12 June 2026

 

 

 

PICTON PROPERTY INCOME LIMITED

('Picton', the 'Company' or the 'Group')

 

Preliminary Annual Results

 

 

Picton announces its annual results for the year ending 31 March 2026.

 

Chair of Picton, Francis Salway, commented:

"These results reflect a year of progress, where we have delivered a total return of 6.1% alongside a total shareholder return of 12.6%.

Despite macroeconomic conditions, occupational markets are proving more resilient, against a backdrop of limited new development. We remain well-positioned, with a high quality portfolio and a disciplined approach to capital allocation, which this year, has been focused on reducing office exposure, investing into the portfolio and share buybacks.

At the start of 2026, we initiated a Strategic Review to explore options to maximise value for shareholders which has resulted in a Proposed Offer being announced on 12 May 2026. The Board remains focused on shareholder value and is committed to engaging with stakeholders through this process."

 

Michael Morris, Chief Executive of Picton, commented:

"We have delivered solid operational performance, with NAV and ERV growth over the year.

This included 5% rental growth across the portfolio driven by lettings, lease renewals and investment into upgrading the portfolio. This approach has delivered our thirteenth consecutive year of outperformance against the MSCI UK Quarterly Property Index.

Two key industrial lease events have reduced occupancy in the second half of the year, but with an encouraging leasing pipeline and significant reversion of £13.2 million above the current contracted rent, we are well placed to grow earnings through leasing activity, resetting rents to ERV and targeted investment in the portfolio."

 

Robust financial performance delivering positive total and shareholder returns

‒	Net assets of £522 million, or 102p per share (2025: 100p per share)
‒	Profit after tax of £25.9 million, or 5.0p per share (2025: 6.9p per share)
‒	EPRA earnings of £20.9 million, or 4.0p per share (2025: 4.2p per share)
‒	Dividends paid during the financial year of 3.8p per share, a 2.7% increase (2025: 3.7p per share)
‒	Total return of 6.1% (2025: 8.1%)
‒	Total shareholder return of 12.6% (2025: 16.0%)
‒	Share buybacks of £17.3 million at an average price of 77p per share, 25% below the March NAV of 102p per share

 

Outperforming property portfolio

‒	Continued MSCI outperformance for 13 consecutive years with a total property return of 5.9% for the year (MSCI UK Quarterly Property Index: 5.4%)
‒	Delivered upper quartile outperformance against the MSCI UK Quarterly Property Index since launch in 2005
‒	Portfolio weighted towards industrial sector 67%, office 21% and retail and leisure 12%
‒	1.7% like-for-like increase in property valuation, or 0.7% after capital expenditure
‒	Disposal of highest value office asset for £34.5 million at a 1% premium to March 2025 valuation
‒	4.8% like-for-like increase in estimated rental value (ERV)
‒	Portfolio occupancy of 84%, impacted by two key lease events in the latter half of the year
‒	Weighted average unexpired lease term (WAULT) increased to 5.4 years to first break (2025: 4.9 years)
‒	Captured rental growth through:
	‒      33 lettings, totalling £3.9 million per annum, 4% ahead of March 2025 ERV
	‒      43 lease renewals or regears, totalling £4.7 million per annum, 4% ahead of March 2025 ERV
	‒      17 rent reviews securing uplift of £0.4 million per annum, 4% ahead of March 2025 ERV
‒	Portfolio with significant reversionary potential of £13.2 million, 11% above the March 2026 contracted rent with:
	‒      £8.8 million from letting vacant space (47% industrial, 50% office and 3% retail and leisure)
	‒      £4.4 million where market rent is higher than contracted rent

 

Valuable long-term debt structure

‒	Total borrowings of £208 million, with 100% at fixed rates and a weighted average interest rate of 3.7%
‒	Loan to value ratio (LTV) of 24% (2025: 24%)
‒	£50 million undrawn revolving credit facility
‒	EPRA Net Disposal Value (NDV) of 107p per share, reflecting fair value of debt

 

Positive sustainable progress

‒	£8.8 million invested across the portfolio
‒	85% of assets in office portfolio either fully or partly decarbonised
‒	Improvement in portfolio EPC ratings, with 86% now rated A-C (2025: 83%)
‒	Annual reduction in Scope 1 and 2 emissions of 23%

 

Activity post year-end

‒	Positive leasing interest in vacant space across all sectors, with proposals made or negotiations ongoing on over £5 million of ERV (1)
‒	This includes our second largest void, where negotiations are well advanced to upsize an existing occupier, subject to landlord works and planning consent (1)
‒	Additionally, lettings have completed in the office and industrial sectors with an ERV of £0.6 million, 2% ahead of the March 2026 ERV
‒	Completed disposal of residual Cardiff asset for £1.2 million, 30% ahead of the March 2026 valuation

 

Strategic Review

‒	On 12 May 2026, a non-binding indicative all-share offer ('Proposed Offer') from LondonMetric Property Plc and Schroder Real Estate Investment Trust Limited was announced. The Company is engaging with all stakeholders and due diligence is ongoing. Further announcements will be made as appropriate

 

⁽¹⁾ There is no certainty that terms will be agreed in respect of these transactions

 

 

	31 March 2026	31 March 2025	31 March 2024
Property valuation	£701m	£723m	£745m
Net assets	£522m	£533m	£524m
EPRA NTA per share	102p	100p	96p

 

	Year ended 31 March 2026	Year ended 31 March 2025	Year ended 31 March 2024
Profit/(loss) for the year	£25.9m	£37.3m	£(4.8)m
EPRA earnings	£20.9m	£22.8m	£21.7m
Earnings per share	5.0p	6.9p	(0.9)p
EPRA earnings per share	4.0p	4.2p	4.0p
Total return	6.1%	8.1%	(0.9)%
Total shareholder return	12.6%	16.0%	(1.0)%
Total dividend per share	3.8p	3.7p	3.5p
Dividend cover	103%	113%	114%

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE UK MARKET ABUSE REGULATION

 

For further information:

Tavistock

James Verstringhe

020 7920 3150, [email protected]

 

James Whitmore

07740 931042, [email protected]

 

Olivia Rhodes-Thompson

07760 790610, [email protected]

 

Picton

Kathy Thompson, Company Secretary

020 7011 9988, [email protected]

 

About Picton

Established in 2005, Picton is listed on the main market of the London Stock Exchange and is a constituent of a number of EPRA indices including the FTSE EPRA Nareit Global Index.

Picton owns and actively manages a £701 million UK commercial property portfolio, invested across 46 assets and with around 300 occupiers (as at 31 March 2026).

Through an occupier focused, opportunity led approach, Picton aims to be the consistently best performing diversified UK REIT and has delivered upper quartile outperformance and a consistently higher income return than the MSCI UK Quarterly Property Index since launch.

With a portfolio strategically positioned to capture income and capital growth, currently weighted towards the industrial sector, Picton's agile business model provides flexibility to adapt to evolving market trends over the long-term.

Picton has a responsible approach to business and is committed to being net zero carbon by 2045.

For more information please visit: www.picton.co.uk

 

LEI: 213800RYE59K9CKR4497

 

Rule 29 of the Takeover Code (the 'Code')

Following the publication of the Company's Strategic Review and Commencement of Formal Sale Process on 13 January 2026, the Company is in an offer period for the purposes of the Code. The portfolio valuation of £701 million (the 'Portfolio Valuation') referred to in this announcement constitutes asset valuations in accordance with Rule 29.1 of the Code. The Company has agreed with the Takeover Panel that in the event of a firm offer being announced for the Company, a valuation report in accordance with Rule 29 of the Code on the 31 March 2026 NAV or the Portfolio Valuation or any subsequent net asset value or portfolio valuation published by the Company prior to date of such offer will be published in due course and by no later than the publication of any offer document or scheme document in relation to such offer.

 

Publication on website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available (subject to certain restrictions relating to persons resident in restricted jurisdictions) on the Company's website: www.picton.co.uk promptly following its publication and in any event no later than 12 noon (London time) on the business day following the release of this announcement. Neither the content of any website referred to in this announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this announcement.

 

 

Chief Executive's Review

Our focus on total return and shareholder value continues to deliver positive results.

 

During the year, we marked our 20-year anniversary and I am now pleased to report a profit of £26 million for the financial year. Our net assets have grown to over 102 pence per share and we have paid dividends of £20 million, fully covered by EPRA earnings.

This has been set against a backdrop of both international and domestic economic uncertainty and volatility. Despite reducing interest rates in the UK, and an improving inflation outlook for most of the year, this was offset by the impact of higher taxes and weaker business sentiment, but also a delayed 2025 UK Budget. Recent events in the Middle East have provided another shock to financial markets, particularly through the impact of higher energy prices and the inflationary and interest rate outlook.

A year ago we set out a plan to reduce exposure to lower yielding assets, rebalance the portfolio to grow earnings, invest into our portfolio to support future occupancy and earnings growth, make prudent use of leverage and unlock shareholder value with our share buyback programme, using proceeds from asset disposals.

We have made progress against all of these objectives, albeit a continued share price discount to net asset value has led to greater use of share buybacks relative to new asset acquisitions.

I am particularly pleased that, alongside a total return of over 6%, our total shareholder return has been over double that at 13%, reflecting much of the above activity.

