 208,541
The Group has a loan with Canada Life Limited for £129.0 million which
matures in July 2031. Interest is fixed at 3.25% over the life of the loan.
Additionally, the Group has a loan facility agreement with Aviva Commercial
Finance Limited for £95.3 million, which was fully drawn on 24 July 2012. The
loan matures in July 2032, with approximately one-third repayable over the
life of the loan in accordance with a scheduled amortisation profile. Interest
on the loan is fixed at 4.38% over the life of the loan.
The Group also has a £50 million revolving credit facility ('RCF') with
National Westminster Bank Plc which matures in April 2028 and is currently
undrawn. The RCF interest is 165-170 basis points over SONIA on drawn balances
and has an undrawn commitment fee of 66 basis points.
The fair value of the secured loan facilities at 30 September 2025, estimated
as the present value of future cash flows discounted at the market rate of
interest at that date, was £185.8 million (30 September 2024: £187.4
million, 31 March 2025: £183.5 million). The fair value of the secured loan
facilities is classified as Level 2 under the hierarchy of fair value
measurements.
The weighted average interest rate on the Group's borrowings as at 30
September 2025 was 3.7% (30 September 2024: 3.7%, 31 March 2025: 3.7%).
13. SHARE CAPITAL AND OTHER RESERVES
The Company has 522,815,000 ordinary shares in issue of no par value (30
September 2024: 547,605,596, 31 March 2025: 536,400,000).
The balance on the Company's share premium account as at 30 September 2025 was
£164,400,000 (30 September 2024: £164,400,000, 31 March 2025:
£164,400,000).
30 September 2025 30 September 31 March
2025
2024
Ordinary share capital 536,400,000 547,605,596 547,605,596
Shares cancelled in the period/year (13,585,000) - (11,205,596)
Number of shares held in Employee Benefit Trust (3,119,446) (2,942,959) (2,942,959)
Number of ordinary shares 519,695,554 544,662,637 533,457,041
The fair value of share awards made under the Long-term Incentive Plan and the
Deferred Bonus Plan is recognised in other reserves.
Subject to the solvency test contained in the Companies (Guernsey) Law, 2008
being satisfied, ordinary shareholders are entitled to all dividends declared
by the Company and to all of the Company's assets after repayment of its
borrowings and ordinary creditors. The Trustee of the Company's Employee
Benefit Trust has waived its right to receive dividends on the 3,119,446
shares it holds but continues to hold the right to vote. Ordinary shareholders
have the right to vote at meetings of the Company. All ordinary shares carry
equal voting rights. The Employee Benefit Trust acquired 1,200,000 shares in
the period (30 September 2024: 2,100,000 shares, 31 March 2025: 2,100,000
shares) and 1,023,513 share awards were exercised in the period (30 September
2024: 799,481 shares, 31 March 2025: 799,481 shares).
The Directors have authority to buy back up to 14.99% of the Company's
ordinary shares in issue, being 78,486,021 shares, subject to the annual
renewal of the authority from shareholders. Any buyback of ordinary shares
will be made subject to Guernsey law, and the making and timing of any
buybacks will be at the absolute discretion of the Board. Over the period the
Company bought back and cancelled 13,585,000 ordinary shares at a cost of
£10.5 million (30 September 2024: nil, 31 March 2025: 11,205,596 shares for
£7.5 million). The value of the shares cancelled of £10.5 million is
deducted from Retained Earnings. At 30 September 2025 the remaining authority,
following repurchases since authority from shareholders was granted on 30 July
2025, has now reduced to 77,711,816 ordinary shares.
14. ADJUSTMENT FOR NON-CASH MOVEMENTS IN THE CASH FLOW STATEMENT
6 months ended 6 months Year ended
ended
30 September 2025
31 March
30 September
2025
£000
2024 £000
£000
Movement in investment property valuation (5,556) (253) (12,859)
Loss/(profit) on disposal of investment property 997 33 (1,496)
Revaluation of owner-occupied property - (88) (128)
Profit on disposal of property, plant & equipment (40) - -
Share-based provisions 405 400 751
Depreciation of tangible assets 74 68 135
(4,120) 160 (13,597)
15. NET ASSET VALUE
The net asset value per share calculation uses the number of shares in issue
at the period end and excludes the actual number of shares held by the
Employee Benefit Trust at the period end; see note 13.
At 30 September 2025, the Company had a net asset value per ordinary share of
£1.02 (30 September 2024: £0.96, 31 March 2025: £1.00).
16. RELATED PARTY TRANSACTIONS
There have been no changes in the related party transactions described in the
last annual report that could have a material effect on the financial position
or performance of the Group in the first six months of the current financial
year.
The Company has no controlling parties.
17. EVENTS AFTER THE BALANCE SHEET DATE
A dividend of £4,911,000 (0.95 pence per share) was approved by the Board on
27 October 2025 and is payable on 28 November 2025.
The company purchased and cancelled 3,085,680 ordinary shares between 1
October 2025 and 11 November 2025 at a cost of £2,437,000.
END
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