Logistics properties investor Urban Logistics REIT (LON: SHED) is internalising its management by acquiring the current asset manager Logistics Asset Management for an initial consideration of £6.8m in shares. This will reduce annual costs by £1.4m and enhance earnings.
Contingent consideration will be up to £5.6m and depends on the average closing share price for three months prior to the first anniversary of the acquisition. There will be 20% vesting if the price is 130p and this increases on a straight line basis with 100% vesting at 158p. The share issue would be based on a share price of 114.3p. The current share price is 115.4p, down 0.52%. The share price has risen 12.7% so far this year.
The company will consult with shareholders. A circular will be published, and the deal should be completed in the second quarter.
If full consideration is paid there will be a 1.28% increase in number of shares. The cost saving should add more than 3% to profit, so there is a net improvement in earnings per share. Panmure Liberum currently forecasts earnings of 7.8p/share in the year to March 2026. The NAV forecast is 160p/share at the end of March 2026. The dividend is forecast at 7.6p/share, which is a forecast yield of 6.6%.