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Picton Property Income
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== Returns driven by strong track record of portfolio outperformance == === Accounting returns have averaged 10.2% pa over the past 10 years === The accounting total return1 has been positive in each of the past 10 years other than in FY13 when Picton was negatively affected by a weak economic and sector performance combined with relatively high gearing at the time. Despite this, the cumulative 10-year return has been 164.4%, or an average 10.2% pa. Reflecting Picton’s total return investment strategy, capital returns have contributed c two-thirds of total returns. {| class="wikitable" |+Exhibit 2: 10-year accounting total return history<ref>Source: Picton Property Income data, Edison Investment Research.</ref> !Year ending 31 March !FY13 ! colspan="2" |FY14 ! colspan="2" |FY15 ! colspan="2" |FY16 ! colspan="2" |FY17 ! colspan="3" |FY18 ! colspan="2" |FY19 !FY20 ! colspan="2" |FY21 ! colspan="2" |FY22 !Cumulative 10-year |- |Opening NAV per share (p) |58 | colspan="2" |49 | colspan="2" |56 | colspan="2" |69 | colspan="2" |77 | colspan="3" |82 | colspan="2" |90 |93 | colspan="2" |93 | colspan="2" |97 |58 |- |Closing NAV per share (p) |49 | colspan="2" |56 | colspan="2" |69 | colspan="2" |77 | colspan="2" |82 | colspan="3" |90 | colspan="2" |93 |93 | colspan="2" |97 | colspan="2" |120 |120 |- |DPS paid (p) |3.5 | colspan="2" |3.0 | colspan="2" |3.3 | colspan="2" |3.3 | colspan="2" |3.3 | colspan="3" |3.4 | colspan="2" |3.5 |3.5 | colspan="2" |2.8 | colspan="2" |3.4 |32.9 |- |Income return/dividends paid |6.0% | colspan="2" |6.1% | colspan="2" |5.9% | colspan="2" |4.8% | colspan="2" |4.3% | colspan="3" |4.2% | colspan="2" |3.9% |3.8% | colspan="2" |2.9% | colspan="2" |3.5% |56.8% |- |Capital return/change in NAV |<nowiki>-15.4%</nowiki> | colspan="2" |14.9% | colspan="2" |21.6% | colspan="2" |12.7% | colspan="2" |5.9% | colspan="3" |10.5% | colspan="2" |2.6% |0.7% | colspan="2" |3.7% | colspan="2" |24.4% |107.6% |- |NAV total return |<nowiki>-9.4%</nowiki> | colspan="2" |21.0% | colspan="2" |27.4% | colspan="2" |17.6% | colspan="2" |10.2% | colspan="3" |14.7% | colspan="2" |6.4% |4.4% | colspan="2" |6.6% | colspan="2" |27.9% |164.4% |- |Average annual total return | colspan="2" | | colspan="2" | | colspan="2" | | colspan="2" | | colspan="2" | | | colspan="2" | | colspan="3" | | colspan="2" | | |10.2% |} In common with the sector, the across-the-cycle income return has been much more stable than the capital return. Successful asset management is thus key to a sustainably enhancing total return. '''Exhibit 3: Income provides a relatively more stable bedrock to performance<ref>Source: Picton Property Income data, Edison Investment Research.</ref>''' [[File:Image3-f7e6e2e4c99232095c588067f99ddc03.png|600x600px]] A trend decline in the cost ratio,2 the result of economies of scale and tight cost control, has further supported returns, while gearing has also steadily reduced with the end-FY22 net loan to value ratio (LTV) at 21.2%. With a strong balance sheet, Picton continues to explore opportunities for further growth. This includes property acquisitions, but the company is also conscious of the significant discounts that exist across parts of the REIT sector and the opportunities that this may provide. The open-ended sector has in some cases faced challenges that emanate from the long-term nature of real estate investment and the mismatch between asset liquidity and variable capital. {| class="wikitable" |+Exhibit 4: Positive returns have been accompanied by moderate gearing and a low-cost ratio<ref>Source: Picton Property Income data.</ref> ! !FY13 !FY14 !FY15 !FY16 !FY17 !FY18 !FY19 !FY20 !FY21 !FY22 |- |nvestment property (£m) |386.4 |423.0 |540.9 |654.6 |624.4 |683.8 |685.8 |664.6 |682.4 |849.3 |- |Net LTV |54.5% |47.7% |30.1% |34.6% |27.3% |26.7% |24.7% |21.7% |20.9% |21.2% |- |Cost ratio |1.7% |1.7% |1.2% |1.1% |1.2% |1.2% |1.1% |1.1% |1.0% |1.0% |}
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