Atlantic Leaf grows dividend

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.

DISTRIBUTION GROWTH

“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.