Picton Property Income (PCTN)
14/11/2025
Results analysis from Kepler Trust Intelligence
Picton Property Income's (PCTN) interim results to 30/09/2025 show a NAV total return of 3.4% and profits of 2.9 pence per share. The property portfolio total return was 3.2% compared to 2.7% for the MSCI UK Quarterly Property Index, extending by another six months PCTN's run of 12 consecutive years outperforming the index. Net assets were £528m at the period end (31/03/2025: £533m).
NAV per share increased 2% to 102p (31/03/2025: 100p). Dividends for the half year totalled 1.9p, with the quarterly dividend amount increased by 2.7% in May 2025. Cover was 106% (2024 FY: 114%). PCTN's discount stood at 23% at the period end, narrowing from 28% at 31/03/2025. The dividend yield at the current share price is 4.8%.
Kepler View
Perhaps understandably given the nature of interest rate moves and their consequences for property valuations and REIT share prices over the last three years, investors have perhaps not yet reacquainted themselves with the operating performance that PCTN has quietly delivered over this period, growing the covered dividend, eliminating short-term debt and undertaking a significant realignment of the portfolio, rotating out of lower yielding and potentially more problematic office assets and into higher-yielding industrial and logistics, now 68% of the portfolio. At the end of the period PCTN's estimated rental value was £10m higher than the total contracted rent and to put that into context, that's about 1.9 pence per share, which is equivalent to another 50% on top of the current annual dividend rate. Unlocking that potential is, of course, a multi-year process, but about half of the total is from vacancies including some significant industrial assets currently planned for refurbishment in a market where there is strong demand, so it's completely conceivable that a proportion of that overall ERV could be released over the next year or two. And ultimately what will unlock the discount will be dividend and NAV growth, both of which appear to be back on trend.
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