Performance

We have seen NAV per share growth of 2%, driven in part by portfolio revaluation gains, but also the positive impact of our share buyback programme.

Overall profitability was lower, reflecting the more subdued property market, with earnings per share of 5.0 pence, compared with 6.9 pence in the prior year. Similarly, our EPRA earnings was 4.0 pence compared with 4.2 pence in the prior year, principally reflecting the change in occupancy over the year.

Portfolio performance

Our property portfolio, as measured against the MSCI UK Quarterly Property Index, has continued to outperform, now for the thirteenth consecutive year. We have delivered upper quartile total property return performance since launch on an annualised basis. Our property total return this year was 5.9%, which compares to the MSCI All Property total return of 5.4%.

I am encouraged by the like-for-like ERV growth of close to 5% driven in part by both the underlying growth in our industrial assets and also the positive impact of capital investment into office assets, enabling us to facilitate leasing and regear transactions.

We sold our largest office asset by value during the year, 1% above the preceding valuation, reducing our office exposure to 21% from 36% five years ago. The majority of the proceeds were used to continue our share buyback programme as well as our ongoing reinvestment programme into our portfolio to create high quality assets that meet occupiers' expectations.

Whilst we have seen 27% more leasing transactions relative to last year, and ERV growth of close to 5%, we have also seen a reduction in occupancy. The decrease in occupancy is a result of our lease expiry profile rather than a long-term structural trend, and reflects a few key lease events primarily within our industrial assets in the final half of the year. These lease events at Radlett and Rushden, which are high quality, well-located assets, make up over 40% of our vacancy and represent the two largest opportunities to capture reversionary upside in the portfolio and will drive income growth looking forward. We have received positive leasing interest in both these assets.

Operational excellence

Recognising our conservative balance sheet we have continued to use proceeds from asset disposals to extend our share buyback programme alongside ongoing reinvestment into the portfolio.

We continue to operate with a very strong debt book, with long-term fixed rate debt, priced below market rates. We refinanced our revolving credit facility at the start of the year but it was not drawn during the period, reflecting the improved cash position from asset disposals.

We are pleased to have maintained a cost ratio of 1.3% and managed our cost base in line with the prior year, excluding costs in relation to the Strategic Review.

Acting responsibly

During the year we revised our net zero strategy to reflect the progress made on the decarbonisation of our assets since 2019 and to ensure this aligns with our business objectives. We aim to reduce our Scope 1 and 2 emissions to net zero by 2035, whilst allowing more time to achieve an overall net zero target by 2045. The latter reflects the need for our own occupiers and suppliers to be part of the solution and the longer term engagement that this will require. This compares to a previous overall net zero target of 2040.

We have made very good progress decarbonising our office assets and recognising projects on-site currently, we expect 85% by value to have been fully or partially decarbonised and running on all electric systems by the end of this year. We now have 86% of the portfolio with EPC ratings A-C.

To mark our 20-year anniversary, we raised over £20,000 for The Royal Marsden Cancer Charity, which was particularly poignant as Jay Cable had been treated there over the past few years. We have sadly lost a great colleague and wonderful individual far too soon.

Equity capital markets

For some time the Board has been seeking to address the impact of the discount between share price and net asset value.

Throughout the course of the last year, real estate equities continued to trade at material discounts to their underlying asset value. The volatility in the market has been very sensitive to movements in interest rates, particularly as a result of instability in the wider financial markets.

Through our share buyback programme, we have prioritised investment into our own equity above new acquisitions and this has delivered a positive impact.

Strategic Review

As announced on 13 January, the Board launched a Strategic Review to consider all further options to maximise value for shareholders, therefore suspending our share buyback programme.

On 12 May 2026, a non-binding indicative all-share offer ('Proposed Offer') from LondonMetric Property Plc and Schroder Real Estate Investment Trust Limited was announced. The Company is engaging with all stakeholders, with negotiations and due diligence ongoing. Further details will be communicated in due course.

Outlook

Our portfolio, weighted to industrial, warehouse and logistics assets continues to be supported by a diverse occupier base, limited new supply pipeline, low obsolescence and low capital investment relative to other sectors.

Our portfolio has a current rent roll of £37.0 million, with additional rent frees and stepped rents accounting for £6.1 million. We have a further £8.8 million of vacancy, with the two largest industrial voids accounting for over 40% of that upside. In addition, there is £4.4 million of reversion across the portfolio where we can reset rents to market levels at future lease events. The majority of this upside comes from our industrial portfolio, where we remain confident in the sector fundamentals.

The Board has agreed to maintain the current dividend level and will review future increases following leasing progress within the portfolio.

The year ahead is a key one. Notwithstanding macroeconomic factors, the drivers of our future performance relate to an improvement in occupancy and delivering on asset management initiatives. We expect to end the year with a marked improvement in occupancy, with leasing success following asset upgrades and capturing the reversionary potential across the portfolio. This will all provide a significant platform for future earnings growth.

 

Michael Morris

Chief Executive

11 June 2026

 

 

Our Marketplace

Macroeconomic conditions remain uncertain despite a backdrop of reducing interest rates.

 

Economic backdrop

The first two months of 2026 were beginning to show signs of improvement across key economic indicators, but this was abruptly disrupted by the outbreak of conflict in Iran on 28 February.

The initial shock triggered market volatility and a surge in oil and gas prices, increasing inflation expectations and renewing cost of living pressures. Interest rate cuts are now expected to be paused or even reversed, keeping mortgage rates and borrowing costs elevated. There is now increased risk of weakened business confidence and slower economic growth, but this will depend on how long the conflict lasts.

The UK is particularly exposed given the reliance on imported oil and energy. Slower growth and higher borrowing requirements from the UK Government was already a challenging fiscal environment and having a bearing on the risk-free rate, a key determinant of commercial property yields. On the day before the conflict began the ten-year gilt yield was 4.3%. By the end of March it was 4.9% and has continued to experience volatility in reaction to the news cycle. The rising uncertainty within the UK Labour Government contributed to additional upward pressure pushing the ten-year gilt yield to over 5% for the first time since 2008.

Inflation has fallen significantly from its 2022 peak of 11.1% but is still above target. In March the ONS reported that annual CPI increased to 3.3%, driven primarily by higher motor fuel prices. By April, annual CPI had eased to 2.8%, but is expected to increase further during 2026 due to higher energy costs and other underlying price pressures.

The Bank of England has reduced the base rate by 150 basis points, from its August 2023 peak of 5.25% to 3.75% by December 2025. In April 2026, the Monetary Policy Committee decided to hold the base rate at 3.75%.

The labour market has softened, with vacancies falling and wage growth slowing. Annual wage growth in real terms was 0.3% for regular pay and 1.0% for total pay from January 2026 to March 2026. The unemployment rate for the same period was 5.0% compared to 4.5% a year ago.

Retail sales saw a temporary boost in March due to Easter and food-related spending which was reversed in April, with the British Retail Consortium recording a year-on-year decline of 3.4%. Increased uncertainty and concerns over higher living costs are causing consumers to be selective about discretionary spending.

Cautious consumer behaviour is also reflected in the household savings ratio, which at 9.9% is high by historic standards. However, this also indicates that there is potential for consumer demand to support a sustained recovery when uncertainty eases.

Despite the outlook being more challenging than it appeared at the start of the year, the UK has several underlying strengths that give reason for cautious optimism. Inflation is well below the recent peak, wage growth remains positive in real terms and interest rates are significantly lower than the 2023 highs. These factors should help support business, consumer and investor confidence and lead to a gain in momentum once geopolitical pressures subside.

UK property market

UK real estate investment volumes have been at a reduced level since 2023, but from this lower base, strengthened in 2025, surpassing levels recorded in the previous two years.

For the year ending March 2026, the total capital invested reached £61.4 billion. Overall, investment volumes increased 17% compared to the previous year but this was primarily driven by an increase in corporate rather than direct market activity. The fourth quarter of 2025 saw a marked acceleration, however, this momentum did not continue into the first quarter of 2026. By sector, industrial assets accounted for 24% of total activity and recorded a 32% year-on-year increase in investment volumes. Offices represented 23% of the total volume, rising 38% over the same period. Retail investment accounted for 14% of activity and declined 16% year-on-year.

The MSCI UK Quarterly Property Index recorded an All Property total return of 5.4% for the year to March 2026, driven by 0.6% capital growth and a 4.8% income return. This compares to the 6.2% total return for the year to March 2025.

Looking at the three main sectors, retail and industrial outperformed, achieving annual total returns of 7.6% and 6.1%, respectively. Meanwhile the office sector lagged, delivering an annual total return of 4.3%. The retail and industrial sector total returns were lower than the prior year, whereas the office sector saw a marked improvement.

All Property ERV growth was 3.2% for the year to March 2026, compared to 4.0% in the previous year. The industrial sector saw the strongest rental growth at 4.2%, followed by offices at 3.6% and retail at 2.8%.

