At­lantic Leaf grows div­i­dend

Business Day - - COMPANIES - Alis­tair An­der­son Prop­erty Writer an­der­sona@busi­

In­dus­trial prop­erty group At­lantic Leaf is gen­er­at­ing sta­ble re­turns in a com­pet­i­tive mar­ket, says CEO Paul Leaf-Wright.

Com­ment­ing on the com­pany’s fi­nan­cial re­sults for the six months to Au­gust, Leaf-Wright said At­lantic Leaf had achieved an in­terim dis­tri­bu­tion of 4.5p per share, com­pared with 4.2p for the match­ing pe­riod in 2016.

The com­pany had a total of £304m in as­sets un­der man­age­ment on Au­gust 31.

“These re­sults are re­flec­tive of the sta­ble en­vi­ron­ment in which we op­er­ate and the qual­ity of our as­sets, which re­main 100% oc­cu­pied with long leases, qual­ity ten­ants with strong covenants and which de­liver long-term cash flows,” said Leaf-Wright.

He said the com­pany had met or ex­ceeded key tar­gets to firmly es­tab­lish it­self as a prop­erty in­vest­ment com­pany in the UK mar­ket.


“This strong de­liv­ery on our growth ob­jec­tives un­der­pins our strat­egy to con­tinue to grow dis­tri­bu­tions to share­hold­ers on an an­nual ba­sis and based on cash flow earn­ings the com­pany has achieved,” he said.

At­lantic Leaf has been backed by a sig­nif­i­cant in­vestor in Vuk­ile Prop­erty Fund, which sees the com­pany as its spring­board into western Europe.

Vuk­ile is able to as­sist At­lantic Leaf with UK op­por­tu­ni­ties and other sup­port. At­lantic Leaf re­ported a net as­set value of £155.4m, or a net as­set value per share of £1.09, for the pe­riod un­der re­view.

The com­pany’s gear­ing was about 50% loan to value, and given the long-term na­ture of the leases it had in place, man­age­ment was com­fort­able with the loan-to-value level com­bined with the ben­e­fit of the over­all cost of debt of about 3.2% per an­num, said Leaf-Wright.

As much as 76% of At­lantic Leaf’s debt has been hedged with in­ter­est rate swaps to pro­tect against in­creases in in­ter­est rates. It earns a for­ward yield of 7.4% on its in­vest­ment prop­er­ties.

At­lantic Leaf raised £47m of new eq­uity through a well­sup­ported ac­cel­er­ated book build in Septem­ber and is­sued 46,305,419 new shares.

From the pro­ceeds of the cap­i­tal raised, the com­pany bought a 45% share in a port­fo­lio of 11 prop­er­ties ten­anted by DFS Trad­ing, at a cost of £24.8m, in­clud­ing ac­qui­si­tion costs.

“The balance of this cash is avail­able for in­vest­ment and our man­age­ment team is eval­u­at­ing op­por­tu­ni­ties and hope to de­cide what to do with the funds be­fore the end of the 2017 calendar year,” said Leaf-Wright.

Fol­low­ing the DFS ac­qui­si­tion, At­lantic Leaf re­vised its dis­tri­bu­tion guid­ance, ex­pect­ing to achieve full-year dis­tri­bu­tion of 9.1p per share, which would rep­re­sent a 7.1% in­crease over the pre­vi­ous year.

At­lantic Leaf is also eval­u­at­ing new op­por­tu­ni­ties for fur­ther ac­qui­si­tions to add to its grow­ing port­fo­lio.

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