Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

June 6, 2023

Construction PMI grows for fourth month | BILN, TPFG, GEN, WHR

Company news

Billington Holdings (BILN, 405p, £52m)

UK structural steel fabrication and construction group. AGM. Guidance: “2023 has started positively for Billington and the company is trading in line with market expectations.  Despite the continuing macroeconomic headwinds, the opportunities the group are seeing in its targeted sectors remain buoyant, providing optimism for the later part of 2023 and into 2024.  We have a robust business with significant momentum and I remain confident in the group’s prospects for the medium and long term”.

The Property Franchise Group (TPFG, 310p, £99m)

Franchised lettings and estate agent group. Launch of new financial services division. AGM. Guidance: “In a challenging environment, the resilience of TPFG’s franchise model and of its recurring income streams, most notably lettings, continue to stand the Group in a strong position despite the wider market challenges. As expected, group revenue for the first four months to 30 April 2023 was unchanged over the prior year as were Management Service Fees. Whilst the broader market remains uncertain, the Board expects this to present opportunities that the group’s robust balance sheet will allow it to explore. Overall, the Board continues to remain confident in achieving expectations for the full financial year”.

Genuit Group (GEN, 324p, £807m)

Manufacturer of sustainable water, climate and ventilation products for the built environment, formerly Polypipe. Directorate change. CFO Paul James is to step down following five years in the role to take up the same position with a privately owned company. He will remain in post up to 30 September 2023 to ensure a smooth transition and the Board is commencing a process to appoint a successor.

Warehouse REIT (WHR, 103p, £439m)

Specialist warehouse investor. FY (Mar) results. Gross property income -1.8%, £47.8m; IFRS loss before tax, £183m (FY 22, profit, £191m); EPRA EPS -39%, 6.4p; div unch, 6.4p; EPRA TNAV -29%, 123p; LTV, 34% (25%); portfolio valuation -18%, £829m (131 bps equivalent yield expansion partially offset by growth in rental values).

Trading: Occupancy, 95.8% (93.7%); LFL rental growth, 3.1%.

Outlook: “Since year end, there are clearer signs that investors are returning to the market, evidenced by activity across the sector and our most recent sales, which are ahead of book.  At Radway, our flagship scheme in Crewe, we are now in advanced negotiations for a significant pre let, a major milestone which validates our ambitious but highly disciplined approach to development.  This opportunity, coupled with an improved financial position and our 71% weighting towards multi-let assets, the strongest part of our market, leaves us well positioned for the future”.

Economic data

Construction activity grew for the fourth consecutive month in May, according to PMI data from S&P Global . The headline seasonally adjusted S&P Global / CIPS UK Construction Purchasing Managers’ Index – which measures month-on-month changes in total industry activity – registered 51.6 in May, up from 51.1 in April and above the neutral 50.0 mark for the fourth successive month. Although indicative of only modest growth, the latest reading pointed to the strongest upturn in total construction activity since February.

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