REG - SEGRO PLC - RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2025

SEGROAnnouncement

Thu 07:01

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RNS Number : 2832T  SEGRO PLC  31 July 2025

 

SEGRO plc's Half Year 2025 Results have been submitted in full unedited text
to the Financial Conduct Authority's National Storage Mechanism and will be
available shortly for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and are also
available on the SEGRO website at: www.segro.com/investors
(http://www.segro.com/investors) . Investors should read the full unedited
text of the Half Year 2025 Results, including the description of the Group's
principal risks and uncertainties, and not rely only on the summarised
information set out in this announcement. Notes or Tables that are not
included herein refer to the full unedited text of the Half Year 2025 Results.

 

31 July 2025

SEGRO plC
RESULTS FOR the six months ENDed 30 june 2025

STRONG EARNINGS AND DIVIDEND GROWTH,

 IMPROVING DEVELOPMENT MOMENTUM

 

KEY MESSAGES

 

 ●    Strong 7.8 per cent like-for-like net rental income growth from our existing
      portfolio as we continue to capture embedded rent reversion, supporting 6.5
      per cent earnings and 6.6 per cent dividend growth per share.
 ●    Improving development prospects, with a pick-up in the near-term development
      pipeline and encouraging levels of demand for our speculatively developed
      urban space.
 ●    Significant progress in building our data centre platform, progressing plans
      for our 2.3GW+ land-enabled power bank and signing a joint venture to develop
      our first fully fitted data centre.

Commenting on the results, David Sleath, Chief Executive, said:

"Our modern, sustainable portfolio, located in Europe's most attractive and
supply-constrained markets, has continued to perform well through the first
half of the year, driven by leasing, asset management and the capture of
reversion. We have a further £172 million of rent available through rent
reviews, renewals and the lease up of vacant space, which will continue to
support attractive underlying earnings growth.

"Our high quality, well-located land bank and options provide further
opportunity to create value and grow income through development, with over
£500 million of potential rent. Whilst occupier decision making remains
protracted, we are encouraged by the pick-up in our near-term pre-let
development pipeline and the  active conversations that we are having with
customers.

"SEGRO has consistently delivered attractive and compounding increases in both
earnings and dividends through the cycle. We are confident in our ability to
continue to do this due to the embedded growth potential of our existing
portfolio, combined with the potential rent from building out our development
pipeline. Our ability to develop fully fitted data centres offers significant
additional value creation upside beyond this."

 

HIGHLIGHTS(1):

 ●    Strong 7.8 per cent growth in like-for-like net rental income from the
      existing portfolio, driven by a 55 per cent uplift from UK rent reviews and
      renewals (Group: 33 per cent, Continental Europe: 6 per cent).
 ●    £31 million of new headline rent signed during the period (H1 2024: £48
      million), reflecting the performance of the existing portfolio and a lower
      level of big box pre-let signings (H1 2025: £3 million, H1 2024: £17
      million).
 ●    Adjusted pre-tax profit of £252 million up 11 per cent compared with the
      prior year (H1 2024: £227 million). Adjusted EPS is 18.1 pence, up 6.5 per
      cent (H1 2024: 17.0 pence); the differential growth rate is due to the higher
      average share count versus H1 2024.
 ●    Adjusted NAV per share of 910 pence (31 December 2024: 907 pence), the first
      increase since mid-2022. The portfolio value increased 0.5 per cent to £18.5
      billion (H1 2024: 0.0 per cent change) and rental values (ERV) grew by 1.0 per
      cent during H1 2025 (H1 2024: 1.4 per cent).
 ●    Development completions added £19 million of potential new headline rent,
      delivered at a yield on cost of 7.7 per cent.  92 per cent of this has been
      leased and all has been, or is expected to be, certified BREEAM 'Excellent'
      (or local equivalent) or higher.
 ●    A further £50 million of potential rent from development projects under
      construction or in advanced negotiations, 49 per cent of which has been or is
      currently expected to be pre-let. Expected development yield for these
      projects is 7.3 per cent.
 ●    Formation of a 50:50 joint venture with Pure DC Group to develop our first
      fully fitted data centre project. We are on track to submit planning for this
      scheme in H2 2025 and continue to advance plans for our 2.3GW+ land-enabled
      power bank, mostly located in key European Availability Zones.
 ●    Net investment of £388 million: £243 million of acquisitions, including
      SELP's completion on a portfolio of Continental European big box assets
      (formerly owned by Tritax EuroBox) and a further £180 million invested into
      development capex. Disposals totalled £35 million and were all above book
      value.
 ●    Balance sheet remains strong with a LTV of 31 per cent and £1.9 billion of
      cash and undrawn committed facilities, positioning the Group to pursue further
      growth opportunities.
 ●    Interim dividend increased by 6.6 per cent to 9.7 pence (2024: 9.1 pence).

