Paul Arenson. Picture: SUPPLIED
Paul Arenson. Picture: SUPPLIED

UK industrial landlord Stenprop, which is listed on the JSE, has reduced its full-year payout to shareholders after trimming its portfolio.

The group, which is moving towards being a pure-play industrial landlord, said its total dividend for the year to end-March was cut to 6.75p a share, from 8p the prior year. 

While the group bought 30 multi-let industrial estates in the year for £103.6m, it sold 23 properties for a combined £248.3m. As a result, its portfolio value declined by 16% to £612.9m.

Net rental income rose to £33.9m from £32.9m, although profit after tax fell to £23.8m from £39.4m.

“We are pleased with the progress that Stenprop has made in the past financial year,” said CEO Paul Arenson.

“Our dividend is in line with guidance and covered by property-related earnings. All of our milestones for the year have been met and we are well positioned to meet our target milestones for the financial year ending 31 March 2020,” Arenson said.

In the year to end-March 2020, the group planned to decrease its loan-to-value ratio to below 40%, from 44.2%.

It also aimed to increase the UK multi-let industrial component of its portfolio to at least 60% of the total portfolio, from 42.7%, and to 100% in the following two years.

Meanwhile, Stenprop said it was “warily” monitoring Brexit developments.

“We are confident that our multi-let industrial customer base is relatively Brexit-proof in that they are largely made up of local businesses across the country servicing their local communities,” it said. “In general, they are not the big single let occupiers reliant on import or export customers and suppliers.”

But Brexit could result in a contraction of the domestic economy, which would dent business activity.

“For now, we also have a good hedge on Brexit in that approximately 41% of our portfolio is still in Germany.”

Stanlib fund manager Ahmed Motara said Stenprop’s results were commendable given difficult operating conditions.

SA investors now had plenty of offshore property funds to choose from, meaning they did not have to buy into UK-focused stocks while Brexit uncertainty persisted, Motara said.

Stenprop’s shares had risen 1.4% to R21.50 by noon on Thursday.

hedleyn@businesslive.co.za