Palace Capital (PCA)

Business description

Palace Capital is an AIM-quoted property investment company focused on commercial real estate in the UK outside London. The portfolio is diverse, with the largest weighting in offices. Management aims to increase capital value and provide a sustainable and growing income stream.

Investment summary

Palace has completed its move to the premium segment of the Official List of the LSE. The move should raise the company’s profile and broaden its appeal to a wider investor base. The move has the potential to enhance trading liquidity in the shares, which offer a highly attractive dividend (now paid quarterly) and material discount to NAV. Since interims, Palace has continued to dispose of non-core assets, and refinance its debt facilities, extended the average maturity to 4.7 years and aggregate facilities to £115.4m, and more recently increasing its swap facilities such that rates are now fixed on 70% of the facility. A number of key asset management initiatives are yet to be reflected in our forecasts, including from October’s £68.0m RT Warren portfolio acquisition, and at Hudson House in York, where planning permission exists for a significant mixed-use development, demolition has commenced.

Last updated on 06/04/2018

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 14.6 10.9 5.6 18.9 17.5 N/A
2017A 14.3 9.3 6.7 22.2 14.9 N/A
2018E 16.1 11.2 8.2 19.8 16.7 N/A
2019E 18.9 14.5 11.1 20.6 16.0 N/A

Last updated on 27/03/2018

Latest video

Executive interview - Palace Capital

Industry outlook

Regional occupier demand is generally firm, driven by continuing economic growth and business relocation away from London, while new supply remains limited. Meanwhile, the yield spread between the regions and London remains historically wide, representing a clear potential for narrowing.

Last updated on 06/04/2018

Key management

Neil Sinclair, CEO
Stephen Silvester, CFO

Company address

One George Yard
London
EC3V 9DF
United Kingdom
+44 (0)20 3301 8335
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