U+I Group Plc (UAI.L), formerly Development Securities Plc, is a specialist regeneration developer and investor. With a £6bn portfolio of complex, mixed-use, community-focused regeneration projects including a £200m investment portfolio, the company continues to unlock urban sites bristling with potential in the London, Manchester and Dublin city regions. UAI exists to create long-term socioeconomic benefit for the communities in which it works, delivering sustainable returns to shareholders.
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On April 26th, 2018, UAI published results for the year ending Feb 28th2018. The group reported a record year of profits and progress, with £68.3m of development and trading gains (2017: £35m) delivered at top end of FY18 guidance. A 12.2% post tax total return was driven by increase in basic NAV to 303 pence per share, along with significant progress on repositioning the investment portfolio. UAI reported net management fees of £2.1m earned, and on the back of that approved a 100% increase in the total dividend to 17.9p (2017: 8.7p). CEO Matthew Weiner said the results “are an endorsement of the ambition that we set ourselves when we established U+I.” He added that UAI has further visibility for the next ten years.. “with a pipeline of existing projects with a gross development value in excess of £7bn.”
The spike in the UAI share price since the results announcement clearly shows the bullish response from the City and markets to the numbers. Even at this new elevated rating, the VectorVest RT (Relative Timing) metric, (a fast, smart, accurate indicator of a stock’s price trend), still logs a current rating of 1.54, which is excellent on a scale of 0.00 – 2.00. Other high scoring metrics include a GRT (Earnings Growth Rate) of 15%, which VectorVest considers to be very good. A fair 0.95 RS (Relative Safety) rating, (scale of 0.00 to 2.00) may deter cautious investors, but trading at 237p there is plenty of growth opportunity when taking into account the current VectorVest valuation of 286p and NAV of 303p.
The UAI share price chart is shown above in my normal format. In the final months of 2017 based on a jump in earnings the VectorVest program revalued the share upwards. Since this time the share has charted an ascending triangle which is a bullish technical pattern. The share is on a Buy recommendation on VectorVest and should be carefully considered on any short term weakness over the next few days.
Summary: Managed well, a property investment company can be a valuable addition to any investor portfolio. The stellar results announcement and growth pipeline puts UAI firmly in the frame as one such prospective company, particularly in light of the 100% increase in the dividend – a bullish move from a confident management team. These factors, the increase in NAV and a strong RT (Relative Timing) rating ensures a buy recommendation from the VectorVest stock analysis and portfolio management platform.
May 8th 2018
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