12 months to March 2026	All Property	Industrial	Office	Retail
Total return	5.4%	6.1%	4.3%	7.6%
Income return	4.8%	4.4%	4.1%	5.8%
Capital growth	0.6%	1.6%	0.3%	1.7%
Number of positive segments	15	4	2	9
Number of negative segments	9	1	5	3
ERV growth	3.2%	4.2%	3.6%	2.8%
Number of positive segments	22	5	7	10
Number of negative segments	2	0	0	2

 

Source: MSCI UK Quarterly Property Index

 

 

Portfolio Review

 

Industrial weighting	67%
South East	47%
Rest of UK	20%

 

Office weighting	21%
London and South East	12%
Rest of UK	9%

 

Retail and Leisure weighting	12%
Retail Warehouse	8%
High Street	2%
Leisure	2%

 

Reducing low yielding office exposure, upgrading the portfolio and improving rental values.

 

Market backdrop

The year to March 2026 has seen mixed economic signals. On the one hand we have seen lower inflation and interest rates, but set against this, the impact of successive UK Budgets have weakened business confidence, and more latterly the uncertainty of rising energy costs as a result of conflict in the Middle East.

Occupational markets have been robust with a sense of improving demand through 2025. We have seen modest but positive rental growth in all three core markets. We continue to see leasing activity across all sectors, albeit asset specific factors, such as location and quality of accommodation, are key drivers of occupational demand with elevated levels of supply in some markets.

The investment market has been more muted since 2023, however, we are now seeing improved liquidity for well-positioned assets.

Overall property values have been relatively stable, with positive leasing and asset management activity providing momentum and offsetting adverse lease events.

Performance

For the year to March 2026, the total property return was 5.9%, outperforming the MSCI UK Quarterly Property Index which recorded a total return of 5.4%. We have outperformed the benchmark for 13 consecutive years and delivered upper quartile performance since launch, ranking in the 91 percentile. This outperformance was driven by both income return and capital growth.

Our portfolio income return was 5.2%, outperforming the MSCI income return of 4.8%. Capital growth was 0.7%, outperforming MSCI at 0.6%.

Portfolio summary	2026	2025	Like-for-like % change
Assets	46	47
Area	4.6m sq ft	4.6m sq ft
Occupancy	84%	94%
Total property return	5.9%	7.3%
Capital
Valuation	£700.8m	£723.1m	1.7%
Disposals	£34.5m	£51.0m
Acquisitions	-	£0.5m
Capital expenditure	£8.8m	£11.8m
Capital receipt	£2.4m	-
Equivalent yield	6.8%	6.8%
Income
Passing rent	£37.0m	£42.3m	-9.9%
Contracted rent	£43.1m	£48.2m	-8.1%
Void ERV	£8.8m	£3.4m	163%
Rental uplift to ERV	£4.4m	£4.0m	26%
ERV	£56.4m	£55.6m	4.8%

Capital growth

The portfolio valuation as at 31 March 2026 was £700.8 million, a like-for-like portfolio valuation increase of 1.7% or 0.7% after capital expenditure, underpinned by our industrial exposure.

Capital expenditure in the year was £8.8 million across multiple projects. These were primarily focused on refurbishment upgrades ahead of re-leasing and decarbonisation works at our office assets in Bristol, Colchester and Milton Keynes.

During the year we disposed of our lowest yielding office asset, Stanford Building, London, for £34.5 million, at a 1% premium to the March 2025 valuation, and acquired the freehold interest of our long leasehold Cardiff asset for £0.2 million which will tactically help unlock future redevelopment upside.

Income

At a headline level, portfolio rental income was lower this year than the previous year.

This was impacted by our asset disposal and also a number of key lease events, which are detailed further below. We do not believe our lower occupancy to be structural. The majority of our vacancy is under six months old, but it does have a direct correlation to income, not only by virtue of rental income but associated void holding costs, be that business rates, service charges or security.

In terms of portfolio activity, we have completed 27% more leasing transactions than the preceding year, and by rental value have completed 35% more lettings.

Recognising tougher operating conditions, we continue to work with our occupiers in a collaborative way, and where we have had occupier defaults, we have re-let 36% of the space.

As a result, over the year we have seen a reduction in like-for-like passing rental income of 9.9% to £37.0 million and a reduction in contracted rental income of 8.1% to £43.1 million, reflecting lower occupancy.

Reversion

Following our asset upgrades, transactional evidence and market rental growth, we have seen a 4.8% like-for-like increase in the estimated rental value to £56.4 million.

The portfolio has reversionary potential of £19.3 million, of which £6.1 million is achieved through contractual rental uplifts, £4.4 million is from rental uplifts to ERV on lease events, and £8.8 million is from leasing our void units.

Portfolio activity

Our programme of targeted capital investment, a selective disposal and active leasing has generated a positive valuation movement and increased reversionary potential. We have completed 99 active management transactions, securing uplifted rents ahead of March 2025 ERV.

‒      33 lettings or agreements for lease, securing additional rent of £3.9 million, 4% ahead of ERV

‒      43 lease renewals or regears, securing £4.7 million per annum, an uplift of £0.4 million, 10% ahead of passing rent

‒      17 rent reviews, securing an uplift of £0.4 million per annum, 18% ahead of passing rent and 4% ahead of ERV

‒      Six lease variations to remove occupier break options, securing £0.6 million per annum and extending the average lease term by four years

Occupancy

Our occupancy over the year has reduced to 84% from 94% in March 2025. This compares with the MSCI UK Quarterly Property Index of 91%.

Lower occupancy at the year-end reflected a concentration of lease events during 2025 and we do not believe this is a long-term structural trend.

Re-leasing our two key industrial voids will see this position reverse and align with our five-year average occupancy which has been over 90%. The total void ERV is £8.8 million.

Retention

Over the year to March 2026, total ERV at risk due to lease expiries or break options totalled £11.3 million. This figure excludes the disposal during the year.

We retained 35% of the ERV at risk, or 44% where leases were surrendered, principally in Chatham and Radlett. Of the ERV not retained, 9% (£1.0 million) was re-let to new occupiers during the year. In addition, £3.5 million of ERV was secured through lease extensions, break removals or back-to-back lease surrenders and re-lettings, where lease events were dated after the year end.

Summary and outlook

The commercial property market has been subdued, recognising both global and domestic headwinds. However, we have seen positive valuation movement and growth in rental values over the period.

The occupational markets in particular, have shown resilience in the face of external pressures. Following the structural repricing over recent years of the retail and office sectors in particular, there has been a greater depth of investor demand across a variety of assets.

As we look forward, inflation, interest rate movement and cost of capital will be the key drivers for market liquidity and capital values. At present, visibility on these remains unclear as a result of geopolitical events and impact on supply chains and capital flows. We expect supply levels and investment transaction volumes to remain muted until a clear pathway is established. In addition, increases in construction costs will further restrict the supply of new developments in an already constrained market.

We expect occupational markets to continue to demonstrate resilience in the face of external pressures but demand will continue to focus on strong geographies and high quality assets that meet occupiers' requirements. Restricted supply of new developments will enable further rental growth for the best space across most markets and geographies.

The portfolio has significant reversion, which we believe can be unlocked within the next 12 months and we remain focused on growing income and creating value.

We are encouraged by leasing activity and the rents being achieved where we have invested capital to upgrade assets ahead of re-leasing, the proof of which has been demonstrated by the ERV growth during the year. We are on-site refurbishing space that became available during the year and have a good pipeline of leasing interest across all sectors within the portfolio.

 

Tim Hamlin

Head of Asset Management

11 June 2026

 

 

Industrial

Strong ERV growth driven by asset management activity.

 

	2026	2025	Like-for-like % change
Assets	19	19
Area	3.3m sq ft	3.2m sq ft
Occupancy	87%	99%
Total property return	5.5%	8.7%
Capital
Valuation	£468.7m	£463.2m	1.2%
Disposal proceeds	-	-
Acquisitions	-	£0.5m
Capital expenditure	£2.8m	£3.0m
Equivalent yield	5.9%	5.6%
Income
Passing rent	£21.0m	£22.6m	-7.1%
Contracted rent	£23.3m	£25.7m	-9.1%
Void ERV	£4.2m	£0.4m	894%
Rental uplift to ERV	£3.7m	£3.4m	9.8%
ERV	£31.2m	£29.5m	5.9%

 

Market backdrop

The industrial and logistics sector has seen modest capital growth throughout the year. However, the main driver of growth has again been movements in income as rents are reset on lease events.

Overall, investment transaction volumes have been driven by a shortage of supply of suitable assets rather than a lack of demand.

Occupational demand has been resilient with a noticeable improvement in demand in the latter half of the year. Speculative development remains restricted and areas of oversupply are starting to reduce as a consequence.

Key activity

Our industrial assets increased in value by 1.2% over the year, to £468.7 million. Contracted rent has reduced by 9.1% to £23.3 million and the ERV grew by 5.9% to £31.2 million. Occupancy has reduced from 99% to 87%.

During the year, the occupier at Rushden exercised their break option and this represents the largest single reversionary opportunity within the portfolio with an ERV of more than 50% above the previous passing rent. We received a payment of £2.5 million in accordance with their lease terms and this will enable upgrade works to the building ahead of re-leasing.

At Radlett, an occupier vacated a unit where we received £1.1 million in lease surrender and dilapidations payments and the ERV is more than 20% above the previous passing rent. Marketing has commenced for both units with good interest.

