SEGRO (SGRO) H2 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2024, with adjusted profit before tax of £470m (up 14.9%), 5.5% growth in earnings and dividends per share, and 8% growth in net rental income year-over-year.

• Signed £91 million of new rent commitments, the third best year on record, and delivered £37 million from new development, despite a challenging macroeconomic environment.

• Maintained disciplined capital allocation, investing in development, acquiring high-quality assets, and disposing of underperforming properties.

• Advanced Responsible SEGRO commitments, doubling solar capacity to 123 MW and updating net zero targets.

• Positioned for future growth, especially in data centers, with a 2.3-gigawatt land/power bank and new planning approvals.

Financial highlights

• Earnings and dividends per share grew 5.5% year-over-year; profit before tax up 14.9% to £470m; final dividend recommended at 20.2p, full year dividend 29.3p.

• Net rental income increased 8% year-over-year to £500m, driven by 5.8% like-for-like growth and development completions.

• Portfolio valuation stable at £17.8 billion, up 1.1%; NAV per share unchanged at 907p.

• Loan-to-value reduced to 28%; net debt to EBITDA improved to 8.6x; committed liquidity at £2.1bn.

• EPRA vacancy rate at 4.1%; portfolio yield stable at 5.4%.

Outlook and guidance

• Confident in further growth in 2025, supported by strong balance sheet and liquidity over £2 billion.

• Expecting continued rental income growth from reversion and development pipeline, with £118m embedded reversionary potential.

• Guidance for ERV growth remains 2%-6% long-term, with 3%-4% average expected.

• Development CapEx for 2025 guided at £500 million, targeting BREEAM 'Excellent' or better for new projects.

• Opportunity to double rent roll (+51%) within three years through development, reversion, and data centre expansion.