Cache Logistics Trust (CACHE) turned in a good set of 3Q12 results that were consistent with our expectations. DPU for the quarter edged up 2.3% to 2.144 S cents, notwithstanding an enlarged unit base from private placement done in end-Mar. As at 30 Sep, portfolio occupancy remained at 100%, while weighted average lease to expiry stood sturdy at 4.1 years. CACHE’s financial position has also remained healthy. While aggregate leverage increased from 27.5% in 2Q to 32.6%, all-in financing costs improved from 4.38% to 3.57%, thanks to refinancing exercise at the end of 2Q. In addition, this has also improved its debt maturity profile and increased the amount of committed line of funding, thereby strengthening its financial flexibility significantly. We are leaving our forecasts intact as the results had panned out according to our estimates. However, we raise our fair value slightly from S$1.26 to S$1.30 on firmer cap rate assumptions. Maintain BUY.
Strong 3Q results within expectations
Cache Logistics Trust (CACHE) turned in a good set of 3Q12 results that were consistent with our expectations. NPI increased by 12.9% YoY to S$18.1m, while distributable income similarly rose by 12.7% to S$15.1m. The quarterly growth, we note, was mainly attributed to incremental income from upward rental adjustments and contribution from its past acquisitions. DPU for the quarter edged up 2.3% to 2.144 S cents, notwithstanding an enlarged unit base from private placement done in end-Mar. For 9M12, NPI came in at S$50.9m (+10.9%), whereas DPU totalled 6.211 S cents (+1.3%). This formed ~74% of both our and consensus full-year NPI and DPU forecasts.
Portfolio as strong as ever
CACHE’s portfolio remained 100% occupied as at 30 Sep. Weighted average lease to expiry stood at 4.1 years (vs. 4.4 years in 2Q), with less than 2% of its total GFA due for renewal in 2013. Management revealed that while there was a slowdown in manufacturing activity, leasing activities in the market had held relatively firm, supported mainly by lease renewals. With the recent completion of the acquisition of Pandan Logistics Hub, we note that CACHE now commands ~22.9% market share of ramp-up logistics warehouses in Singapore. We like its exposure to such warehouses as the supply is tight due to specialized planning and design specifications required for the development.
Maintain BUY
CACHE’s financial position has also stayed sturdy. While aggregate leverage increased from 27.5% in 2Q to 32.6% in 3Q, all-in financing costs improved from 4.38% to 3.57% (interest coverage of 7.9x), thanks to refinancing exercise at the end of 2Q. In addition, this has also improved its debt maturity profile and increased the amount of committed line of funding, thereby strengthening its financial flexibility significantly. We are leaving our forecasts intact as the results had panned out according to our estimates. However, we raise our fair value slightly from S$1.26 to S$1.30 on firmer cap rate assumptions. Maintain BUY on CACHE.
Cache Logistics Trust (CACHE) turned in a good set of 3Q12 results that were consistent with our expectations. NPI increased by 12.9% YoY to S$18.1m, while distributable income similarly rose by 12.7% to S$15.1m. The quarterly growth, we note, was mainly attributed to incremental income from upward rental adjustments and contribution from its past acquisitions. DPU for the quarter edged up 2.3% to 2.144 S cents, notwithstanding an enlarged unit base from private placement done in end-Mar. For 9M12, NPI came in at S$50.9m (+10.9%), whereas DPU totalled 6.211 S cents (+1.3%). This formed ~74% of both our and consensus full-year NPI and DPU forecasts.
Portfolio as strong as ever
CACHE’s portfolio remained 100% occupied as at 30 Sep. Weighted average lease to expiry stood at 4.1 years (vs. 4.4 years in 2Q), with less than 2% of its total GFA due for renewal in 2013. Management revealed that while there was a slowdown in manufacturing activity, leasing activities in the market had held relatively firm, supported mainly by lease renewals. With the recent completion of the acquisition of Pandan Logistics Hub, we note that CACHE now commands ~22.9% market share of ramp-up logistics warehouses in Singapore. We like its exposure to such warehouses as the supply is tight due to specialized planning and design specifications required for the development.
Maintain BUY
CACHE’s financial position has also stayed sturdy. While aggregate leverage increased from 27.5% in 2Q to 32.6% in 3Q, all-in financing costs improved from 4.38% to 3.57% (interest coverage of 7.9x), thanks to refinancing exercise at the end of 2Q. In addition, this has also improved its debt maturity profile and increased the amount of committed line of funding, thereby strengthening its financial flexibility significantly. We are leaving our forecasts intact as the results had panned out according to our estimates. However, we raise our fair value slightly from S$1.26 to S$1.30 on firmer cap rate assumptions. Maintain BUY on CACHE.
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