“Reflecting the Q1 production performance, full-year guidance is reduced for copper and cobalt, but increased for nickel and ferrochrome, while the slower than expected ramp-up at Zhairem reduces full-year zinc production guidance by 9%,” said Glencore CEO Gary Nagle.
Copper production fell 14% to 257.8kt compared to 301.2kt year-on-year as a result of short-term geotechnical constraints at its Katanga operation, a basis change from its sale of Ernest Henry in January 2022 and lower copper production units produced within the company’s zinc business.
Glencore reported a 15% decline in zinc to 241.5kt from 282.6kt, due to Mout Isa Covid-19-related absences and a scheduled close for mining operations at Iscaycruz in Peru over Q3 2021.
The company also experienced a 15% drop in lead to 46.8kt against 55.3kt.
Gold production took a hit of 16% to 189koz from 224koz, alongside a 16% drop in silver to 6,515koz against 7,761koz and a 3% fall in ferrochrome to 387kt from 399kt.
Glencore reported a nickel output of 30.7kt compared to 25.2kt in Q1 2021 on the back on its Konimabo project working both production lines during 2022.
The mining group additionally noted a 43% increase in cobalt to 9.7kt against 6.8kt during the quarter in 2021.
“For the most part, the Group’s quarterly production was in line with our expectations,” said Nagle.
“However, production in Q1 2022 reflects a number of temporary impacts, including geotechnical challenges at Katanga and Covid-19 absenteeism, particularly in Australia.”
“Koniambo’s Q4 2021 higher operating rates continued into Q1 this year, while overall coal production, on a like-for-like basis, reflecting our increased Cerrejón ownership, was broadly flat period-on-period.”
London’s small and mid cap markets gained in early afternoon trade on Thursdayas companies such as Lancashire Holdings, 888 and Hurricane Energy shared trading updates and results.
Telecom Plus shares gained 5.5% to 1,615p after the company announced an annualised H2 customer growth rate of 20% is expected to continue in FY23. The company said profits are expected to be in line with forecasts.
Inchcape shares rose 5.2% to 1,002p as the automotive retailer and distributor said revenue climbed 13% organically YoY in the first quarter of 2022. The group expects a 25% rise in pretax profit to £300m in 2022 on a Russia-adjusted basis.
Spectris shares increased 4.5% to 2,789p after the company announced a “strong” start to 2022 where trading and order book provides momentum for the full-year in its Q1 trading update. The group said organic sales growth was up 12% and order intake strengthened by 29%.
Hays share price gained 3.7% to 121p as the company announced that today it will launch a share buyback programme to purchase up to £75m of ordinary shares of 1p and is expected to commence on 29 April 2022.
Synthomer shares increased 3.4% to 295p following the announcement of the group’s FY expectations remaining unchanged in its Q1 trading update. It also addressed that NBR margins and volumes continue to stabilise in line with expectations as high inventory levels of medical gloves and reduced demand due to the easing of the COVID 19 pandemic take place.
888 Holdings said revenue declined 18% to $224m in the first quarter, with the gambling firm’s exit from the Netherlands hitting monthly punter numbers. 888 said average monthly active users fell 8% yearly “reflecting the temporary exit from the Netherlands” and the timing of any licence award in the Netherlands “remains unclear”. However, 888 Holdings’ shares rose 3% to 190p.
Weir Group shares fell 5.6% to 1,519p when the group said that the loss of sales from Russia in 2022 is expected to have an impact on the group’s underlying operating profit of up to £20m. However, Jon Stanton said, “the group has had an excellent start to the year”, as Weir’s aftermarket saw strong demands with orders up 28% and 3% sequentially.
AIM
Simec Atlantis Energy shares soared 23% to 2.85p following the company’s announcement of the transition of the Uskmouth site into a sustainable energy park. The group said the Uskmouth site has a 230MW grid connection along with substantial land and infrastructure that make it a prime location for the delivery of a “large-scale, commercially attractive, BESS facility”.
Empyrean Energy shares leapt 18.4% to 3p as shares rebounded from the 77% plunge on Wednesday after the group announced that the Jade prospect reached final total depth but logging indicated no oil pay in the target reservoir in offshore China.
