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Segro profits soar as online retail raises demand for warehouse space during pandemic

Segro dividend up to 15.2p per share

Segro (LON:SGRO) announced a 62% increase in profit during 2020, as a result of higher property valuations.

The property investment company also relaunched its sustainability plan.

The surge in online retailing during the coronavirus pandemic caused an increase in the price of industrial property values. The valuation of Segro’s portfolio rose by 10.3% during 2020.

“The pandemic has reinforced the importance of efficient and resilient distribution networks to facilitate the provision of a wide variety of goods and services, leading to increased demand for warehouse space,” said David Sleath, chief executive of Segro.

Subsequently, the company’s pre-tax profit soared to £1.5bn, up from £902m the year before.

Segro invested £1.3bn in acquiring new properties throughout the year, a record for the company funded by share issues and additional debt.

The FTSE 100 property company confirmed a final year dividend of 15.2p, up by 5.6% from 14.4p. Segro’s share price jumped up by 1.5% to 977.4p, having moved sideways since the beginning of the year.

Commenting on the results, David Sleath, chief executive, said:

“SEGRO delivered another strong set of financial results in 2020, with record lettings driven by our customer focus and the increasing demand for prime industrial properties from a wide occupier base,” Sleath said.

“The pandemic has reinforced the importance of efficient and resilient distribution networks to facilitate the provision of a wide variety of goods and services, leading to increased demand for warehouse space. 2020 saw a record level of investment for SEGRO as we seek to capitalise on these favourable trends, giving us confidence in our ability to drive further growth in rental income, earnings and dividends over the coming years.”

Additionally, following a review, Segro reinstated its sustainability plan. 

“We have also reviewed, challenged and refreshed our approach to sustainability. Today we are re-launching our Responsible SEGRO framework, with three long-term priorities that outline our commitment to society and position us to truly deliver on our Purpose of ‘creating the space that enables extraordinary things to happen’,” Sleath said.

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