Over the year we completed £6.5 million of lease transactions at an average of 4% ahead of the March 2025 ERV. Of these £1.8 million were new lettings, 6% ahead of ERV, £2.8 million were lease renewals or regears, 7% ahead of ERV and 32% ahead of the previous rents. A further £1.3 million of rent reviews were completed, securing a rental uplift of £0.3 million, 6% ahead of ERV and 31% ahead of the previous rent. In addition, we removed five break options securing £0.6 million.

Key transactions in the year included:

‒      Harlow - lease regear with the largest occupier securing a ten-year term subject to breaks with penalty payments at £1.0 million, 25% ahead of the passing rent and 10% ahead of March 2025 ERV. We also surrendered a lease and simultaneously re-let the unit for £0.6 million per annum, 5% ahead of the previous passing rent and 4% ahead of March 2025 ERV

‒      Radlett - lease renewal securing £0.3 million per annum, 64% ahead of the previous passing rent and 6% ahead of March 2025 ERV

‒      Additionally, we completed lettings in Radlett, Gloucester, Winnersh, Datapoint, London, Luton and Warrington for a combined £0.8 million per annum, 8% ahead of March 2025 ERV

Outlook

The industrial portfolio currently has £10.2 million of reversionary income potential: £2.3 million from contractual uplifts, £3.7 million from market reversion and £4.2 million from leasing void units.

Demand at our multi-let industrial assets remains resilient, and we continue to capture reversionary potential at lease events with further rental growth over the period.

Our vacancies at Rushden and Radlett comprise the largest income upside. We continue to see rental growth in the sector, albeit at a lower rate than in recent years.

 

 

Office

Our asset upgrade programme has delivered leasing results with £1.8 million of new lettings ahead of ERV, and an encouraging pipeline.

 

	2026	2025	Like-for-like % change
Assets	13	14
Area	0.6m sq ft	0.7m sq ft
Occupancy	75%	86%
Total property return	5.3%	1.6%
Capital
Valuation	£146.3m	£175.3m	3.5%
Disposal proceeds	£34.5m	£51.0m
Acquisitions	-	-
Capital expenditure	£5.9m	£8.1m
Equivalent yield	9.1%	8.2%
Income
Passing rent	£10.4m	£14.0m	-18.1%
Contracted rent	£12.3m	£14.9m	-9.9%
Void ERV	£4.4m	£2.6m	73%
Rental uplift to ERV	£0.9m	£1.2m	32.2%
ERV	£17.6m	£18.7m	4.3%

 

Market backdrop

Office capital values continued to weaken during the year, albeit the rate of decline was significantly more muted relative to prior years.

Investment transactions have been focused on either well-located, high quality assets or peripheral buildings more suited to alternative uses.

There has been almost no new development in the majority of office markets outside of central London and other large regional cities. At the same time there remains an oversupply of secondary space relative to occupational demand which is leading to vacancy and downward rental pressures, whilst prime assets are still seeing leasing activity and rental growth.

Key activity

During the year we completed the disposal of a low yielding central London office asset (following the three office disposals last year) at a 1% premium to the March 2025 valuation, which has reduced our office exposure to 21%.

The value of our office assets has increased on a like-for-like basis by 3.5% over the year to £146.3 million.

We have continued to invest to improve the quality of our office space and deliver better occupier amenities.

Our asset upgrades, leasing transactions and the impact of a market with a shortage of high quality space have driven rental growth which has seen the ERV increase by 4.3% to £17.6 million.

Following an active management surrender at Chatham, and space becoming available at Farringdon, London and Metro, Manchester, our office occupancy fell to 75% from 86%. The passing rent on our retained office assets reduced by 18% to £10.4 million, and the contracted rent reduced by 10% to £12.3 million.

Over the year we completed £4.4 million of lease transactions at an average 2% ahead of the March 2025 ERV. Of these, £1.8 million were new lettings, 3% ahead of ERV and £1.4 million were lease renewals or regears, 1% ahead of ERV and 9% ahead of the previous rent. We also settled five rent reviews securing an uplift of £0.1 million, 9% ahead of passing rent and 1% ahead of ERV.

We have completed £1.8 million of leasing transactions as a direct result of our refurbishment upgrades, 3% ahead of March 2025 ERV.

Key transactions in the year included:

‒      Colchester Business Park - leased three of the four suites at Building 200 at £0.5 million, 7% ahead of the March 2025 ERV

‒      Tower Wharf, Bristol - leased two suites at £0.3 million, in line with the March 2025 ERV

‒      Metro, Manchester - secured a renewal and new letting of £0.4 million, 4% ahead of the previous rent and 7% ahead of the March 2025 ERV

Outlook

Our office assets have a reversionary yield in excess of 11%. The reversionary potential is £7.2 million, with £1.9 million from contractual uplifts, £0.9 million from resetting to market rents and £4.4 million from leasing vacant space.

Whilst pricing has stabilised, the sector remains polarised. We expect strong rental growth to continue at the best buildings and locations as new supply is likely to remain constrained. The weakest locations and buildings will continue to suffer from weak occupational demand requiring an alternative use.

 

 

Retail and Leisure

We continue to see high levels of occupancy at our retail assets and have unlocked additional value via lease restructures.

 

	2026	2025	Like-for-like % change
Assets	14	14
Area	0.7m sq ft	0.7m sq ft
Occupancy	96%	94%
Total property return	10.1%	14.1%
Capital
Valuation	£85.8m	84.6m	1.4%
Disposal proceeds	-	-
Acquisitions	-	-
Capital expenditure	£0.1m	£0.7m
Capital receipt	£2.4m	-
Equivalent yield	7.9%	7.9%
Income
Passing rent	£5.6m	£5.7m	-2.5%
Contracted rent	£7.5m	£7.6m	-1.7%
Void ERV	£0.3m	£0.4m	-28.8%
Rental uplift to ERV	-£0.2m	-£0.6m	60.4%
ERV	£7.6m	£7.4m	1.4%

 

Market backdrop

Retail capital values have shown modest overall growth over the year, with selective rental growth in certain sub-markets including central London and retail parks in particular.

Investment demand has focused on the retail warehouse sector which is supported by consumer behavioural patterns, and locally dominant high street and shopping locations.

Occupationally, the sector shows remarkable resilience in the face of domestic political headwinds and broader cost pressures. However, some structural issues remain and the sector remains polarised between locations with strong footfall and disposable income that support rental growth, and more peripheral locations unable to attract customers.

Rents in the sector have broadly rebased and we have seen rental growth at key high street locations. Occupier defaults have remained at fairly low levels, and notably much of the space returned has been absorbed by other operators, in some instances at higher rental levels.

The sector offers opportunities but asset selection and the ability to maintain income is key.

Key activity

Our retail assets are predominantly retail warehouse, underpinned by value-led retailers, and make up 8% of the total portfolio. They consist of 19 units across four parks with two vacant units in Swansea. Our high yielding high street portfolio makes up 2% of the total portfolio, and leisure comprises 2%.

Our retail assets increased in value by 1.4% over the year to £85.8 million, and the ERV grew by 1.4% to £7.6 million, mainly as a result of leasing transactions. Occupancy increased from 94% to 96%.

The contracted rent reduced by 1.7% to £7.5 million, partly due to a lease restructure involving receipt of a capital payment of £2.4 million, and also the re-letting of space following the expiry of an over-rented lease.

Over the year we completed £1.0 million of lease transactions at an average 2% ahead of the March 2025 ERV. Of these, £0.3 million were lettings, 4% ahead of ERV, £0.5 million were lease renewals or regears, 1% below ERV, three rent reviews at £0.2 million securing an uplift of 1% against the previous rent and a break removal.

Key transactions in the year included:

‒      Bristol - leased a unit and renewed two leases at £0.3 million, 5% ahead of the March 2025 ERV

‒      Leeds - surrendered and simultaneously re-let a unit at £0.1 million, 64% ahead of the previous rent and 27% ahead of the March 2025 ERV

‒      Carlisle - restructured the hotel lease (lower rent, longer term), in return for a premium of £2.4 million

Outlook

Our retail and leisure assets have reversionary potential of £2.0 million, of which £1.9 million is contractual uplifts, £0.2 million of over-rented leases approaching expiry and £0.3 million of vacant units.

The sector offers attractive income characteristics with growth potential. However, the ownership structure of many retailers magnifies the risks in the event of continued economic pressures. Investment demand is likely to focus on dominant, structurally supported locations, and strong covenant-backed cash flows.

 

 

Our top ten properties, which are each valued in excess of £20 million represent 58% of the portfolio value.