Angle shares jumped 12.6% to 102p after the company group reported a £0.2m increase in revenue and a £3.2m increase in cash and cash equivalents. The liquid biopsy company said that its Prostate cancer study design was completed and it began discussions with a major group of United States urology clinics to partner in the study and provide access to a patient base for the group.
Corcel shares gained 9% to 1.47p as the natural resource exploration company signed a Heads of Terms with a UK investment fund to fund its current and future UK energy storage and generation projects.
Hurricane Energy reported its full-year results in which the company generated revenues of $240.5m from seven liftings of Lancaster crude compared to $180.1m from 12 liftings in 2021 which lead the group’s shares to rise 7% to 9.9p.
Hurricane Energy noted a profit after tax of $18.2m compared to a loss after tax of $625.3m in 2021.
Live Company shares tanked 10.2% to 11p despite the company announcing a new contract for Bricklive Paddington with Paddington Now BID which will be based in Norfolk Square Gardens, London from July 23 to July 31.
Empire Metal shares sunk 9% to 2p after the group announced that its placing to raise £1.7m to accelerate exploration at the group’s Eclipse and Gindalbie Projects.
BP Exploration Operating Co, a subsidiary of oil company BP sold its 5% stake in Serica Energy sending Serica’s shares to fall 7.7% to 362p. The group raised £49.3m by selling 13.5m shares in Serica at a price of 365p and Serica will not receive any of the proceeds.
Oilex shares dropped 3.8% to 0.19p as the group said in its quarterly report that it has received permits from the Gujurat state government to commence production at its Cambay Fields, however, the process took too long and resulted in no production from the region as the group waited to recommence operations.
The FTSE 100 was up convincingly on Thursday after a range of top companies boosted the index with a raft of glowing results.
However, rising inflation cast a pall over a slate of boosted profits and rising revenues, and Sainsbury’s warned of a tough year ahead as customers cut down on grocery spending and name brand supermarket products.
Meanwhile, tech stocks in America surged on the back of good news from Meta, which saw an uptick in Facebook users and sent shares upwards in morning trading.
“If you were looking for candidate to come to the tech sector’s rescue it might not have been Meta Platforms given its reputation has taken a real battering of late,” said AJ Bell investment director Russ Mould.
“Apparently though, expectations for the company behind Facebook, Instagram and Whatsapp were pitched at such a level that merely doing OK was enough to send the shares surging higher.”
Standard Chartered shares were up 16.5% to 558.9p following a 6% year-on-year increase in Q1 2022 pre-tax profits to $1.5 billion against $1.4 billion, alongside an increased guidance slightly ahead of its previous estimate of 5-7% for the year.
“Our first quarter performance was strong despite the volatile macro environment,” said Standard Chartered CEO Bill Winters.
“Our profit before tax grew 4% year on year, with strong underlying business momentum.”
Whitbread shares gained 3.9% to 28,645p after the company announced its swing back to a £472.6 million profit compared to a £194.9 million loss in 2020 and the reinstatement of dividends payouts to shareholders.
“With [dividends] back on the table, it sends a clear message to markets that sentiment is vastly improved and the return to profitability plus beat on top and bottom-line estimates adds weight,” said Hargreaves Lansdown equity analyst Matt Britzman.
However, the company warned of rising cost inflation in the range of 8-9%, and said it would be raising prices, growing its estate and slashing group costs to mitigate inflation hurdles.
Barclays shares enjoyed a rise of 2.5% to 145.5p after the financial institution reported a 10% rise to £6.5 billion in group income for Q1 2022, however the firm suffered a £540 million conduct charge following the over-issuance of securities in the US in March, resulting in the second suspension of its $1 billion share buyback programme.
“If it hadn’t been for a monumental mess of its own making Barclays could have been really riding high off the back of its first quarter showing,” said Russ Mould.
“Underlying performance was way better than expected … However, when you take a more than half a billion-pound hit over a clerical error relating to structured products it rather detracts from this positive picture.”
“Particularly when it means a previously planned programme of buying back shares must be shelved.”
Smith and Nephew shares were up 2.9% to 13,055p after the medical devices group reported a 3.3% boost in revenue to $1.31 billion compared to $1.26 billion the previous year.
“Sports Medicine & ENT and Advanced Wound Management continued to deliver strong growth and Orthopaedics produced an improved performance as elective procedure volumes rebounded across our segments,” said Smith and Nephew CEO Depak Nath.
