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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.£115.4m
Last close217.00p
High / Low (52 weeks)296.0p / 206.0p
Stock market listingLN
Forecast net debt (£m)180.9
Forecast gearing ratio (%)89

Price performance

Relative *(6.4)(13.1)(19.8)

* % 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 16.4 8.5
2018A 19.3 N/A 6.9 13.0 16.7 6.4
2019E 20.5 N/A 6.8 12.9 16.8 8.1
2020E 20.9 N/A 7.2 13.5 16.1 7.0

Last updated on 29/01/2019

Investment summary

A trading update ahead of interim results on 26 February shows further progress with ongoing portfolio repositioning (retail and leisure assets have reduce to 52% from 70% in 2016), to increase income resilience and recycle capital to unlock the sizeable future growth and diversification opportunity in the development pipeline. H119 occupancy increased to 96% (FY18: 95%), with passing rent up 0.9% y-o-y on a l-f-l basis. We will review our estimates with the interims but expect that CVAs and insolvencies will have a modest negative near-term impact on income despite the majority of affected units already having been re-let at higher rents. The valuation impact is uncertain and sector-wide retail values have softened, particularly for secondary high street assets and shopping centres, while Brexit remains a more general cause of uncertainty. We estimate that based on market consensus data, softening yields may affect our forecast FY19e NAV per share by c 19p.

Last updated on 01/02/2019

Industry outlook

The supply demand balance for regional office and industrial property remains generally firm, and a positive yield spread between the regions and London offers potential for further narrowing. Parts of the retail sector are displaying clear signs of stress.

Last updated on 01/02/2019

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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