Site	Property type	Approximate area (sq ft)	Capital value (£m)	Occupancy rate (%)	EPC rating
Parkbury Industrial Estate, Radlett	Industrial	337,900	>100	82	A-D
River Way Industrial Estate, Harlow	Industrial	464,800	75-100	99	A-D
Shipton Way, Rushden	Industrial	312,900	30-50	0	C
Datapoint, Cody Road, London E16	Industrial	55,100	30-50	90	B
Lyon Business Park, Barking	Industrial	99,400	20-30	100	B-D
50 Farringdon Road, London EC1	Office	31,300	20-30	61	B
Tower Wharf, Cheese Lane, Bristol	Office	70,600	20-30	90	B-C
Sundon Business Park, Dencora Way, Luton	Industrial	127,800	20-30	93	A-D
Trent Road, Grantham	Industrial	336,100	20-30	100	C
The Business Centre, Wokingham	Industrial	95,800	20-30	97	B-D

 

 

Diverse occupier base

Companies House classification	Contracted rent %
Wholesale and retail trade	25%
Manufacturing	14%
Information and communication	11%
Administrative and support service activities	10%
Professional, scientific and technical activities	9%
Transportation and storage	7%
Public sector	4%
Accommodation and food service activities	4%
Arts, entertainment and recreation	3%
Construction	3%
Financial and insurance activities	3%
Education	3%
Other	4%
Total	100%

 

 

Longevity of income

This was improved over the year and, as at 31 March 2026, expressed as a percentage of contracted rent, the average length of leases to first termination was 5.4 years (2025: 4.9 years). This is summarised as follows:

	%
0 to 1 year	14.9%
1 to 2 years	8.2%
2 to 3 years	13.9%
3 to 4 years	16.9%
4 to 5 years	11.8%
5 to 10 years	20.9%
10 to 15 years	12.0%
15 years or more	1.4%
Total	100.0%

 

 

Financial Review

This year we have delivered EPRA earnings of £21 million and a profit after tax of £26 million.

 

Our focus at the outset of the year was to reduce exposure to lower yielding assets and recycle capital from disposal proceeds into more attractive risk-adjusted investments, including share buybacks to deliver shareholder value.

Earnings growth which supports an increasing, covered and sustainable dividend continues to be our main focus in a volatile and higher interest rate environment.

This year we have delivered EPRA earnings of £20.9 million and a profit of £25.9 million. It has been a more challenging year to deliver earnings growth due to our lease expiry profile, however, we believe the portfolio is well-positioned in the medium to long-term as demonstrated by the reversionary potential and 5% ERV growth during the year.

Whilst EPRA earnings are lower this year, we have seen continuing modest but positive valuation movements, as well as the disposal of our largest office asset for £34.5 million, 1% above March 2025 valuation. These disposal proceeds have been used to reinvest in the portfolio and return capital to shareholders through our share buyback programme which has been accretive, on a pence per share basis, to EPRA earnings and EPRA NTA.

Our balance sheet remains robust and our financial position has been strengthened by the surplus cash from disposal proceeds, low loan to value ratio and £50 million undrawn revolving credit facility.

EPRA earnings

EPRA earnings decreased by 4% to 4 pence per share during the year as a result of lower occupancy impacting net property income. We were pleased to maintain the administration costs in line with the previous year, and only see a small increase in the net finance costs. This analysis is set out below.

EPRA earnings	2026 £m	2025 £m
Rental income	41.2	43.5
Property costs	(7.5)	(6.5)
Other income	2.1	0.7
Net property income	35.8	37.7
Administration costs1	(7.1)	(7.1)
Net finance costs	(7.8)	(7.7)
EPRA earnings	20.9	22.9
EPRA earning per share (pps)	4.0	4.2

1.   Excluding accrued Strategic Review costs of £0.6 million.

Net property income

Net property income was £35.8 million, a decrease of 5% from the previous year due to:

‒      Industrial occupancy: our occupier in Rushden exercised their break in October 2025 resulting in reduced rental income, but represents the largest reversionary potential within the portfolio. We received a break penalty of £0.8 million to offset the lost income and acceleration of lease incentives. Excluding Rushden, we saw net property income growth of 5% across the remainder of the industrial portfolio

‒      Office occupancy: reduced occupancy at Farringdon Road, London, Chatham and Metro, Manchester, where the space has undergone, or is undergoing refurbishment for re-leasing

‒      Retail and leisure rent rebasing and the occupier lease regear at the hotel in Carlisle

This analysis is set out below.

Net property income analysis	£m
Net property income in the year to 31 March 2025	37.7
Impact of disposals	-
Rushden occupier break	(1.2)
Industrial net property income movement (excl. Rushden)	1.1
Office net property income movement	(1.0)
Retail and leisure net property income movement	(0.8)
Net property income in the year to 31 March 2026	35.8

 

Rent collection

We continue to be focused on rent collection, with 99% received during the financial year.

In recognition of a tougher trading environment for our occupiers, we have sought to agree payment plans where necessary and maintain a low arrears position. During the period we have written off arrears of £0.3 million where an occupier went into administration.

Administration costs and cost ratio

Administration costs, excluding the Strategic Review, have remained in line with the prior year. The Group cost ratio has been maintained at 1.3%. We remained focused on managing our cost base and sought to reduce costs wherever possible.

Our EPRA cost ratio (excluding direct vacancy costs) has increased from 22% to 25% during the financial year in part due to the write-off of occupier incentives arising from reduced occupancy over the financial year.

Net finance costs

Our net financing costs have increased from £7.7 million to £7.8 million as a result of lower interest income during the year. Our interest expense is fixed, as 100% of the debt drawn is under our long-term fixed rate facilities.

Dividends

In May 2025, we announced an increase in the dividend to 3.8 pence per share, a 2.7% increase. Dividend cover is 103%.

The Board recognises the importance of dividend growth and will continue to review the dividend level going forward.

 

Balance sheet

Net asset value

The Group's net asset value as at 31 March 2026 was £522 million, or 102 pence per share. This reflected an increase of 2% or 2 pence per share over the financial year. The analysis of the net asset value movement is set out below.

Net asset value movement	EPRA NTA £m	EPRA NTA pence per share
March 2025 net asset value	533.4	100.0
EPRA earnings	20.9	4.0
Portfolio valuation	6.6	1.3
Loss on disposals	(1.0)	(0.2)
Strategic Review costs	(0.6)	(0.1)
Employee share-based awards	0.7	0.2
Shares purchased by Employee Benefit Trust	(0.9)	(0.2)
Share buyback	(17.3)	1.0
Dividends paid	(19.8)	(3.8)
March 2026 net asset value	522.0	102.2

 

The below table reconciles the net asset value calculated in accordance with International Financial Reporting Standards (IFRS) with that of EPRA.

EPRA analysis	2026 £m	2025 £m	2024 £m
Net assets - IFRS and EPRA net tangible asset value	522.0	533.4	524.5
Fair value of debt	21.9	26.1	24.7
EPRA net disposal value	543.9	559.5	549.2
Net asset value per share (pence)	102	100	96
EPRA net tangible asset value per share (pence)	102	100	96
EPRA net disposal value per share (pence)	107	105	101

 

Portfolio valuation

The property valuation was £700.8 million, an increase of 1.7% on a like-for-like basis, excluding Stanford Building, London WC2, which was sold in the year. This equates to 0.7% including net capital expenditure, being £8.8 million of capital expenditure incurred less the £2.4 million premium received on the lease regear at the hotel in Carlisle. The lease regear resulted in a reclassification of the hotel in Carlisle from investment property to a finance lease receivable.

During the year, we have continued to upgrade our portfolio with £8.8 million incurred principally on the office assets to increase occupier demand and unlock rental income increases and capital values over the medium to longer-term.

Disposals

We disposed of Stanford Building, London WC2, our largest office asset, for gross proceeds of £34.5 million, 1% above the March 2025 valuation, prior to sale costs and lease incentive adjustments. On completion of the sale, we simultaneously entered into a lease of the first floor which is now classified as a right of use asset, rather than owner occupied.

The proceeds were released from the security pool in full and used to increase the share buyback programme and to reinvest in the portfolio.

Financing

Total borrowings were £208.1 million at 31 March 2026, with the loan to value ratio at 23.5%. The weighted average interest rate on our borrowings was 3.7% and the average loan duration was 5.7 years.

The fair value of our drawn borrowings at 31 March 2026 was £186.2 million, lower than the book value by £21.9 million, or an additional 5 pence per share. Market financing rates continue to be higher relative to the fixed rates on our long-term loans.

We have strong banking relationships with our lenders; the Group has remained fully compliant with its loan covenants and has made scheduled amortisation payments during the year of £1.6 million.

Summary of borrowings

	2026	2025	2024
Fixed rate loans (£m)	208.1	209.6	211.1
Drawn revolving facility (£m)	-	-	16.4
Total borrowings (£m)	208.1	209.6	227.5
Borrowings net of cash (£m)	164.8	174.3	207.7
Undrawn facilities (£m)	50.0	50.0	33.6
Loan to value ratio (%)	23.5	24.1	27.9
Weighted average interest rate (%)	3.7	3.7	3.9
Average duration (years)	5.7	6.7	7.2

 

Cash flow and liquidity

During the year, our cash balances increased to £43.3 million, mainly due to the disposals during the year. The cash flow from operating activities this year was £21.6 million and dividends paid were £19.7 million.

Net disposal proceeds of £33 million have primarily been used to repurchase and cancel shares (£17.3 million) and invest in the property portfolio (£8.8 million). The remaining proceeds will be used to fund future capital expenditure.

Share buyback programme

We continued with the share buyback programme announced on 30 January 2025. We increased the programme from £10 to £30 million during the year, with buybacks of £17.3 million, at an average discount of 25% to the March 2026 NAV. In total, 33.8 million shares were purchased and cancelled since the start of the programme, at a cost of £24.8 million, at an average price of 74 pence. This total equates to a 28% discount to the March 2026 NAV per share and has been accretive to both earnings and NAV, on a pence per share basis.

The share buyback programme was suspended following the announcement of the Strategic Review in January 2026.