Sainsbury’s shares suffered a fall of 3% to 231.7p despite the company’s swing to a pre-tax profit of £854 million in 2021 from a pre-tax loss of £164 million in 2020.
The supermarket’s stock declined in light of the Big 4 grocer’s stark warnings of lower profits as accelerating inflation and cost of living pressures impacted disposable income, projecting a pre-tax profit fall up to 14% to £630-£690 million in the next financial year.
“The year ahead will be impacted by significant external pressures and uncertainties, including higher operating cost inflation and cost of living pressures impacting customers’ disposable incomes,” said the company in a statement.
Unilever announced that its facing inflationary pressure resulting in the group predicting that costs will be higher than expected in H2 2022 and may hamper annual margins on Thursday.
Beauty & Personal Care’s underlying sales increased 7.1% to €5.7bn, with 7.4% from price and offset by 0.3% from volume as Unilever continued strong growth in Prestige Beauty and vitamins, minerals, and supplements.
Deodorants grew by double digits, thanks to Dove and Rexona’s technology-driven developments, as well as Axe’s excellent start to the year. Skin cleaning saw double-digit growth, with Dove, Lux, and Lifebuoy leading the way, although volumes fell in a shrinking market.
When the health and beauty channel reopened, Prestige Beauty enjoyed another quarter of double-digit growth, on top of a very strong prior year comparative.
Hourglass and Living Proof had a solid start to the year, helped by a rebound in the luxury hair and make-up segments.
Home Care
In the wake of a very strong prior year comparative, market volumes are decreasing which impacted Unilever’s Home Care division’s where underlying sales rose 9.2% to €3bn, with 12.5% from price, however, it was offset by 2.9% from the volume,
Fabric cleaning had a good start to the year, with double-digit, price-driven growth in most regions and very minor volume declines.
In India, OMO continued to lead the liquids industry, while novel forms such as capsules saw considerable growth in both China and Europe.
Fabric enhancers grew in the low single digits, boosted by a strong start to the year in India, China, and Turkey, but hampered by reductions in the United Kingdom and Southeast Asia.
With a strong prior year comparative, home and hygiene witnessed a modest increase, with high pricing being offset by negative volumes.
Foods & Refreshment
Foods & Refreshment underlying sales grew 6.5% to €5.1bn, with 7.1% from price and (0.6)% from volume said Unilever.
In all key geographies, Foods produced high single-digit growth with strong pricing. Hellmann’s grew by double digits against a solid baseline in the previous two years, thanks to a successful “Superbowl” marketing.
In the first quarter, ice cream sales grew by double digits in the out-of-home channel, while in-home sales fell marginally. The loosening of limitations in Europe and the sell-in ahead of an expected greater ice cream season, as well as a solid performance in China, boosted out-of-home sales. Magnum’s strong growth momentum was aided by the introduction of its fundamental “Remix” innovation, a spin on the iconic Magnum stick.
Performance by Geography
With volumes slightly negative, emerging markets climbed by 9.5% to €8.3bn, with a 10.1% contribution from pricing whereas developed markets rose 4.1% to €5.5bn and a 5.7% contribution from pricing.
Latin America’s pricing was particularly strong, at 16.4%, despite a 5.7% drop in volume. Developed markets climbed by 4.1%, with prices up 5.7% and volume down 1.5%.
The Americas sales increased by 9% to €4.5bn due to price and volume increases, while European sales increased by 0.7% to €2.7bn due to price gains offset by volume declines and Asis sales rose 9.1% to €6.6bn in the first quarter for Unilever.
Outlook
Input cost inflation is expected to be roughly €2.1bn in the first half of 2022, but the commencement of the war in Ukraine and the resulting increase in raw material inflation has elevated Unilever’s cost prediction for the second half.
As a result of this unprecedented period of inflation, the group will have to take additional pricing action, which will have an impact on volume.
In 2022, Unilever expects underlying sales growth to be in the upper half of the previously advised range of 4.5% to 6.5%.
For the first half, Unilever estimates the underlying operating margin to be in the 16% to 17% range that the group had forecasted for 2022.
Unilever presently expects the full-year underlying operating margin to be at the lower end of that range as a result of the expected rise in costs in the second half as costs are unknown and volatile.
