Two property sector dividend stars

As traders await news from the US central bank tonight, we run through today’s key company news.

The gulf in property sector fortunes during Covid-19 was back in focus today after warehouse specialist Segro (LSE:SGRO) revealed investors had lapped up its £680 million fundraising.

The placing of new shares at a 4% discount raised £30 million more than expected towards expanding Segro's portfolio of warehouse and industrial properties, which continue to be seen in the City as an attractive play on e-commerce disruption.

Segro shares have rallied sharply since the March market slump and started this week back within sight of October's multi-year high of 979.5p, helped by the payment of a dividend at the start of May. They were down 2% today at 843p after the placing and retail offer at 820p.

Sentiment is also weaker ahead of the Federal Reserve's latest policy decision tonight, with the FTSE 100 giving up early gains and trading little changed at lunchtime.

Source: TradingView. Past performance is not a guide to future performance.

LondonMetric Property (LSE:LMP) further highlighted the favourable trends in urban logistics when it revealed net rental income up 24% to £115.9 million in the year to 31 March. The FTSE 250 index real-estate investment trust said its “reliable, repetitive and growing income returns” underpinned its progressive dividend, which improved 1% to 8.3p in results today.

CEO Andrew Jones said Covid-19 had accelerated property trends that had been expected to take years to emerge but were now happening in months or even weeks. He added:

“As a result, real estate performances continue to polarise, with many distressed sectors being severely damaged whilst the winning sectors are likely to see a wider margin of victory.”

Source: TradingView. Past performance is not a guide to future performance.

In contrast, shares in West End landlord Shaftesbury (LSE:SHB) tumbled 5% after it cut the value of its portfolio by almost £300 million to £3.5 billion due to uncertainties caused by the pandemic. It said it aims to collect about 50% of rents due from April to September “over time”, having collected only 27.6% in its wholly-owned portfolio during the March quarter.

Segro joins a long list of companies who have tapped investors for funds to bolster balance sheets or ensure they have the firepower to seize on opportunities in a distressed market.

They include Premier Inn owner Whitbread (LSE:WTB), whose £980 million rights issue crossed the finishing line today with 91% take-up for its fully underwritten 1-for-2 offer of new shares.

Small-cap homewares business Portmeirion (LSE:PMP) also announced a £12 million fundraising today, with £10 million set to come from a new share placing at an issue price of not less than 375p a share. Up to a further £2 million will be raised through an open offer of shares.

The designer, manufacturer and worldwide distributor of homewares under the Portmeirion, Spode, Royal Worcester and Pimpernel brands has suffered a significant impact from Covid-19 lockdowns in key markets including the UK, US and South Korea.

The majority of the proceeds, however, will be used for accelerating its growth strategy amid favourable consumer trends towards home dining. Planned targets include online sales growth and next day delivery warehouse capacity, as well as a greater presence in Canada.

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Among other companies reporting today, Photo-Me International (LSE:PHTM) shares fell 5% to 54.2p after disclosing provisions of between £14 million and £18 million in forthcoming annual results.

As well as the lower carrying value of its machines, the figure reflects the need to restructure its UK operations after the Government said it would accept photos taken at home for passport identification - removing a significant part of Photo-Me's market share for ID photos.

Excluding the provisions, underlying profits are expected to be £28 million in the year to 30 April, compared with £42.6 million a year earlier. Photo ID via photobooths and children's rides account for two-thirds of group revenues.

Equipment rental business Vp (LSE:VP.), whose brands include Brandon Hire and Groundforce, endured a choppy session after it reported a record underlying profit of £47.1 million for the year to 31 March but delayed a decision on its dividend until later in the year.

The company's shares were initially 6% lower but recovered to stand unchanged at 800p, which compares with above 1000p before the crisis and 510p in mid-March. VP is re-opening branches and taking employees out of furlough as demand slowly recovers, with signs of a pick-up in activity in several sectors.