Picton’s half-year: profit up, NAV per share higher, and buybacks bite
Picton Property Income has posted a tidy set of half-year numbers to 30 September 2025. Profit after tax rose to £15.1 million, with NAV per share up to 102p and a total return of 3.4%. The dividend was raised in May and remained covered at 106%. Management also leaned into its buyback playbook, repurchasing shares at a chunky discount to NAV.
If you like industrial-heavy portfolios with conservative debt and visible rental upside, this reads well. The trade-off is lower office occupancy for now, which is a deliberate by-product of resetting space and upgrading buildings.
Key numbers investors will care about
| Metric | Half year to 30 Sept 2025 |
|---|---|
| Profit after tax | £15.1 million (2.9p per share) |
| EPRA earnings | £10.5 million (2.0p per share) |
| NAV / EPRA NTA per share | 102p (March 2025: 100p) |
| EPRA NDV per share | 106p |
| Total return | 3.4% |
| Total shareholder return | 12.1% |
| Dividend paid | 1.9p per share, cover 106% |
| Portfolio value | £695 million |
| Like-for-like ERV growth | 3.7% |
| Occupancy | 90% (industrial 98%, retail 95%, offices 75%) |
| LTV | 22% |
| Debt | £209 million, 100% fixed, 3.7% rate, 6.2-year WA maturity |
Share buybacks at a 25% discount – why this matters
Picton announced a new £12.5 million buyback in September, taking the total allocation to £30 million since January 2025. During the half, it bought 13.6 million shares at an average 77p – roughly a 25% discount to the September NAV of 102p per share. Since period end, a further £2.4 million of buybacks were made at a 22% discount.
My take: buying in stock materially below NAV is sensible capital allocation for a REIT with cash and an undrawn £50 million revolving credit facility. It boosts NAV per share and can be earnings accretive. The flip side is it reduces dry powder for acquisitions, so the onus is on management to balance repurchases with the identified pipeline.
Industrial-led portfolio drives ERV growth and outperformance
Picton delivered a total property return of 3.2%, ahead of the MSCI UK Quarterly Property Index at 2.7%. Like-for-like portfolio values rose 0.8% (0.6% after net capex), while ERV – the valuer’s view of current market rent – climbed 3.7% with growth across all sectors, led by industrial.
- Sector mix: 68% industrial, 20% office, 12% retail and leisure.
- More than 50 asset management deals secured £6.1 million of contracted rent, 2.8% ahead of March 2025 ERV.
- Income upside of £10.0 million versus contracted rent: £5.3 million to capture from vacant space and £4.7 million from resetting rents at lease events.
That “reversion” is the crux. Industrial re-lettings and reviews are resetting higher, and management is actively creating the conditions to crystallise it.
Offices: deliberate pain now for gain later
Office occupancy is 75%. Picton sold its largest, lowest-yielding office for £34.5 million at a 1% premium to the March valuation and took several early surrenders where it was paid to take space back. Two thirds of the current voids are identified for or under refurbishment.
There is £4.3 million of ERV in vacant offices and another £0.7 million of potential from rent resets. That is meaningful, but leasing will be the proof point. The post-period lettings and renewals are encouraging, albeit from a low office base.
Post-period catalysts: Rushden and Radlett in focus
After the period, Picton completed lettings totalling £0.9 million per annum, 5% ahead of March 2025 ERV, and renewals of £0.3 million per annum that were 47% above previous rents. It also received £3.6 million from two industrial occupiers who vacated, comprising £2.3 million of dilapidations and £1.3 million of additional income.
Two specific swing factors:
- Rushden logistics: the occupier exercised a break effective October 2025. Picton received £2.5 million after period end (£0.8 million break penalty and £1.7 million dilapidations). ERV is around 50% above the previous passing rent of £1.6 million. Short-term, EPRA EPS may dip while the unit is re-let, but the medium-term uplift could be substantial.
- Radlett: an occupier vacated in November with £1.1 million received for surrender and dilapidations. ERV is more than 20% above the previous £1.0 million per annum rent, and Picton has a positive pre-application response on a proposed extension.
Retail steadying, sustainability spend rising
Retail and leisure is 12% of the portfolio and looks steadier, with occupancy at 95% and ERV now above contracted rent for the first time in years. The Carlisle hotel lease restructure brought in a £2.4 million premium in exchange for a longer lease at a lower rent.
On upgrades, Picton invested £4.0 million across eight assets. EPC ratings improved again, with 86% now rated A-C. Decarbonisation projects completed in Milton Keynes and Chatham, with Bristol and Manchester underway. That matters for occupier demand, operating costs, and compliance risk.
Balance sheet – low LTV, fixed-rate debt, flexibility intact
LTV sits at 22% (March 2025: 24%), helped by disposal proceeds. Total borrowings are £209 million, all at fixed rates with a 3.7% weighted average interest rate and 6.2 years to maturity. The £50 million revolving credit facility is undrawn.
EPRA NDV per share is 106p, £23 million above reported net assets, reflecting the fair value of debt. In short, leverage is conservative, interest costs are predictable, and liquidity is available for buybacks or selective acquisitions.
Dividend – small rise, still covered
Dividends of 1.9p per share were paid in the half, up 2.7% and covered 106% by EPRA earnings. That cover gives room to keep paying while voids are worked through and before the reversion is fully captured.
What I think this means for shareholders
- Positive: NAV per share up to 102p, TSR of 12.1%, and property returns ahead of the index. Buybacks at a 22-25% discount are accretive. The industrial tilt and 3.7% ERV growth underpin future income.
- Watch-outs: Office occupancy at 75% drags EPRA earnings near term. The Rushden void is a temporary headwind until re-let, even with the £2.5 million received.
- Opportunity: £10.0 million of reversion versus contracted rent is meaningful. If leasing momentum continues and proceeds are recycled into higher yielding assets, EPRA earnings should improve.
What to watch next quarter
- Leasing pace on the £5.3 million ERV of vacant space, especially offices.
- Progress and pricing on re-letting Rushden and the Radlett unit, plus any extension plans.
- Deployment of disposal proceeds into higher yielding assets and how that compares to ongoing buybacks.
- Dividend cover holding around or above 100% while voids are addressed.
Bottom line
Picton is doing the simple things well: recycle out of low-yield offices, double down on industrial, fix the balance sheet, and buy back shares at a discount. There is execution risk around leasing, but the reversion runway is clear. For income-focused investors who can tolerate some near-term volatility, this looks like steady progress with sensible capital allocation.