 

OUTLOOK

SEGRO continues to be positioned well for further growth. Our portfolio is of
irreplicable quality, having been purposefully curated over the past 15 years.
Two-thirds of it is located in Europe's largest cities, with the remaining
one-third strategically located near logistics hubs and along key
transportation corridors. These locations remain in high demand from
occupiers, supported by powerful, enduring structural trends, and have a
shortage of modern, sustainable space with low land availability and
restrictive planning policies which limit the supply of new, competing space.

Our portfolio is full of current and future opportunity:

 ●    Rent roll growth from our existing portfolio supports underlying earnings
      growth as we capture £116 million of reversion, reduce vacancy (£56 million)
      and drive further market rental growth (2 to 4 per cent for our big box
      portfolio and 3 to 6 per cent for urban) supported by the favourable
      supply-demand dynamics in our chosen markets.
 ●    Our development pipeline will deliver additional rent roll growth, as we
      utilise our exceptional landbank, which provides the opportunity to deliver
      £406 million of new rent, at a profitable 7 to 8 per cent development yield
      (and a 10 to 11 per cent yield on new capital invested) and we have a further
      £123 million of land options. Whilst new development commitments have been
      lower over the past 18 months, we are encouraged by the advanced pre-let
      conversations and the momentum building in our near-term pipeline.
 ●    Furthermore, in addition to our existing 0.5GW data centre portfolio which
      generates £56 million of rent, we have an exciting opportunity to capitalise
      on this high-growth market through a further 1.8GW+ of power capacity, mostly
      located in Europe's key Availability Zones. We have the flexibility and
      capability to execute on this through both powered shell and fully fitted
      models which will allow us to tailor our offer to our co-location and
      hyperscale customer base, in order to optimise the value creation
      opportunity.

Our business is therefore well-placed for further attractive, compounding
growth in earnings and dividends, supported by our ability to more than double
our rent roll, due to the embedded growth potential of our existing portfolio
and additional rent associated with our development pipeline. In addition, our
ability to develop fully fitted data centres offers significant additional
value creation potential beyond this.

 
WEBCAST / CONFERENCE CALL FOR INVESTORS AND ANALYSTS

A live webcast of the results presentation will start at 08:30am (UK time) at:

https://www.investis-live.com/segro/6853e40b75e117000f7089ea/fbddf
(https://www.investis-live.com/segro/6853e40b75e117000f7089ea/fbddf)

The webcast will be available for replay at SEGRO's website at:
http://www.segro.com/investors (http://www.segro.com/investors) shortly after
the live presentation.

 A conference call facility will be available at 08:30 (UK time) on the           An audio recording of the conference call will be available until 7 August
 following number:                                                                2025 on:

 Dial-in:                           +44 (0)800 041                                UK:                                  +44 (0)20
 8829                                                                             3936 3001

                                       +44                                        Access code:                  785205
 (0)20 3807 9124

 Access code:                828549

 

A video of David Sleath, Chief Executive, discussing the results will be
available to view on www.segro.com (http://www.segro.com) , together with this
announcement, the Half Year 2025 Property Analysis Report and other
information about SEGRO.