Employee Benefit Trust

The Company's Employee Benefit Trust (EBT) purchased 1,200,000 shares during the year and holds 3,119,446 shares as at 31 March 2026. Shares are held by the EBT to hedge awards outstanding under employee share schemes. As the Trust is consolidated into the Group's results, these shares are effectively held in treasury and therefore have been excluded from the net asset value and earnings per share calculations, from the date of purchase.

 

Saira Johnston

Chief Financial Officer

11 June 2026

 

 

Managing Risks

The Board recognises that there is inherent risk that could have a material impact on the Group's operations and is committed to effective risk management to protect stakeholder value.

 

Macroeconomic and geopolitical challenges have continued into 2026 which has provided some uncertainty around interest rates and inflation. Our approach to risk management remains key to managing our ongoing operations and performance, as well as positioning ourselves to take advantage of the changing landscape in the medium and long-term.

Risk management framework

The Board reviewed its Risk Management Policy in 2025 and has continued to operate in line with this policy during the year. The Board has ultimate responsibility for risk management and adopts a structured approach to considering risks which informs its decision making.

The Board has reviewed its principal risks and has added cyber risk as a principal risk based on the risk scoring framework in place. This reflects the increasing number of cyber events causing business interruption generally, rather than any specific changes to our operating environment. During the year, we have updated our cyber certifications and worked with our property managers to better understand how risk is managed in our supply chain.

The Board also reviewed changes in risk trends and in particular notes the increased risk scores attached to our discount and ability to attract capital and occupier risks. The impact of the continuing discount and inability to attract capital increased during the year and has been a key consideration in the decision to commence a Strategic Review in January 2026. From a portfolio perspective, the Board is monitoring the increase in vacancy and leasing activity. The Board views the decrease in occupancy as a short-term timing issue due to the lease profile of the portfolio rather than a medium or long-term structural trend.

The Board has also considered its risk appetite to help manage risks and operations. The risk appetite may change over time and at different points in the property cycle, but the overall appetite for risk remains low and aligned to our long-term strategic objectives.

The Board considers the prolonged period of trading at a significant discount to NAV and the current level of occupancy to be nearing its risk parameter and this is an area of focus looking ahead.

 

Responsibilities

Board

The Board has ultimate responsibility for risk management and internal controls within the Company as well as determining the risk appetite. The Board reviews the Risk Management Policy at least annually and will ensure that it is aligned with the Company's strategic priorities.

Audit and Risk Committee

Responsible for overseeing the development and implementation of the Risk Management Policy, including a six-monthly or as necessary, review of the existing principal and emerging risks alongside mitigating controls and their effectiveness. The Audit and Risk Committee will report to the Board on such matters.

Executive Committee

The Executive Committee is responsible for detailed risk assessment including maintaining a risk matrix setting out risks, detailed controls and risk appetite as well as embedding a culture of risk awareness in relation to day-to-day operational matters.

Management committees

Support the Executive Committee in these matters. The Transaction and Finance Committee has oversight of all property transactions and the Responsibility Committee specifically has input on the ESG risks across all areas.

Principal Risks

The principal risks have the potential to affect the business meeting its strategic objectives materially. These are summarised in the table below, which also includes commentary on updates of any changes during the year.

Emerging risks

The Board has incorporated emerging risks into its principal risks and considers this to be an appropriate way of reporting and managing these, recognising that these elements are rapidly evolving and harder to predict.

The risk matrix includes additional commentary on emerging risks, and we continue to monitor these to determine how they will affect us, our occupiers and wider stakeholders.

We continue to monitor the impact of the conflict in the Middle East and the evolving geopolitical landscape's impact on investor sentiment and return expectations.

We are also cognisant of the impact of technology, and shifting consumer trends on our occupiers in adapting our portfolio and sector mix.

Finally, we will continue to assess the impact of any new but unknown changes in legislation which may impact the cost and returns across our portfolio.

 

Market
A. Economic market conditions
The Company's performance is adversely impacted by wider economic factors such as inflation, interest rates, political changes, recession and geopolitical events.	Impact Investors required return increases and there is a difference between the Company's achieved returns compared to investors' return requirements. Occupiers' businesses are adversely impacted by poor economic conditions. Inflation impacts the Company's cost base.	How is the risk managed The Board considers economic and market conditions when reviewing its strategy and making investment decisions. The Board has continued its focus on capital allocation and reinvesting disposal proceeds during the year into attractive areas on a risk return basis, including the share buyback programme.	Commentary Current macroeconomic conditions and geopolitical events mean the outlook continues with some uncertainty. The outlook for GDP growth, inflation, the labour market and other factors will influence the central bank's decision making on interest rates. Emerging risks: Geopolitical risk is heightened given the conflict in the Middle East which, combined with higher energy prices, may lead to a higher volatility, inflation and interest rate environment for a prolonged period.
Overseen by Board Risk trend: Increasing Link to strategic pillars: 1. Portfolio Performance 2. Operational Excellence 3. Acting Responsibly
B. Discount and ability to attract capital
The Company's share price discount to NAV will persist or widen and there is insufficient appetite from new or existing shareholders to support an equity raise or growth.	Impact A share price discount will prevent the Company raising more equity which adversely affects the Company's ability to achieve economies of scale from an internally managed model. Shareholder dissatisfaction increases susceptibility to corporate activity/interest. Unable to attract broader coverage from analysts/rating agencies/investors due to scale.	How is the risk managed The level of discount relative to the NAV is closely monitored by the Board. The Board has prioritised the allocation of disposal proceeds to its share buyback programme with a total programme commitment of £30 million. Proactive push to widen shareholder base with brokers and increase shareholder engagement, for example, increasing the frequency and number of webinars.	Commentary The Board believes that the Company's share price has not, for a sustained period of time, adequately reflected the intrinsic value of the Company and its assets. The Company announced a Strategic Review on 13 January 2026 in order to explore options available to maximise value for shareholders.
Overseen by Board Risk trend: Increasing Link to strategic pillars: 1. Portfolio Performance 2. Operational Excellence 3. Acting Responsibly

 

Portfolio
C. Portfolio strategy
Diversification across geographies and 'traditional' sectors may lead to the Company's portfolio delivering below MSCI/peer group performance.	Impact Underperformance vs peer group and insufficient clarity to investors on return profile. The Company is unable to meet investors' required returns and is perceived to hold sectors/assets which generate lower returns than either the overall benchmark or specialists.	How is the risk managed The composition of the portfolio is reviewed regularly alongside market trends to determine whether a pivot in sector or geography weightings is appropriate. Annual asset-level business plans are completed with forecast returns. Team remuneration is linked to MSCI and peer performance.	Commentary The Group has sought to reduce exposure to the office sector and recycle capital from lower yielding assets. The disposal of the largest office asset, Stanford Building, completed in September 2025 for £34.5 million at a 1% premium to 31 March 2025 valuation. The portfolio is most concentrated in the industrial sector. The portfolio has outperformed the MSCI UK Quarterly Property Index this year. Emerging risks: Technological change and the impact of Artificial Intelligence may mean assets do not meet future occupier demand.
Overseen by Board Risk trend: No change/stable Link to strategic pillars: 1. Portfolio Performance 2. Operational Excellence 3. Acting Responsibly
D. Investment
Lack of acquisitions or reinvestment opportunities that are accretive to returns. Where suitable investments can be identified, there may be pricing competition which affects the ability to transact. Issues not identified in due diligence.	Impact Underperformance in the property portfolio. Unable to recycle capital and reprofile returns and/or yield on the portfolio.	How is the risk managed The team is actively engaging with the market, seeking new deals and building an investment pipeline. Acquisitions are subject to Board-level approval and post-acquisition reviews are carried out after two years.	Commentary We have evolved our capital allocation strategy, deprioritising new acquisitions at present and allocating capital to increase the share buyback programme. MSCI recorded a 17% increase in transaction volumes in the year to March 2026, albeit investment volumes were boosted by portfolio and corporate deals.
Overseen by Board Risk trend: Decreasing Link to strategic pillars: 1. Portfolio Performance 2. Operational Excellence
E. Occupiers
Occupier defaults, increasing numbers of lease breaks actioned. Poorer occupational property market.	Impact Immediate impact on earnings and dividend capacity. Risk of bank covenant breaches.	How is the risk managed The property portfolio is diversified across sectors, assets and occupiers. Our occupier focused approach, underpinned by our key Picton Promise commitments, ensures strong occupier engagement, evidenced by our annual occupier survey. Monthly meetings monitor property manager performance, with weekly rent collection reporting.	Commentary During the year, two industrial occupiers exercised their break options, which in part caused occupancy to reduce from 94% to 84%, despite an increased number of new lettings/renewals over the year. The Board views the fall in occupancy as a short-term timing issue rather than a medium or long-term structural trend. The assets are of a high quality and well located and we therefore remain confident occupancy will increase in the near-term. The occupier market has remained resilient, with MSCI reporting five consecutive years of robust levels of rental growth to March 2026. Our rent collection rate is 99%.
Overseen by Board Risk trend: Increasing Link to strategic pillars: 1. Portfolio Performance 3. Acting Responsibly
F. Valuation
Property valuations are subjective and dependent on geopolitical, macroeconomic and cyclical factors, such as inflation and interest rates in addition to structural changes in certain sectors and regions.	Impact Decreasing valuations reduce investor confidence and share price. Volatile or unsupportable valuations could lead to loss of investor confidence in the NAV. Risk of bank covenant breaches.	How is the risk managed The properties are valued quarterly by an independent valuer in accordance with the Royal Institution of Chartered Surveyors Red Book valuation standards, with oversight from the Property Valuation Committee, which facilitates an in-depth quarterly review. Mandatory valuation rotation with a maximum of five years for an individual and ten years for a firm. No development or land.	Commentary Commercial property values have stabilised during the year and headroom exists on banking covenants. Knight Frank was appointed as external valuer effective June 2025 due to mandatory valuer rotation and the transition has been smooth. The Board notes the additional disclosure in the Knight Frank valuation report regarding the conflict in the Middle East and will continue to monitor the impact of the macroeconomic environment on the valuation.
Overseen by Property Valuation Committee Risk trend: No change/stable Link to strategic pillars: 1. Portfolio Performance

