Palace Capital (PCA) H1 2025 earnings summary

Executive summary

• Continued execution of capital return strategy via property disposals, with £28.8m of assets sold at 1.9% above March 2024 valuation and £21.7m returned to shareholders through a tender offer in July 2024.

• Since July 2022, over £43m has been returned to shareholders, with further disposals and returns planned as asset management initiatives complete.

• Net cash position maintained since April 2024, providing flexibility for future disposals and capital returns.

Financial highlights

• Adjusted profit before tax fell 8.7% to £2.1m (Sept 2023: £2.3m) due to income lost from disposals, offset by lower finance and admin costs.

• Adjusted EPS rose 10.9% to 6.1p, reflecting the accretive effect of the tender offer.

• IFRS loss before tax was £0.9m (Sept 2023: £0.2m loss), mainly from a £3.2m valuation deficit, partially offset by £0.6m profit on disposals.

• EPRA NTA per share decreased 3.8% to 252p (March 2024: 262p), mainly due to portfolio revaluation deficit.

• Net cash increased to £13.1m (March 2024: £11.5m); gross debt reduced to £8.2m.

• Dividends paid totaled 7.5p per share, with an interim dividend of 3.75p per share declared.

Outlook and guidance

• Commercial property and financial markets remain challenging, with uncertainty following recent Budget changes.

• Asset management progress continues, with several assets expected to be marketed for sale in early 2025.

• Strong cash position provides flexibility for timing of disposals and further capital returns, either via buybacks or tender offers.