 

FINANCIAL SUMMARY
                                                            6 months to    6 months to       Change

30 June 2025
30 June 2024
 per cent
 Adjusted(2) profit before tax (£m)                         252            227               11.0
 IFRS profit before tax (£m)                                264            235               -
 Adjusted(3) earnings per share (pence)                     18.1           17.0              6.5
 IFRS earnings per share (pence)                            18.3           16.9              -
 Dividend per share (pence)                                 9.7            9.1               6.6
 Total Accounting Return (%)(4)                             2.6            0.3               -
                                                            30 June 2025   31 December 2024  Change

 per cent

 Assets under Management (£m)                               21,442         20,296
 Portfolio valuation (SEGRO share, £m)                      18,495         17,770            0.5(5)
 Net true equivalent yield (%)                              5.4            5.4
 Adjusted(6 7) net asset value per share (pence, diluted)   910            907               0.3
 IFRS net asset value per share (pence, diluted)            891            889
 Net debt (SEGRO share, £m)                                 5,626          5,000
 Loan to value ratio including joint ventures at share (%)  31             28
 Net debt:EBITDA(8)  (times)                                8.8            8.6

1. Figures quoted on pages 1 to 13 refer to SEGRO's share, except for land
(hectares) and space (square metres) which are quoted at 100 per cent, unless
otherwise stated. Please refer to the Presentation of Financial Information
statement in the Financial Review for further details.

2. A reconciliation between Adjusted profit before tax and IFRS profit before
tax is shown in Note 2 to the condensed financial information.

3. A reconciliation between Adjusted earnings per share and IFRS earnings per
share is shown in Note 11 to the condensed financial information.

4. Total Accounting Return is calculated based on the opening and closing
adjusted NAV per share adding back dividends paid during the period.

5. Percentage valuation movement during the period based on the difference
between opening and closing valuations for all properties including buildings
under construction and land, adjusting for capital expenditure, acquisitions
and disposals. Table 3 in the Supplementary Notes provides a reconciliation to
the condensed financial information.

6. A reconciliation between Adjusted net asset value per share and IFRS net
asset value per share is shown in Note 11 to the condensed financial
information.

7. Adjusted net asset value is in line with EPRA Net Tangible Assets (NTA)
(see Table 5 in the Supplementary Notes for a NAV reconciliation).

8. For further information on net debt:EBITDA see footnote 2 to Table 2 in the
Supplementary Notes.

 
OPERATING SUMMARY & KEY METRICS
                                                                                                          H1 2025   H1 2024   FY 2024

 PORTFOLIO VALUATION FLAT, CONTINUED RENTAL GROWTH (see page 7):
 Portfolio valuation change (%)                                    Group                                  0.5       0.0       1.1
                                                                   UK                                     0.4       0.9       2.1
                                                                   CE                                     0.6       (1.4)     (0.8)
 ERV growth (%)                                                    Group                                  1.0       1.4       3.2
                                                                   UK                                     1.4       1.5       3.7
                                                                   CE                                     0.4       1.3       2.3

 ACTIVE ASSET MANAGEMENT DRIVING OPERATIONAL PERFORMANCE (see page 9):
 Total new rent contracted during the period (£m)                                                         31        48        91
 Pre-lets signed during the period (£m)                                                                   3         17        20
 Like-for-like net rental income growth (%):                                                              7.8       5.3       5.8
     Group
                                                                    UK                                    8.4       4.0       5.9
                                                                    CE                                    6.7       7.4       5.7
 Uplift on rent reviews and renewals (%)                            Group                                 33        28        34
 (note: excludes uplifts from indexation)                           UK                                    55        36        43
                                                                    CE                                    6         7         7
 Occupancy rate (%)                                                                                       94.3      94.6      94.0
 Customer retention (%)                                                                                   90        87        80
 Installed solar capacity (MW)                                                                            133       78        123

 INVESTMENT ACTIVITY TO DRIVE PORTFOLIO PERFORMANCE (see page 10):
 Development capex (£m)                                                                                   180       211       471
 Acquisitions (£m)                                                                                        243       190       454
 Disposals (£m)                                                                                           35        251       896

 Development capex for FY 2025 now expected to be c.£400 million due to fewer
 than expected pre-lets signed.