Russ Mould, Investment Director, AJ Bell said, “The true definition of a company with pricing power is one which can push up its selling prices without dampening demand. Unilever has managed the first bit but not the second. Each of its three core divisions has seen a drop in sales volumes in its first quarter as a result of raising prices.”
“While Unilever talks about another solid quarter of sales growth, pressure on costs means its profit margins aren’t suddenly going to fatten up because people are paying more for a jar of Marmite or a box of Magnum ice creams. In fact, it is guiding for operating margins to be at the bottom end of its previously guided range.”
“In the UK, consumers are starting to trade down to supermarkets’ own-label products because they are cheaper. That presents a real threat to Unilever’s earnings in the near-term if people shun its higher priced items. There is a risk this trend spreads to other geographies.”
“The inflationary pressures have taken the spotlight off chief executive Alan Jope for a while, but a resumption of normal trading conditions will inevitably revitalise the debate over whether he is the right man to keep running the business, given poor returns for shareholders under his leadership.”
Whitbread shares were up 2.5% to 2,827p in early morning trading on Thursday, after the company announced a swing back to profit of £472.6 million, following a loss of £194.9 million after heavy lockdown restrictions last year crippled the group’s revenues.
The firm’s revenues increased to £1.7 billion from £589 million in 2020, beating analyst expectations despite its 17.8% decline on pre-Covid-19 levels.
“Investors will be pleased to see the dividend return for the Premier Inn owner, following a period of suspension where flexibility offered by lenders meant distribution taps had to turn off,” said Hargreaves Lansdown equity analyst Matt Britzman.
“With it back on the table, it sends a clear message to markets that sentiment is vastly improved and the return to profitability plus beat on top and bottom-line estimates adds weight.”
However, Whitbread confirmed its EBITDA remained 37.2% down against pre-pandemic levels.
The treatment was developed for adults with generalised myasthenia gravis (gMG), and is reportedly the first long-acting C5 complement inhibitor to demonstrate clinical improvement in patients with the disease.
What is gMG?
gMG is a rare and debilitating chronic, autoimmune and neuromuscular disease which leads to loss of muscle function and severe weakness in patients.
The disease operates by activating the complement cascade in the immune system in an uncontrollable manner, leading the body to attack healthy cells in the system.
An estimated 90,000 patients in the US currently suffer from the condition.
Ultomiris clinical trial
The FDA reportedly approved the treatment based on positive results from the pharmaceutical group’s CHAMPION-MG phase three trial, in which Ultomiris displayed superior results to the placebo in the company’s Myasthenia Gravis-Activities of Daily Living Profile (MG-ADL) total score at week 26.
The MG-ADL is a patient-reported scale which assessed the ability of patients to perform daily activities during the trial.
Ultomiris is administered to patients intravenously once per eight weeks in adult patients, after a loading dose.
AstraZeneca commented that the most common adverse reactions in participants were upper respiratory tract infection and diarrhoea.
The results from the CHAMPION-MG trial were published in the NEJM Evidence journal and presented at the American Academy of Neurology Annual Meeting in April 2022.
The European Union and Japan are reportedly considering submissions by AstraZeneca for the treatment, along with a selection of other health authorities.
“gMG takes a physical and emotional toll on those living with the disease,” said Myasthenia Gravis Foundation of America CEO Samantha Masterson.
“We are grateful for continued innovation and research into new treatment and dosing options to meet the needs of more patients and reduce the treatment burden.”
“With the approval of Ultomiris, we’re excited that MG patients now have another option to consider as part of their personalised treatment strategies that may offer more convenience and improve muscle weakness.”
Standard Chartered’s net interest income rose 8% to $1.79bn from $1.66bn, while other income was 10% higher at $2.5bn from $2.28bn in the first quarter of 2022 compared to the first quarter of 2021 as a result of rising interest rates and increased hedging balances within Treasury
Standard Chartered reported a 9% rise in its statutory operating income which rose from $3.94bn to $4.29bn in Q1 2022 and the group’s cost to income ratio decreased from 64.2% to 62.1%.
The driver behind the rise in operating income was a “record Financial Markets performance” and the expansion in the net interest margin which was partly offset by lower Wealth Management income.
