SEGRO acquires central London warehouse from Schroders for £133m

Jamie Gordon
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SEGRO acquires central London warehouse from Schroders for £133m
FTSE 100 listed property development and investment company, SEGRO (LON:SGRO), announced on Wednesday that it agreed to pay £133 million to acquire the 13-acre urban warehouse estate in Canning Town, from Schroders (LON:SDR).

The company boasts that the estate is in a prime location, close to Canary Wharf and London City Airport, as well as being close tot he A12 and A13 main roads which connect it directly with the rest of central London. SEGRO adds that it is within ‘walking distance’ of three Zone 2 and 3 London Underground stations, which will allow workers easy access to the estate.

The company also state that Electra Park offers 21,200 sq metres of lettable space across ten units, of which nine are currently let and the final unit is currently under offer.

The average weighted average unexpired lease term on the let space is 4.3 years to break and 6.4 years to expiry. The estate expects to generate £3.4 million in topped-up passing rent, which SEGRO says reflects a low average in-place rent of around £14 per square foot, with an estimated rental value of £21 per square foot.

Illustrating these presently low rental levels and the potential of what the company described as an ‘unusually central location’, the topped-up net initial yield upon acquisition is 2.3%, which will rise to 2.6% once the vacant unit is let out.

Speaking on the Electra Park takeover, SEGRO’s Greater London Business Unit Director, Alan Holland, said:

“This acquisition is an exciting opportunity for SEGRO to consolidate its leading London footprint and is a strong fit with its well established prime urban warehouse portfolio. Situated on the edge of Zone 2, at the gateway between Central London and the rest of our East London assets, it is in an area that is currently undergoing significant redevelopment and modernisation. This should further improve the already attractive supply/ demand dynamics and create the potential for strong rental growth, as we have seen happen in other inner London markets.”

“Electra Park helps us to build further scale in an area where we have made great progress through the East Plus partnership in conjunction with the Greater London Authority. This enables us to improve choice and provide an excellent customer experience as well as represents an opportunity for us to create value by applying our asset management expertise and knowledge of the local market.”

Following the update, and its seemingly positive Q3 results, SEGRO shares dipped by 1.19% or 11.20p, to 926.60p a share 21/10/20 11:45 BST.

Avast shares insecure despite 8% organic revenue growth

Jamie Gordon
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Avast shares insecure despite 8% organic revenue growth
FTSE 100 listed cybersecurity giant, Avast (LON:AVST), saw its shares flatline despite a seemingly positive set of financial results for third quarter trading. At actual rates, adjusted revenues were up 2.6% year-on-year during the third quarter, up from £220.3 million, to £226.0 million. Meanwhile, on an organic basis – excluding acquisitions, disposals, and currency changes – Q3 revenues jumped by 8.6% year-on-year, up from £209.2 million, to £225.1 million. The year-to-date comparison illustrated pretty much the same trend. While adjusted revenues, on face value, were up by 1.9% from £647.1 million to £659.1 million, organic revenues were up 7.3%, from £613.9 million, to £654.8 million. Avast said that its customer trends normalised as countries moved out of lockdown, and that adjusted revenue percentage growth overtook adjusted billings percentage growth in Q3. The company added that its consumer desktop business continues to perform well and in line with pre-pandemic levels. It also said that adjusted EBITDA rose by 3.3%, to $126.0 million, during the third quarter, with adjusted EBITDA also increasing by 2.5% during the year-to-date, up to $367.3 million.

Avast stated that strong cash generation also enabled it to accelerate deleveraging, with a voluntary repayment of $100 million in debt during Q3. It added that its liquid balance sheet will allow it to take advantage of additional development opportunities.

Speaking on the results, company Chief Executive, Ondrej Vlcek, said: “As cyber-attackers have intensified their efforts through the pandemic to exploit digital vulnerabilities, Avast has been on the front line in protecting people’s personal information and privacy. The value of Avast’s services and technologies is reflected in the company’s resilient financial performance, which underpins continued investment in our growth and focus on innovation.”

