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Town Centre Securities (TOWN)

Business description

Town Centre Securities is a UK REIT focused primarily on Leeds, Manchester, Scotland and (mainly suburban) London. It also has a car parking operation (CitiPark). The investment portfolio is intensively managed for income and capital growth.

Stock data

Market cap.£120.2m
Last close226.00p
High / Low (52 weeks)296.0p / 226.0p
Stock market listingLN
Forecast net debt (£m)180.9
Forecast gearing ratio (%)89

Price performance

Relative *(5.5)(5.5)(14.9)

* % Relative to local index

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Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 19.4 N/A 7.0 13.2 17.1 8.9
2018A 19.3 N/A 6.9 13.0 17.4 6.6
2019E 20.5 N/A 6.8 12.9 17.5 8.4
2020E 20.9 N/A 7.2 13.5 16.7 7.3

Last updated on 27/11/2018

Latest research

Investment summary

Strategic repositioning of the portfolio continued in FY18, further diversifying the portfolio (retail & leisure has fallen to 55% of the value from 70% two years ago), and enhancing an already strong development pipeline. Bank facilities were refinanced with extended maturity and greater flexibility, and the recent innovative refinancing of the jointly owned Merrion House development has increased cash resources and further improved LTV (to a pro forma c 45.3% in July). Strategic disposals dampened FY18 income, but the property return was strong (9.4%), supporting a 7.6% growth in EPRA NAV (384p per share) and an EPRA NAV total return of 10.0%.The increased DPS of 11.75p provides an attractive yield, fully covered by earnings. The more than 30% discount to NAV reflects investor concern over retailer stress. However, with the reduced retail exposure focused on convenience and discount formats in its ‘mall’ assets, TCS saw no material impact in FY18.

Last updated on 29/11/2018

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, and offers potential for further narrowing.

Last updated on 29/11/2018

Key management

Edward Ziff, Chairman & Chief Executive
Mark Dilley, Finance Director

Company address

Town Centre House, The Merrion Centre
United Kingdom
0113 222 1234
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