The company recorded a higher credit impairment from $17m to $200m in line with the charges in the prior quarter, indicating that the bank has begun to build credit reserves once again in 2022.
The impact of a $104m reduction in management overlays, largely linked to COVID-19, was reflected in an $81m release in Stage 1 and 2 impairments.
A $281m charge was incurred due to the impairment of Stage 3 assets, which included a $107m effect from a sovereign rating downgrade of Sri Lanka to stage 3, as well as a $160m charge on China Commercial Real Estate exposures.
The bank recorded a pretax profit of $1.49bn, up 6% from $1.41bn in Q1 2021, where profit from associates and joint ventures contributed $68m due to increased profits at China Bohai Bank.
The group’s profit attributable to ordinary shareholders increased 3% from $1.02bn to $1.05bn in the bank’s first-quarter results.
Standard Chartered’s loans and advances to the customer were reported to be $296bn from $292bn seeing a 1% increase from 2021.
The bank’s adjusted net interest margin jumped 7bps to 1.29% from 1.22% and its liquidity coverage ratio fell 10bps from 150 to 140 in Q1 2022.
Standard Chartered’s NAV per share rose $0.27 to $14.60 and tangible NAV increased by $0.06 to $12.76 in the first quarter.
The group’s ended March 31 with a CET1 ratio of 13.9%, slipping from 14.0%, and RWA declined by $10m to $261bn, however, EPS increased 4% to $0.34.
Operating Income by Product
Transaction Banking income increased 4% to $740m with Trade and Working Capital generating $363m followed by Cash Management which generated $378m as they were partly offset by margin compression for Standard Chartered.
Financial Markets income increased 32% to $1.72bn with Macro Trading seeing a 40% rise as the group’s Commodity income more than doubled due to volatility in energy prices, and FX and Rates income also saw double-digit growth due to the increased client flows.
Standard Chartered’s Credit Markets income rose 7% to $460m with a 17% rise in Financing Solutions & Issuance which was offset by the 16% decrease in Credit Trading due to being negatively impacted by widening credit spreads.
Due to decreased Aviation Finance income for Standard Chartered, Structured Finance income fell 6%, but Financing & Security Services income rose 35%, including $94m in gains on mark-to-market liabilities, which are likely to reverse once funding spreads normalise.
Standard Chartered reported an income decrease of 16% to $146m in its Lending and Portfolio Management income as RWA optimisation actions led to loan sale losses and lower balances in Q1.
As market circumstances got more volatile, transaction volumes decreased, and the impact of COVID-19 restrictions, particularly in Hong Kong and China, resulted in several branch closures, affecting face-to-face sales, the group’s Wealth Management income fell 18% to $530m in the first quarter of 2022.
Standard Chartered’s Retail Products income was flat at $849m with Deposit income rising 6% due to higher margins, increased volumes and improved liability mix and Mortgages & Auto income grew 3%. The lower fee income in Hong Kong led to a 5% fall in Credit Cards and Personal Loans income.
The group’s Treasury income rose 23% as net interest income more than doubled due to an increase in hedged balances and an increased return on assets as interest rates rose in several markets, however, it was partly offset by a $68m reduction in realisation gains.
Operating Income by Region
Asia profits fell 26%, owing to a $227m increase in credit impairments and a 6% increase in expenses, however, profits in Africa and the Middle East climbed by 59% as revenue increased by 12% said Standard Chartered.
Due to robust Financial Markets and Treasury performance, earnings in Europe and the Americas more than quadrupled, with income up 56%.
Central & other regions lost $221m due to greater expenses and a non-repeat of the prior year’s other impairment linked to the aviation leasing portfolio.
The previously guided 5-7% range for income growth is projected to be somewhat exceeded.
Due to the sheer impact of greater income growth projections on performance-related pay, operating expenses are estimated to be somewhat higher than the previously guided $10.7bn and the group continues to expect positive income-to-cost jaws.
Credit impairment is likely to begin to normalise towards the 30-35 basis point medium-term loan-loss rate range said Standard Chartered.
The group wants to operate dynamically within the CET1 target range of 13-14% and expects to achieve a 10% return on tangible equity by 2024, if not sooner.
Bill Winters, Group Chief Executive, Standard Chartered said, “Our first quarter performance was strong despite the volatile macro environment.”
“Our profit before tax grew 4% year on year, with strong underlying business momentum. I am also pleased by the early progress we have made against the five strategic actions we outlined in February and we are on track to deliver 10% return on tangible equity by 2024, if not earlier.”
Barclays shares were up 1.4% to 143.9p in early morning trading on Thursday, after the company reported a 10% rise to £6.5 billion in group income in Q1 2022.
The financial institution announced a pre-tax profit of £2.2 billion and a return on tangible equity of 11.5% over the past quarter.
The banking firm also mentioned a cost-to-income ratio of 63% and a CET1 ratio of 13.8%, alongside a tangible net asset value per share of 294p, compared to 291p in Q1 2021.
The company noted total operating costs of £4.1 billion, compared to £3.6 billion in Q1 2021, which encompassed litigation and conduct charges of £500 million linked to the over-issuance of securities by the institution in the US, alongside customer remediation costs due to a legacy loan portfolio.
“A strong Q1 performance demonstrated Barclays’ ability to deliver broad-based income growth across all operating businesses,” said Barclays Group CEO C.S. Venkatakrishnan.
“Group income was up 10% to £6.5bn, alongside profit before tax of £2.2bn and a RoTE of 11.5%.”
“Our performance includes the relevant costs relating to the over-issuance of securities in the US and customer remediation of a legacy loan portfolio.”
Barclays noted robust UK mortgage lending, strong UK and US consumer spending and payments volumes and tailwind from rising rates as contributing factors to the bank’s recovery in its consumer and payments business.
The company added that it enjoyed a strong CIB income as a result of strong FICC and equities performance with increased rates of activity as the financial group supported its clients throughout the market volatility of the past few months, sufficiently offsetting weaker investment banking fees as a consequence of a reduced fee pool.
The banking group confirmed credit impairment charges of £100 million, driven by low delinquencies and a benign credit environment, along with unsecured lending provision levels at an appropriate level in consideration of inflationary headwinds.
“Our income growth was driven partly by Global Markets, which has been helping clients navigate ongoing market volatility caused by geopolitical and economic challenges including the devastating war in Ukraine, and by the impact of higher interest rates in the US and UK,” said Venkatakrishnan.
Barclays confirmed its target of a return on tangible equity over 10% during 2022, along with a total operating cost estimate of £15 billion and an expected impairment charge below pre-pandemic levels due to reduced unsecured lending balances and appropriate coverage ratios.
The banking company added that it would continue to target a CET1 ratio between 13-14%
The firm also said it would suspend its planned £1 billion share buyback scheme for a second time as a result of the over-issuance of US securities announced on 28 March 2022, with the company clarifying that it aimed to reinstate the buyback programme as soon as possible.
“We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs,” said Venkatakrishnan.
“We will support them through this difficult period wherever we can, and support the wider economy just as we did through the COVID-19 pandemic.”
Primary Health Properties announced its Q1 2022 Trading Update on Wednesday where the company addressed its Net Zero Carbon Framework and its increase in rental income from its robust pipeline.
Primary Health Properties made significant progress in turning the year-end pipeline into committed agreements, and it has already announced the £34.5m purchase of a huge, state-of-the-art diagnostic centre in Chiswick, rented to HCA Healthcare, and the £6.95m purchase of a clinical facility in Chertsey, rented to the NHS.
The project will be one of the first NZC healthcare facilities in the UK, and it highlights its strategic commitment to converting all of its operational, development, and asset management activities to NZC by 2030, as well as assisting its tenants in achieving NZC by 2040.
Primary Health Properties continue to build and grow a robust pipeline totalling £360m in the UK and £122m in Ireland, including standing investments, direct and forward funded developments, and asset management projects, with £65m and £74m in legal due diligence, respectively.
With £0.8 million in increased rental income from the rent review and asset management efforts in the first quarter of 2022, Primary Health Properties generated an additional £0.9m, or 0.6%, compared to the first quarter of 2021.
The group continues to see an increase in rent review growth, with an additional £0.6m in revenue earned in the first quarter from 99 settled reviews, equivalent to 2.0% on an annualised basis, compared to £0.5m and 1.7% in Q1 2021.
Primary Health Properties’ asset management activities generated a further £0.3m in the quarter, the same as in 2021, with the completion of ten projects, and the six schemes on-site that, in addition to extending lease lengths, will improve the environmental performance of the buildings.