 EXECUTING AND GROWING OUR PROFITABLE DEVELOPMENT PIPELINE (see page 10):
 Development completions:
        -    Space completed (sq m)                                                                       196,800   269,100   374,700
        -    Potential rent (£m) (Rent secured)                                                           19 (92%)  27 (78%)  37 (84%)
 -    Development yield (%)                                                                               7.7       7.0       6.9
        -    BREEAM 'Excellent'(1) or above (%)                                                           100       96        97
 Current development pipeline potential rent (£m) (Rent secured)                                          34 (32%)  47 (64%)  46 (50%)
 Near-term pre-let development pipeline potential rent (£m)                                               16        2         5

1. Or local equivalent.

 

 
CONTACT DETAILS FOR INVESTOR / ANALYST AND MEDIA ENQUIRIES:
 SEGRO           Soumen Das                                        Tel: + 44 (0) 20 7451 9110

(after 11am)
                 (Chief Financial Officer)
                 Claire Mogford                                    Mob: +44 (0) 7710 153 974

                 (Head of Investor Relations)                      Tel: +44 (0) 20 7451 9048

(after 11am)
 FTI Consulting  Richard Sunderland/ Ellie Sweeney/ Eve Kirmatzis  Tel: +44 (0) 20 3727 1000

 

FINANCIAL CALENDAR
 2025 interim dividend ex-dividend date  7 August 2025
 2025 interim dividend record date       8 August 2025
 2025 interim dividend payment date      19 September 2025
 2025 Third Quarter Trading Update       21 October 2025
 Full Year 2025 Results (provisional)    20 February 2026

 

ABOUT SEGRO

SEGRO is a UK Real Estate Investment Trust (REIT), listed on the London Stock
Exchange and Euronext Paris, and is a leading owner, manager and developer of
modern warehouses, industrial property and data centres. It owns or manages
10.8 million square metres of space (116 million square feet) valued at £21.4
billion serving customers from a wide range of industry sectors. Its
properties are located in and around major cities and at key transportation
hubs in the UK and in seven other European countries.

For over 100 years SEGRO has been creating the space that enables
extraordinary things to happen. From modern big box warehouses, used primarily
for regional, national and international distribution hubs, to urban
warehousing, located close to major population centres and business districts,
it provides high-quality assets that allow its customers to thrive.

A commitment to be a force for societal and environmental good is integral to
SEGRO's purpose and strategy. Its Responsible SEGRO framework focuses on three
long-term priorities where the company believes it can make the greatest
impact: Championing Low-Carbon Growth, Investing in Local Communities and
Environments and Nurturing Talent.

Striving for the highest standards of innovation, sustainable business
practices and enabling economic and societal prosperity underpins SEGRO's
ambition to be the best property company.

See www.SEGRO.com for further information.

Forward-Looking Statements: This announcement contains certain forward-looking
statements with respect to SEGRO's expectations and plans, strategy,
management objectives, future developments and performance, costs, revenues
and other trend information. All statements other than historical fact are, or
may be deemed to be, forward-looking statements. Forward-looking statements
are statements of future expectations and all forward-looking statements are
subject to assumptions, risk and uncertainty. Many of these assumptions, risks
and uncertainties relate to factors that are beyond SEGRO's ability to control
or estimate precisely and which could cause actual results or developments to
differ materially from those expressed or implied by these forward-looking
statements. Certain statements have been made with reference to forecast
process changes, economic conditions and the current regulatory environment.
Any forward-looking statements made by or on behalf of SEGRO are based upon
the knowledge and information available to Directors on the date of this
announcement. Accordingly, no assurance can be given that any particular
expectation will be met and you are cautioned not to place undue reliance on
the forward-looking statements. Additionally, forward-looking statements
regarding past trends or activities should not be taken as a representation
that such trends or activities will continue in the future. The information
contained in this announcement is provided as at the date of this announcement
and is subject to change without notice. Other than in accordance with its
legal or regulatory obligations (including under the UK Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), SEGRO does not undertake to update forward-looking statements,
including to reflect any new information or changes in events, conditions or
circumstances on which any such statement is based. Past share performance
cannot be relied on as a guide to future performance. Nothing in this
announcement should be construed as a profit estimate or profit forecast. The
information in this announcement does not constitute an offer to sell or an
invitation to buy securities in SEGRO plc or an invitation or inducement to
engage in or enter into any contract or commitment or other investment
activities. Neither the content of SEGRO's website nor any other website
accessible by hyperlinks from SEGRO's website are incorporated in, or form
part of, this announcement.

 

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