Unheralded AIM success

AIM is coming up to its 25th birthday and one of the unheralded stars of the early days of the junior market is Wynnstay Properties (LON: WSP). The property investor joined AIM on 21 September 1995 and there are only four companies that are still on AIM that floated earlier.

In fact, Wynnstay is the longest running company that has been continuously on AIM and has the same business. The total return over the past 24 years is 573%.

Silence Therapeutics (LON: SLN) was originally known as Stanford Rook and joined AIM on 19 July 1995. It spent a few years on the Main Market before returning to AIM, so it has not been on the market for the full 25 years.

The next longest running company is Universe (LON: UNG) and that was originally known as Card Clear. The business involved in payments technology was demerged as Retail Decisions and subsequently taken over.

The other two companies that floated before Wynnstay Properties were internet company Voss Net, which was transformed into mining company Bezant Resources ( LON: BZT), and recruitment firm Graduate Appointments, which was involved in the media sector before becoming cake maker Finsbury Food (LON: FIF).

The share prices of the four companies that joined AIM before Wynnstay Properties have performed poorly, particularly when compared with the property company.

Business

Wynnstay Properties’ history goes back to 1886 when it was focused on residential properties in Kensington. It currently owns office, commercial and industrial properties in southern England.

Dividends

More has been paid in dividends than the initial share price for Wynnstay Properties on AIM. The company has a record of growing its dividends prior to the latest one.

The total dividend for the year to the end of March 2019 was 19p share. The second interim dividend for 2019-20 is 7.5p a share, which makes last year’s total 15p a share. The first interim dividend of 7.5p a share was 7% higher than the previous year’s interim.

The latest payout goes ex-dividend on 18 June and the record date is 19 June – the 25th anniversary of AIM. The dividend will be paid on 17 July. The full year results are expected to be announced by the end of July.

Valuation

Wynnstay has received 70% of the expected rent for the first quarter of this financial year and it says that it will support tenants. Net debt was £11.6m at the end of September 2019

There was a £1.15m reduction in the value of the property portfolio to £34.3m at the end of last year. The NAV had been 830p a share at the end of September 2019. That revaluation would knock 5% off the NAV per share. A dividend has been paid since September but there may be retained profit to add on.

At 605p a share, the yield on the lower dividend is still nearly 2.5%. The discount to NAV could still be at least one-fifth.

Liquidity in the shares is limited (bid/offer spread is 580p/630p) and it may be difficult to buy them without pushing up the share price.

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Andrew Hore
Andrew Hore is the publisher of AIM Journal, which is an online monthly publication covering the Alternative Investment Market.