Londonmetric to hike dividend by a fifth following mega-merger
Londonmetric swung from a loss to £119m profit in 2024 as the real estate investment trust (REIT) reported a 21 increase in rental income following its merger spree.
In the investment trust’s annual results for the year to 31 March, it reported rental income had increased from £144m to £175m throughout the year.
The news came following its takeover of LXi REIT earlier this year, which doubled the trust’s overall net asset base. However, as a result of the new shares issued to fund the deal, net assets per share declined slightly, from 204p to 195p at the end of March 2024.
Londonmetric reported a total property return of 4.7 per cent throughout the year. That was ahead of the Investment Property Databank index, which fell into the red during the same period.
The trust increased its dividend for 7.4 per cent to 10.2p per share for the year, but said it expected to hike the payout in 2025 as the merger paid off.
The group said it would target a 2.85p per share dividend for the first quarter of its 2025 financial year, up 18.8 per cent.
It added it would target a 12p per share dividend for the full year.
Andrew Jones, chief executive of Londonmetric, said: “This has been a transformational period for our company with the successful execution of two transactions.
“We have doubled the size of our portfolio to £6bn, creating the UK’s leading triple net lease REIT and the third largest UK REIT by market capitalisation.
“Scale and income granularity are increasingly important and our activity has further enhanced our sector leading income metrics with reliable, predictable and exceptional income growth.”
Meanwhile, the trust also announced it had sold off two Scottish offices originally belonging to LXi to a single buyer at a net initial yield of seven per cent.
The trust said it had disposed of an 85,000 square foot (sq ft) office in Dundee and a 60,000 sq ft office in Glasgow. It sold the properties to a single buyer for £36.6m.
Separately, the trust also sold off a former LXi care home in the West Midlands for £500,000.
Londonmetric said it has now sold £55.4m of what it calls ‘non-core’ LXi assets, at an average of seven per cent above prevailing book value.
Chief exec Jones said while the assets were “good” and “well-let”, the trust was continuing to look to exit non-core sectors and geographies, instead reinvesting where the trust had “a competitive edge and which are enjoying a structural tailwind.”