 

Finance and tax
G. Liquidity and working capital
The Company requires cash flows from rental income and contractual lease payments in order to meet its liabilities to lenders, suppliers and dividend payments to shareholders.	Impact Insufficient cash to meet liabilities which may mean delayed payments to suppliers and insufficient cash for dividends payments.	How is the risk managed The revolving credit facility (RCF) allows flexibility to draw, repay and manage working capital, capital expenditure and disposal/acquisitions. The Board reviews quarterly cash flow forecasts.	Commentary We refinanced the RCF with NatWest, extending the maturity for an initial term of three years with two further one-year extension options. The RCF is undrawn but provides operational flexibility and opportunity for investment. Surplus disposal proceeds from the sale of Stanford Building have been retained to fund capital expenditure.
Overseen by Executive Committee Risk trend: No change/stable Link to strategic pillars: 2. Operational Excellence
H. Gearing
Potential to enhance returns but in falling markets there may also be an adverse impact on performance. A breach of debt covenants or failure to manage refinancing events could lead to a funding shortfall. Cost base exposed to interest rate risk.	Impact Loan amounts become immediately due in the event of a breach or a refinancing which may have to be resolved by forced asset sales or penal interest rates. Increased cost base if interest rate increases.	How is the risk managed The Board reviews quarterly cash flow forecasts and loan covenants. Interest rate hedging is in place through the fixed rate loans. We have a diverse lender base and longstanding relationships.	Commentary Gearing has been maintained at a modest level of 24% during the year. The RCF has been refinanced and the maturity extended for an initial term of three years with two further one-year extension options. Debt maturity is 5.7 years.
Overseen by Board Risk trend: No change/stable Link to strategic pillars: 2. Operational Excellence

 

Other
I. Regulatory compliance
The Company must comply with a wide range of legislation and regulation including health and safety, tax and listing rules, environmental reporting and accounting matters. New or revised legislation or regulations may have an adverse impact on operations and increase costs.	Impact Financial loss and reputational damage or REIT status withdrawn. Litigation, fines and reputational damage from health and safety failures. Additional costs as a result of increasing legislation and loss of shareholder confidence as a result of any breaches.	How is the risk managed Appointment of Deloitte as tax advisers. The Board monitors changes to legislation with its professional advisers and through industry bodies such as the Better Buildings Partnership and Real Estate UK. The governance structure supports this further with the Health and Safety and Responsibility committees.	Commentary Planning reforms have been beneficial to our change of use strategy and securing planning permission for alternative use at four office assets. The UK Government continues to support the REIT regime and its focus to decarbonise and transition to net zero. The new Renters Rights Act 2026 does not impact our portfolio. Emerging risks: Increase in new regulation and/or legislation constrains returns, such as the proposed ban on upwards only rent reviews.
Overseen by Board Risk trend: No change/stable Link to strategic pillars: 2. Operational Excellence 3. Acting Responsibly
J. Operational
A small team with higher key person reliance and simple operational structure which may be impacted by a major event/business disruption.	Impact Loss of certain individuals will have a material impact on operations and shareholder engagement/market perception. An unexpected business disruption event would have an adverse financial impact and restrict the ability to operate.	How is the risk managed A succession plan is in place and reviewed annually. We have in place an employee remuneration structure that supports retention. We continue to engage with our employees through our Board and open culture.	Commentary During the year, we focused on embedding additional asset management resource into the team. In light of the Strategic Review, the designated Director for employee engagement has held one-to-ones with employees and sought individual feedback on related matters. We reviewed our Employee Handbook, Incident Management Strategy and Business Continuity Plan.
Overseen by Executive Committee Risk trend: No change/stable Link to strategic pillars: 2. Operational Excellence
K. Cyber
Systems are subject to cyber security breaches which cause business interruption, financial or reputational damage.	Impact Loss of personal data, loss of financial information or operations delays will impact the ability to meet regulatory reporting and may cause financial loss. Loss of investor confidence.	How is the risk managed Annual certification of cyber security with monthly IT reporting from IT providers. Employee training.	Commentary We are not heavily reliant on in-house systems to carry out our business; however, the risk of cyber attack remains. We are reliant on key service providers for rent collection and property management and we ensure we have contractual protection and appropriate oversight. Emerging risks: Increased use of Artificial Intelligence may have consequences yet unknown and these will be rapid and difficult to respond to.
Overseen by Executive Committee Risk trend: Increasing Link to strategic pillars: 2. Operational Excellence
L. Climate change
Transition risks associated with the long-term trends arising from climate change. These include increasing regulation, reporting, insurance, government response and business models of landlords and occupiers changing. Physical risks associated with the impact of climate change on our buildings.	Impact Cost base increased by increased reporting requirements and regulation. Valuation adversely impacted by capital expenditure needed to transition, manage obsolescence and stranded asset risk.	How is the risk managed Our ESG Governance Policy is in place and embedded into processes. The portfolio is diversified across a number of sectors, assets and geographic locations. Flood risk assessments have been updated for all properties in respect of pluvial, fluvial and reservoir flooding. EPC ratings are closely monitored and reported quarterly to the Board.	Commentary We have continued to decarbonise and upgrade our portfolio. We continue to improve our EPC profile and remain fully MEES compliant. Our due diligence and risk assessment show limited physical or transition risk within the portfolio, recognising mitigating actions. Emerging risks: Unexpected or accelerated climate change may lead to an increase in stranded assets.
Overseen by Responsibility Committee Risk trend: No change/stable Link to strategic pillars: 2. Operational Excellence 3. Acting Responsibly

 

 

Viability assessment and statement

The UK Corporate Governance Code requires the Board to make a 'viability statement' which considers the Company's assessment of the future prospects for the Company, in order that the Board can state that the Company will be able to continue its operations over the period of their assessment.

On 12 May 2026, the Board received a non-binding indicative all-share offer by LondonMetric Property Plc and Schroder Real Estate Investment Property Trust Limited. The offer is subject to further negotiations and ongoing due diligence. The Board has therefore prepared this viability statement on a continuing basis.

The Board conducted this review over a five-year timescale, considered to be the most appropriate for long-term investment in commercial property. The assessment has been undertaken taking into account the principal and emerging risks and uncertainties faced by the Group which could impact its investment strategy, future performance, financing and liquidity.

The major risks identified were those relating to a persistently higher bond yield environment and geopolitical uncertainty as well as the inability to raise capital, portfolio and investment risks.

In the ordinary course of business, the Board reviews quarterly forecasts, including forecast market returns. The forecasts include assumptions on lease events and expenditure. For the purposes of the viability assessment of the Group, the model covers a five-year period and is stress tested under various scenarios.

The Board considered a number of scenarios and their impact on the Group's property portfolio and financial position. These scenarios included different levels of rent collection, occupier defaults, void periods and incentives within the portfolio, and the consequential impact on property costs and loan covenants. Forecast movements in capital values were based on input from external economic consultants. The Group's long-term loan facilities mature after the assessment period, and the Board has assumed that the Group will continue to have access to, but is not reliant on, its revolving credit facility. The Board considered the impact of these scenarios on its ability to continue to pay dividends at different rates over the assessment period.

These matters were assessed over the period to 31 March 2031 and will continue to be assessed over rolling five-year periods.

The Directors consider that the scenario testing performed was sufficiently robust and that even under stressed conditions the Company remains viable.

Based on their assessment, and in the context of the Group's business model and strategy, the Directors expect that the Group will be able to continue in operation and meet its liabilities as they fall due over the five-year period to 31 March 2031.

 

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with International Financial Reporting Standards, as issued by the IASB, and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.

