LondonMetric announces second interim dividend

LondonMetric has announced a second interim dividend after a busy third quarter as the property investor continues to adjust its portfolio towards retail logistics and distribution.

The FTSE 250 company will pay an interim dividend of 3.75p per share in early April, which will lift the full year dividend 3.6% on the previous year to 7.25p.

This equates to a yield of 4.5%.

During the weeks since 30 September, LondonMetric completed ££75.6m of investment activity, with £92.7m of disposals across the retail and leisure portfolio including £10.2m for an Odeon Multiplex Cinema in Preston and £29.5m for three retail parks at Camborne, Haverhill and Bristol.

It also made £31.2m of distribution acquisitions and a £18.2m distribution disposal.

The 70,000 sq ft of lettings completed since the end of September were and will bring in a further £0.9m of rent.

Rental income grew £0.9m per annum from lettings across 70,000 sq ft that were said to be "materially above" estimated rental value (ERV), as the total portfolio grew to £1.5bn with 99.6% occupancy and a 13 year weighted average unexpired lease term (WAULT).

"The UK retail market continues to undergo structural shifts and so our investment activity remains focused on those sectors that will be the key beneficiaries of these changes and which will also benefit from our active management approach," said chief executive Andrew Jones.

He added that retailer feedback from Christmas trading confirmed soaring online sales were having a profound impact on logistics and distribution requirements.

"Our focus on retailer distribution and convenience stores is perfectly in line with this change in shopping behaviour and has delivered material income growth which will allow us to progress the dividend with certainty."

Broker Peel Hunt said the dividend was as expected and its forecasts were unchanged.

"52% of the company is now distribution, we estimate this rises to circa 60% following the 2016 developments and we expect this to continue to rise. LTV now stands at 38%."