The group’s net debt was £1.21bn at the end of March 2022, up from £1.19bn the previous quarter, and the Loan to Value ratio was 43.3% on a proforma basis, compared to 42.9%.
Following capital commitments, Primary Health Properties has £270m in undrawn borrowing facilities and cash on deposit, giving significant liquidity headroom.
For a weighted average period of slightly over nine years, 97% of the group’s net debt is fixed or hedged, offering significant protection from rising interest rates.
Primary Health Properties announced its second quarterly interim dividend of 1.625p per Ordinary Share on March 24, 2022, payable to shareholders on May 20, 2022.
The payout will be fully made up of regular dividends. On an annualised basis, the dividend is equal to 6.5p, a 4.8% increase over the 6.2p given in 2021.
The company aims to keep paying a progressive dividend in equal quarterly instalments, which will be funded by underlying earnings in each fiscal year. In August and November 2022, more dividend payments are expected for Primary Health Properties.
Harry Hyman, CEO of Primary Health Properties, said, “The first quarter of 2022 has seen a good start to the year for PHP good progress converting our year-end pipeline into committed deals along with stronger organic like-for-like rental growth across our rent review and asset management activities, including the environmental upgrades that are required to meet our sustainability targets.”
“We expect to benefit from the current inflationary environment with an improving rental growth outlook and with the majority of our debt fixed or hedged we expect to remain in a very strong and robust position in the current volatile economic environment.”
“In a capital constrained NHS, the access to capital that our business can bring can assist with the increased utilisation of primary care in order to relieve the pressures being placed on healthcare systems, hospitals and A&E departments from demographic drivers and the backlog of procedures missed over the last couple of years following the COVID-19 pandemic. We are proud of the role we play and look forward to continuing to expand our business in the interest of the NHS and all of our stakeholders.”
Primary Health Properties shares fell 0.1% to 147p in closing trade on Wednesday.
Tritax Eurobox and Nordic developer MIGS acquire 95,000sqm of development land for €21.4m in Malmo and set out to create Tritax’s first speculative development project announced the company on Wednesday.
Tritax EuroBox is a REIT which invests in high-quality, premium logistics real estate across continental Europe. It has engaged in a speculative development project with established Nordic developer MIGS to acquire 95,000sqm of development land for €21.4m.
The project is a brownfield redevelopment prospect in a key Swedish logistics market, the Fosie industrial area south of Malmo, where development land is scarce.
Given its location between Malmo’s two major ring roads, which provide good linkages to the rest of Sweden and Denmark, demand from tenants and occupants in this highly sought-after neighbourhood is significant.
The current occupant, Atria Firm, a renowned Scandinavian food manufacturing group, is selling the property.
Until their planned relocation in February 2024, Atria Group will continue to use the existing site and pay a rent of €1.25m per year. This will allow for the site’s reconstruction to begin, with a completion date of early 2025.
Nearly 60,700sqm of prime logistics space will be built on the 95,000sqm property, with an annual rental value of over €4.4m.
The existing asset is valued at €21.4m, with a building cost of €65.3m predicted in the future. The initiative is expected to be worth more than €115m when completed.
The goal of this sustainable development is to offset carbon emissions during construction, with the finished building aiming for a BREEAM Very Good accreditation.
During the planning and permitting phases, this deal allows the company to capture future development earnings while also providing an excellent income yield.
“We are delighted to be announcing our first development project, located in one of the most sought after logistics markets in the Nordics. This exemplifies our strategic aim in building up a portfolio of high quality, sustainable logistics assets in prime markets, through partnering with local development specialists such as MIGS, adopting a disciplined approach to development and allowing the Company to access development profits,” said Alina Iorgulescu, Assistant Fund Manager of Tritax EuroBox.
“This is our first off-market deal with MIGS and we are looking forward to developing our relationship with them on future projects.”
“This is the fourth Swedish investment for Tritax EuroBox, bringing our total amount invested in the country to over SEK 1.4 billion. The powerful structural trends in the Swedish market find demand outstripping supply, providing us with long-term embedded value. We see significant potential in this site in southern Malmö, which is experiencing significant demand from occupiers, while available land remains highly constrained.”