Looking ahead, the company’s outlook read: “As a result of the strong demand in the second quarter, revenue growth is expected to continue to outpace billings growth in the second half of the year. The Group reaffirms its FY 2020 outlook for Adjusted Revenue to be at the upper end of mid-single digit growth, and a broadly flat Adjusted EBITDA margin percentage.” Following the update, Avast shares dipped notably, before recovering, to a modest dip of 0.19%, at 512.00p 21/10/20 11:30 BST a share – though it could end up either in the red of green by the day’s end. AT this price, it is currently more than 5% below analysts’ target price of 539.85p, and beneath its six-month peak of 600.00p a share. At present, analysts have a consensus ‘Buy’ stance on the stock; its p/e ratio of 20.14 is beneath the computer and tech sector average of 66.38; and, the Marketbeat has a 69.18% ‘Outperform’ rating on the stock.  

TriplePoint Social Housing REIT presents at the UK Investor Magazine Virtual Conference

UK Investor Magazine
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TriplePoint Social Housing REIT presents at the UK Investor Magazine Virtual Conference

Triple Point Social Housing REIT plc is improving the lives of vulnerable people across the UK by meeting the critical demand for specialised supported housing.

Our homes give residents greater independence and dignity than traditional institutional care whilst still addressing their specialist care needs.

Download presentation slides here

Jamie Broderick, Director of the Impact Investing Institute, speaks at the UK Investor Magazine Virtual Conference

UK Investor Magazine
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Jamie Broderick, Director of the Impact Investing Institute, speaks at the UK Investor Magazine Virtual Conference

The Impact Investing Institute is an independent, non-profit organisation which aims to accelerate the growth and improve the effectiveness of the impact investing market. It will do this by raising awareness of, addressing barriers to and increasing confidence in investing with impact.

Download presentation slides

Power Metal Resources presents at the UK Investor Magazine Virtual Conference 20th October

UK Investor Magazine
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0
Power Metal Resources presents at the UK Investor Magazine Virtual Conference 20th October
Power Metal Resources plc (LON: POW) is a London listed metal exploration and development company. Power Metal Resources principal strategic objective is the discovery of large scale metal deposits and we are focused on cobalt, copper, gold, lithium, nickel and PGM. Download presentation slides here

React Group shares surge 10% on higher demand

Safiya Bashir
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0
React Group shares surge 10% on higher demand
React Group shares (LON: REAT) surged over 10% on Tuesday morning as the group released a trading update for the year ended 30 September 2020. The cleaning, hygiene, and decontamination company reported a 42% organic growth in revenue to approximately £4.4m – up from £3.1m. React Group said the growth in revenue was partly due to underlying performance in the core business, and the growing demand of cleaning amid the Coronavirus pandemic. Thanks to the increase in Corona-related decontaminations and other projects for the group, React expects pre-tax profit for the year ending 30 September to be ahead of market expectations. The cleaning group saw a growth in demand from healthcare, rail, and facilities management sectors. Shaun Doak, chief executive of the group, said: “We are pleased to have delivered another year of strong progress in which we saw accelerating organic growth and achievement of the Group’s first full year profit. Whilst we have seen a level of disruption from COVID-19, we have also experienced incremental demand. Core sectors of the business performed well alongside net new customer relationships that have evolved in areas of development such as education and residential care homes. This was not true of every sector however, work declined at the height of lockdown in the judiciary where we sanitise and decontaminate courtrooms, cells, and custody vehicles. The sector has since been returning to near normal activity as restrictions have eased. The new financial year has started well with momentum continuing. The immediate outlook is positive, although we are mindful that the seemingly ever-changing environment in which we work can bring with it both opportunities and challenges. As a management team we are reviewing tactics almost daily to ensure REACT remains an effective solution for our customers, our colleagues remain safe, and the business profitable.” React Group shares (LON: REAT) are trading 5% at 1,26 (1050GMT).

Justin Urquhart Stewart speaks at the UK Investor Magazine Virtual Conference 20th October

UK Investor Magazine
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Justin Urquhart Stewart speaks at the UK Investor Magazine Virtual Conference 20th October
Justin Urquhart Stewart discusses US elections, Brexit, ESG, growth companies and investing regionally within the UK. Regionally was founded by Justin Urquhart Stewart, co-founder of Seven Investment Management (7IM) and Jim Odell, a TATA VP and Accenture Partner. Julie Cunningham is our entrepreneurial and commercially astute Financial Director.

