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Circle Property hikes dividend 12.5% and sees 'clear prospect' of further growth

The regional property developer lifted the total annual dividend 12.5% to 6.3p
Circle's office portfolio is centred around Birmingham, Milton Keynes and Bristol

Circle Property PLC (LON:CRC) has grown the value of its assets by more than 20% for the third successive year and sees a “clear prospect of further growth” from regional office property in coming years.

Net asset value per share stood at 277p at the end of March, up 20.4% over the previous 12 months.

WATCH: Circle Property delivers another year of 'market leading' NAV growth

With the total dividend lifted by 12.5% to 6.3p, Circle is the best performing quoted UK real estate company based on NAV total return, which combines NAV growth and dividend, rising 86% since its initial public offering in 2016 in absolute terms.

The property developer, which holds more than three quarters of its office portfolio in Milton Keynes, Bristol and Birmingham, increased contracted annual rental income 12% to £7.1mln in the year.

This rose to £7.6mln as Circle successfully exited the retail sector, with the sales of two shops and a retail warehouse park at marginally above valuation, and post-year-end secured a further £0.34mln of contracted rent.

Operating profit for the year was £3.7mln before gains on investment properties, with profit before tax up 8.97% to £15.25mln thanks to a £12.6mln uplift in the valuation of investment properties, leading to earnings per share rising by 4% to 53p.

Circle's management, led by chief executive John Arnold, are continuing to explore opportunities to grow the company, including using a £100mln new financing facility to make acquisitions, capturing the reversionary potential in the portfolio and leasing remaining space from newly refurbished assets.

“We continue to outperform with our focus on the regional office market which continues to yield higher total returns despite current market uncertainty,” he said.

“We are confident of our ability to offer investors impressive NAV growth, increasing dividends and income growth potential, as well as generating attractive market leading returns to our investors.”

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June 20 2019
“We believe that our NAV forecasts are conservative and the shares are significantly under-valued given the company’s track record and growth prospects.”

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