Segro (SGRO), a property company with large warehouses, issued their final results this morning. Adjusted profit was up 8.4% but IFRS earnings per share were down substantially. This curate’s egg of results arose because the assets were revalued down by 11% to reflect the general fall in commercial property valuations particularly in the second half of the year, while rental income was up by 18.9%. Rental income rose due to strong like-for-like rental growth (a 23% average uplift on rent reviews and renewals) and development completions. The full year dividend is increased by 8.2%.
Comment: These results would look really good if the fall in the value of their properties was ignored. They have no control over the latter of course which are affected by macroeconomic conditions, the cyclical nature of property investments and investors’ general view of commercial property which is very negative as other assets such as offices and retail have declined while interest rates have risen. The market has responded positively to these results after an initial hiccup. For the longer-term it’s starting to look very positive.
Energy company BP (BP.) yesterday announced they were acquiring TravelCenters of America for $1.3 billion. TravelCenters operate a network of EV charging points in the USA.
BP is paying about six times Travelcenters EBITDA and their share price rose by 71% on the news. BP is also planning to invest $1 billion in electric vehicle charging across the USA by 2030. This is part of BP’s five “transition growth engines”.
As a shareholder in BP, this looks a sensible investment and is a rebuttable of those who say big oil companies are not doing enough to move away from oil.
Tesla is also expanding its charging network and making it accessible to other vehicle makes. The electric vehicle revolution is clearly accelerating in the USA partly due to US government encouragement.
The bad news today for wealthy investors was that according to the FT Portugal is scrapping its golden visa scheme that gives non-Europeans the right to claim residency in return for investment. With Portugal having low tax rates and a good climate this was a good location for the moderately rich (it only required property investment of Euro500,000).
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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