Circle Property cautiously optimistic after resilient full-year performance

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Circle Property PLC (LON:CRC) has notched up the fourth successive year of growth in its net asset value (NAV).

The regional offices specialist revealed that its NAV per share rose by 3% to 285p at the end of March 2020 from 277p a year earlier, in its full-year results statement.

Rental income in the year rose to GBP7.50mln from GBP6.88mln the year before. Circle saw a 14.16% increase in contracted annual rental income to GBP8.71mln at the end of March from GBP7.61mln a year earlier.

The property company booked a GBP2.51mln gain on the revaluation of investment properties but this was down from a GBP12.61mln revaluation gain the previous year, which largely explains the decline in profit before tax to GBP5.16mln from GBP15.25mln.

The board has proposed a final dividend of 2p, taking the full-year payout to 5.3p.

As a specialist in office assets, the business has been affected by the lockdown restrictions imposed to slow down the spread of the coronavirus (COVID-19) but rent collection has held up well, with 91% of rental income collected in the January-March quarter and 87% collected in the April-June quarter.

The current economic uncertainty has reduced both investor and tenant confidence for commercial property more generally, putting rental levels and valuations under threat, albeit predominantly in the retail and leisure sectors where the group has little to no exposure, Circle said.

The company noted that 88.42% of its total portfolio is let and producing income.

“Our regional office assets have been individually selected by virtue of their strength of location and letting prospects which, alongside our active management expertise, has enabled Circle to deliver a very resilient performance during the year,” John Arnold, the chief executive officer of Circle Property said in the results statement.

“Our approach in providing flexible regional commercial workplaces means that we are cautiously optimistic about our future performance,” he added.

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