Metro Bank reveals increase in lending, shares rise

Safiya Bashir
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1
Metro Bank reveals increase in lending, shares rise
Metro Bank shares (LON: MTRO) surged by over 4% on Wednesday as the group revealed a 2% increase in lending. In an update for the third quarter, the lender said that it handed out £15.09bn in loans for the three months to 30 September. Metro Bank provided £1.3bn through the Bounce Back Loans scheme to over 33,000 customers, as well as report growth in loans for small and medium-sized businesses. In the update, the lender did not provide an update for its bottom line. For the first half of the year, Metro Bank reported a £240m loss. The bank did say that activity levels are continuing to gradually recover post-lockdown. New account openings tracking higher at around 90% of pre-pandemic levels. Daniel Frumkin, the chief executive, said: “In a challenging environment, Metro Bank has delivered a good performance with loan growth reflecting our support for government-backed lending schemes. “We have made further progress against the strategic priorities we set out at the beginning of 2020, completing the acquisition of RateSetter in the quarter and launching new initiatives which enable us to meet more customer needs. The continued dedication of our colleagues and their focus on excellent customer service underpins our position as the UK’s best community bank.” Metro Bank shares (LON: MTRO) are trading 1.45% higher at 60,36 (0934GMT).  

FTSE 100 down on lockdown fears

Safiya Bashir
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0
FTSE 100 down on lockdown fears
The FTSE 100 fell in early trading on Wednesday over concerns of new Coronavirus restrictions. Although there was optimism over achieving the US stimulus bill, the growing fears of new lockdowns across Europe dampened the blue-chip index. Connor Campbell from Spreadex said: “Nancy Pelosi and Steven Mnuchin appeared to have made progress on a stimulus agreement – the House Leader said she was ‘optimistic’ a deal could be struck in the next few days – but with Mitch McConnell reportedly privately telling Republican senators he has advised the White House to nix the package. “This because it would put senators up for re-election in the tricky position of either going against the President, or backing a deal their fiscally conservative base would be opposed to.” Campbell added: “As tighter restrictions are introduced across the UK and Europe, investors are clearly concerned that a new lockdown will lead to slower economies.

“The FTSE dropped 0.8%, sinking back to 5850 after straining to finish just above 5900 on Tuesday. Its morning was exacerbated by a sharp rise by sterling, which was up half a percent against the dollar and 0.3% against the euro following a 0.5% increase in UK inflation in September. The strength of that rise is perhaps surprisingly, given the lack of Brexit deal progress – or, rather, the active pursuit of a no deal exit – in the last few days.

“Over in the Eurozone, as the continent continues to shutter towns and cities to combat coronavirus, the DAX dipped under 12700 to hit a near one-month low as it fell 0.6%, with the CAC also down 0.5%.”

Today saw inflation increase from 0.2% in August to 0.5% in September, helped up by the Eat Out to Help Out scheme, which ran through the month of August, and over 100m meals were bought.  

Inflation increases – yet remains well below BoE target

Safiya Bashir
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2
Inflation increases – yet remains well below BoE target
UK inflation rose 0.5% last month following the end of the Eat Out to Help Out scheme. New data from the ONS consumer price index (CPI) showed inflation to increase from 0.2% in August to 0.5% in September. The rise of restaurant meals and transport helped to push up the level of inflation. The ONS explained: “Transport costs, and restaurant and café prices, following the end of the Eat Out to Help Out scheme, made the largest upward contributions (of 0.23 and 0.21 percentage points, respectively) to the change in the CPIH 12-month inflation rate between August and September 2020. “This was partially offset by smaller downward contributions from furniture, household equipment and maintenance; games, toys and hobbies; and food and non-alcoholic beverages.” The Eat Out to Help Out scheme ran through the month of August and over 100m meals were bought. Jonathan Athow, the deputy national statistician for economic statistics at the ONS, said airfares usually have a much higher impact on inflation at this time of year. “Airfares would normally fall substantially at this time due to the end of the school holidays, but with prices subdued this year, as fewer people have been traveling abroad, the price drop has been less significant,” he said. Despite the increase, inflation remains to be well below the 2% target set by the Bank of England. According to Paul Dales, chief UK economist at Capital Economics, the central bank is likely to introduce new measures to boost the economy next month. “With CPI inflation just 0.5% in September, it’s hard to think of reasons why the Bank of England won’t launch another £100bn or so of QE at the November meeting. And despite public borrowing still jumping, the government may yet spend more,” said Dales.
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