Town Centre Securities PLC (LON:TOWNT) provides mainly regional commercial property exposure, with a focus on the fast growing cities of Leeds and Manchester, where management has a deep knowledge of the markets. TCS is a family-run business with a strong income focus and a 57-year record of increased or maintained DPS. It employs intensive asset management and capital recycling to drive income growth and capital returns. Management has provided details of a substantial pipeline of continuing development opportunities, with the potential to add materially to our forecast earnings and NAV over time.
Positive developments in H118
H118 (the six months ended 31 December 2017) was a period of significant change within the portfolio, including strategic disposals and continuing business development, but the underlying trends continued to be positive. With occupancy remaining high (99%) and like-for-like rents advancing (by 2.2%), TCS was able to limit the negative impact of disposals on near-term property income and earnings, before the benefits of development completions are fully felt. The car park operation, CitiPark (c 25% of recurring operating profit) grew further. H118 NAV per share grew 4.5% on end-FY17 to 375p, supported by valuation gains on completed and development assets. Including DPS paid, the H118 NAV total return was 6.6%, with an unchanged DPS of 3.25p declared for H118.
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