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(Alliance News) - Workspace Group PLC on Wednesday posted a swing to profit in its recent financial year, with increased occupancy as workers returned to the office.
For the year that ended March 31, the London-based real estate investment trust swung to a pretax profit of GBP124.0 million from a loss of GBP235.7 million the year before.
Total revenue declined 6.6% to GBP132.9 million from GBP142.3 million, as net rental income increased 6.4% to GBP86.7 million from GBP81.5 million.
Customer demand is now at pre-pandemic levels, Workspace said, as workers return to the office. Around 1,500 lettings were completed over the year, with 900 enquiries on average each month.
EPRA net tangible assets per share grew 5.3% to GBP9.88 compared from GBP9.38, which was driven by yield movement. The equivalent yield on its like-for-like portfolio came in at 5.7% from 5.9%.
Workspace increased payouts by 21% for the year, declaring a dividend of 21.5 pence compared to 17.75p a year before.
Regarding its recent GBP265.7 million acquisition of McKay Securities back in May, it noted the firm reported GBP20.4 million in rental income and GBP7.8 million in trading profit after interest for the 12 months to March 31.
It is considering the sale of McKay's industrial portfolio, which "offers limited opportunity for [it] to add value". Any reduction in rental income will be offset by reduced interest costs, Workspace said.
"Overall, with very limited risk we see this as an attractive opportunity to deliver significant value from integrating McKay onto the Workspace platform, scaling up our portfolio and its reach, and recycling the proceeds from the sale of non-core assets," said Chief Executive Officer Graham Clemett.
Shares in Workspace were up 0.9% to 728.50 pence each in London on Wednesday morning.
For the next financial year, Workspace expects rental income to be boosted by its recent acquisitions. It notes high inflation will increase service charge and administrative costs, with staff costs being the highest driver. However, the year will also likely see lower void costs as occupancy improves even further.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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