Town Centre Securities are a property investment and car parking company that have some very nice niche market capture in highly sought areas of the country, most notably its flagship property, The Merrion Centre, based in Leeds.
Weathering a financial storm is never easy but when storm clouds lift and a normalcy of markets starts to come through again, good times emanate into a strong financial standing. Town Centre Securities is now capitalising handsomely on upwardly revised property revaluations which is feeding through to better profits, earnings per share and crucially, net asset valuations.
Final year end results to 30 June 2014 released on 17 September showed net assets were up 15.3% to 308 pence, profits were up 2.7% to £7.6 million and earnings per share 5.1% better at 14.4 pence per share. Merrion Centre played a significant role in driving these figures upwards causing shares to be trading at a substantial discount to net assets. This gap has closed somewhat since.
In 2006 Town Centre Securities shares were trading at over £7.00 but fell off a cliff during the financial meltdown, finally hitting their nadir in Q1 in 2009 at circa £0.60 and now stand at circa £2.80 – a level not seen since Q1 2008. It has been a long path regaining lost ground but property valuations are improving sufficiently to make better and more meaningful headway.
Technically, these shares have performed well during the period February to May each year since 2009, with average gains made of circa 47% along the way (assuming exact timing troughs to peaks every year). A similar rise again this year would put shares at circa £4.00 placing them back at Q3 2007 levels.
Although the legacy of financial implosions still exists it seems Town Centre Securities is able to make better numbers stick. Merrion’s improved performance is proof that high street spending is improving (in Leeds anyway) which is leading to merry reading of Town Centre Securities’ financial position.
|Date||Company||Status||Mid Price||Target 1||Target 2||Target 3||Target 4|
|04/02/2015||Town Centre Securities||Initial write up||£2.80||£3.31||£3.55||£3.74||£3.97|