LondonMetric ups divi as M&A drives solid profit growth

(Sharecast News) - FTSE 250-listed real estate investment trust LondonMetric saw profits and rental income both rise by more than 20% in the year to 31 March, helping the company to increase its dividend by 7.4%. Net rental income totalled £177.1m, up from £146.8m the year before, while net contracted rent more than doubled to £340m from £145m as a result of merger activity, with the group having merged with LXi REIT and acquired CP Property Trust during the period.

The value of LondonMetric's portfolio expanded to £6.0bn, from £3.0bn the year before, with the LXi merger adding £2.9bn and £0.3bn adding through the CTPT bolt-on. Net tangible assets increased to £3.91bn, up fro £1.96bn previously.

"This has been a transformational period for our company with the successful execution of two M&A transactions. We have doubled the size of our portfolio to £6 billion, creating the UK's leading triple net lease REIT and the third largest UK REIT by market capitalisation," said chief executive Andrew Jones.

Total earnings rose to £121.6m from £101.1m previously while the cost ratio - operating costs as a percentage of gross rental income - remained more or less stable at 11.6%.

The company declared a fourth-quarter dividend of 3.0p per share, taking the full-year dividend to 10.2p, up from 9.5p the year before, which was 107% covered by earnings.

Jones said the company's "material earnings growth [...] gives us confidence to increase our Q1 dividend for FY 2025 by 19%".

In a separate statement, LondonMetric announced it had sold £37m of former LXi office assets - one in Dundee let to BT and one in Glasgow let to STV - and a £0.5m care home in the West Midlands. The company has now offloaded £55.4m of non-core LXi assets at an average of 7% above prevailing book values.

The stock was up 0.2% at 208.4p by 0839 BST.