Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) said the new financial year has begun as planned and that it has various mechanisms in place to protect against inflation.
The operator of business and industrial parks in Germany and the UK issued a preview of the speech that its chairman, Daniel Kitchen, will give at its annual shareholder meeting later today.
He will note that following a year that delivered a 20% total accounting return and a 16.1% increase in dividend for shareholders, the new financial year has “begun as planned despite the ongoing economic uncertainty and inflationary environment prevalent in both our markets and across Europe, and we continue to trade in line with expectations”.
On inflation, Kitchen will say “a combination of forward purchase agreements, volume-based discounts, and the use of selected suppliers continue to act as effective mitigants and provide us with a competitive advantage”, while a large percentage of tenancy agreements include inflation indexations gives confidence in the company’s ability “to generate further increases in average rental rates in the coming financial year”.
With leverage increased to 41.6% as at 31 March, Kitchen’s statement asserted that the company “remains committed” to targeting a net loan-to-value of below 40% through a combination of income-led capital growth, transformative capital investment and selective asset recycling.
As well as the announced sale of a Camberwell property in London this month, he said other assets recycling opportunities are currently being examined in the UK and Germany.