Sirius profit hit by valuation changes

Sirius has increased funds from operations to more than €100m (£86.1m) but valuation changes have pushed profit down by 48%. The business and industrial park owner announced a 37% increase in funds from operations to €102.1m, up from €74.6m last year, beating the five-year target of €100m it set in 2018. Chief executive Andrew Coombs said “sizeable rental growth underpinned by continued occupier demand” in both Germany and the UK had resulted in a ninth consecutive year of 5%-plus like-for-like rental growth. “This strong operational performance enabled us to deliver a significant increase to the annual dividend, which rose 29%, and to surpass our €100m FFO ambition.” Record rental growth of 7.7% also helped the book value of its investment property rise by 1.1% to €2.1bn, with investment offsetting yield expansion. But while adjusted pretax profit was 24.5% higher at €96m, before adjustments profit decreased by 48.5% to €87m, as a result of the €7.7m valuation deficit compared to last year’s €141m surplus. Sirius recycled €90m of assets over the 12 months, including six disposals at a 25% premium to book value. Coombs added: “We will continue to pursue an opportunistic asset recycling programme where we see opportunities to crystalise returns and drive value.” He said the outlook was “positive”, with cash reserves of €124m and almost all of the group’s debt secured at fixed interest rates for at least the next three years. “While we remain alert to the potential impact of ongoing global macroeconomic uncertainty, Sirius remains well placed to continue to deliver attractive returns for shareholders,” he said. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews