Palace Capital (PCA) H2 2024 earnings summary

Executive summary

• Achieved significant deleveraging, reducing gross debt by £56.0m to £8.3m and ending the year with £11.5m net cash, up from net debt of £58.8m last year.

• Disposed of 21 investment properties for £93.7m, 4.4% above March 2023 valuation, and returned £15.2m to shareholders via buybacks.

• Adjusted profit before tax fell to £5.4m (2023: £7.6m) due to income lost from disposals; IFRS loss before tax was £9.3m (2023: £35.8m loss).

• Proposed tender offer to return approximately £22m to shareholders, with completion expected in July 2024.

Financial highlights

• Net asset value: £97.8m; EPRA NTA per share: 262p (down 11.5% year-over-year).

• Contractual rental income: £8.0m; EPRA occupancy: 82.0%; WAULT to break: 5.4 years.

• Dividend per share: 15.0p; total shareholder return: 13.7%.

• Gross property income: £12.1m (down from £17.9m); net rental income: £9.6m (down from £15.6m).

• Adjusted EPS: 13.8p; basic EPS: (23.7p).

Outlook and guidance

• Market conditions remain challenging, but strong cash position provides flexibility for further disposals and capital returns.

• UK interest rates expected to fall, potentially stabilizing property valuations.

• Asset management initiatives continue to prepare remaining properties for sale.