In preparing these financial statements, the Directors are required to:

‒      Select suitable accounting policies and then apply them consistently;

‒      Make judgements and estimates that are reasonable, relevant and reliable;

‒      State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

‒      Assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

‒      Use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Guernsey) Law, 2008. They are responsible for such internal controls as they determine are necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error, and have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, and for the preparation and dissemination of financial statements. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement in respect of the Annual Report and financial statements

We confirm that to the best of our knowledge:

‒      The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

‒      The Strategic Report includes a fair review of the development and performance of the business and the position of the Issuer, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

By Order of the Board

 

Saira Johnston

11 June 2026

 

 

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2026

 

	Notes	2026 £000	2025 £000
Income
Revenue from properties	3	51,069	54,019
Property expenses	4	(15,257)	(16,343)
Net property income		35,812	37,676
Expenses
Administrative expenses	6	(7,773)	(7,100)
Total operating expenses		(7,773)	(7,100)
Operating profit before movement on investments		28,039	30,576
Investments
Revaluation of owner-occupied property	14	-	128
Profit on disposal of property, plant & equipment	14	40	-
Investment property valuation movements	13	6,561	12,859
(Loss)/profit on disposal of investment property	13	(999)	1,496
Total profit on investments		5,602	14,483
Operating profit		33,641	45,059
Financing
Interest income	8	735	813
Interest expense	8	(8,522)	(8,549)
Total finance costs		(7,787)	(7,736)
Profit before tax		25,854	37,323
Tax	9	-	-
Profit after tax		25,854	37,323
Total comprehensive income for the year		25,854	37,323
Earnings per share
Basic	11	5.0p	6.9p
Diluted	11	5.0p	6.8p

 

All items in the above statement derive from continuing operations.

All of the profit and total comprehensive income for the year is attributable to the equity holders of the Company.

Notes 1 to 28 form part of these consolidated financial statements.

 

 

Consolidated Statement of Changes in Equity

for the year ended 31 March 2026

 

	Notes	Share capital £000	Retained earnings £000	Other reserves £000	Total £000
Balance as at 31 March 2024		164,400	360,528	(453)	524,475
Profit for the year		-	37,323	-	37,323
Dividends paid	10	-	(20,159)	-	(20,159)
Share-based awards		-	-	751	751
Purchase of shares held in trust	7	-	-	(1,519)	(1,519)
Purchase and cancellation of own shares	21	-	(7,493)	-	(7,493)
Balance as at 31 March 2025		164,400	370,199	(1,221)	533,378
Profit for the year		-	25,854	-	25,854
Dividends paid	10	-	(19,738)	-	(19,738)
Share-based awards		-	-	744	744
Purchase of shares held in trust	7	-	-	(920)	(920)
Purchase and cancellation of own shares	21	-	(17,335)	-	(17,335)
Balance as at 31 March 2026		164,400	358,980	(1,397)	521,983

 

Notes 1 to 28 form part of these consolidated financial statements.

 

 

Consolidated Balance Sheet

as at 31 March 2026

 

	Notes	2026 £000	2025 £000
Non-current assets
Investment properties	13	682,090	700,694
Property, plant and equipment	14	1,090	3,504
Lease receivable	15	1,098	-
Total non-current assets		684,278	704,198
Current assets
Accounts receivable	16	24,116	25,122
Cash and cash equivalents	17	43,259	35,320
Total current assets		67,375	60,442
Total assets		751,653	764,640
Current liabilities
Accounts payable and accruals	18	(19,302)	(20,048)
Loans and borrowings	19	(1,348)	(1,388)
Obligations under leases	23	(276)	(115)
Total current liabilities		(20,926)	(21,551)
Non-current liabilities
Loans and borrowings	19	(205,265)	(207,153)
Obligations under leases	23	(3,479)	(2,558)
Total non-current liabilities		(208,744)	(209,711)
Total liabilities		(229,670)	(231,262)
Net assets		521,983	533,378
Equity
Share capital	21	164,400	164,400
Retained earnings		358,980	370,199
Other reserves		(1,397)	(1,221)
Total equity		521,983	533,378
Net asset value per share	24	102p	100p

 

These consolidated financial statements were approved by the Board of Directors on 11 June 2026 and signed on its behalf by:

Saira Johnston

Chief Financial Officer

11 June 2026

Notes 1 to 28 form part of these consolidated financial statements.

 

 

Consolidated Statement of Cash Flows

for the year ended 31 March 2026

 

	Notes	2026 £000	2025 £000
Operating activities
Operating profit		33,641	45,059
Adjustments for non-cash items	22	(4,638)	(13,597)
Interest received		802	1,248
Interest paid		(8,136)	(8,540)
Decrease in accounts receivable		936	1,044
Decrease in accounts payable and accruals		(984)	(291)
Cash inflows from operating activities		21,621	24,923
Investing activities
Purchase of investment properties	13	-	(533)
Disposal of investment properties	13	29,513	50,031
Capital expenditure on investment properties	13	(8,792)	(11,794)
Purchase of property, plant and equipment	14	(3)	(12)
Disposal of property, plant and equipment	14	3,438	-
Lease premium received	15	2,350	-
Cash inflows from investing activities		26,506	37,692
Financing activities
Borrowings repaid	19	(1,564)	(17,897)
Refinancing costs paid	19	(512)	-
Purchase of shares held in trust	7	(920)	(1,519)
Purchase and cancellation of own shares	21	(17,335)	(7,493)
Dividends paid	10	(19,738)	(20,159)
Lease payments		(119)	-
Cash outflows from financing activities		(40,188)	(47,068)
Net increase in cash and cash equivalents		7,939	15,547
Cash and cash equivalents at beginning of year		35,320	19,773
Cash and cash equivalents at end of year	17	43,259	35,320

 

Notes 1 to 28 form part of these consolidated financial statements.

 

 

Notes to the Consolidated Financial Statements

for the year ended 31 March 2026

1. General information

Picton Property Income Limited (the 'Company' and together with its subsidiaries the 'Group') was established in Guernsey on 15 September 2005. It has a listing on the main market of the London Stock Exchange as a commercial company and entered the UK REIT regime on 1 October 2018. The consolidated financial statements are prepared for the year ended 31 March 2026 with comparatives for the year ended 31 March 2025.

2. Material accounting policies

Basis of accounting

The financial statements have been prepared on a going concern basis and adopt the historical cost basis, except for the revaluation of investment properties, share-based awards and property, plant and equipment. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The financial statements, which give a true and fair view, are prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) as issued by the IASB and the Companies (Guernsey) Law, 2008.

On 13 January 2026 the Board announced a Strategic Review to consider options for a merger with other UK REITs, alongside other forms of consolidation, combination, or selling the entire issued share capital of the Company conducted under a Formal Sales Process, or other corporate actions, including but not limited to, selling the Company's portfolio or subsidiaries and returning capital to shareholders. On 12 May 2026, a non-binding indicative all-share offer ('Proposed Offer') from LondonMetric Property Plc and Schroder Real Estate Investment Trust Limited was announced. The Company is engaging with all stakeholders, with negotiations and due diligence ongoing.

The Directors have assessed whether the going concern basis remains appropriate for the preparation of the financial statements. They have reviewed the Group's principal and emerging risks, existing loan facilities, access to funding and liquidity position and then considered different adverse scenarios impacting the portfolio and the potential consequences on financial performance, asset values, dividend policy, capital projects and loan covenants. Under all these scenarios the Group has sufficient resources to continue its operations, and remain within its loan covenants, for the foreseeable future and in any case for a period of at least 12 months from the date of these financial statements.

Based on their assessment and knowledge of the portfolio and market, the Directors have therefore continued to adopt the going concern basis in preparing the financial statements.

The financial statements are presented in pounds sterling, which is the Company's functional currency. All financial information presented in pounds sterling has been rounded to the nearest thousand, except when otherwise indicated.

New or amended standards issued

The accounting policies adopted are consistent with those of the previous financial period, as amended to reflect the adoption of new standards, amendments and interpretations which became effective in the year as shown below.

‒      Amendments to IAS 21 - Lack of Exchangeability

The amendments do not have a material effect on the consolidated financial statements of the Group.

At the date of approval of these financial statements, there are a number of new and amended standards in issue but not yet effective for the financial year ended 31 March 2026 and thus have not been applied by the Group.

‒      IFRS 18 Presentation and Disclosure in Financial Statements

‒      IFRS 19 Subsidiaries without Public Accountability

‒      Amendments to IFRS 9 and IFRS 7 - Contracts referencing Nature-dependent Electricity

‒      Annual Improvements to IFRS Accounting Standards

The adoption of these new and amended standards, together with any other IFRSs or IFRIC interpretations that are not yet effective, are not expected to have a material impact on the financial statements of the Group other than IFRS 18 (Presentation and Disclosure in Financial Statements).

IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. The new standard introduces the following key new requirements.

‒      Entities are required to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly-defined operating profit subtotal. Entities' net profit will not change.

‒      Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements.

‒      Enhanced guidance is provided on how to group information in the financial statements.

In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method.

The Group is still in the process of assessing the impact of the new standard, particularly with respect to the structure of the Group's consolidated statement of comprehensive income, the consolidated statement of cash flows and the additional disclosures required for MPMs. The Group is also assessing the impact on how information is grouped in the financial statements, including for items currently labelled as 'other'.

Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Significant judgements and estimates

Judgements made by management in the application of IFRSs that have a significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 13.

The critical estimates and assumptions relate to the investment property valuations applied by the Group's independent valuer. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company at the reporting date. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. These financial statements include the results of the subsidiaries disclosed in Note 12. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Fair value hierarchy

The fair value measurement for the Group's assets and liabilities is categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels have been defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred.

Investment properties

Freehold property held by the Group to earn income or for capital appreciation, or both, is classified as investment property in accordance with IAS 40 Investment Property. Property held under head leases for similar purposes is also classified as investment property. Investment property is initially recognised at purchase cost plus directly attributable acquisition expenses and subsequently measured at fair value. The fair value of investment property is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification and who has recent experience in the location and category of the investment property being valued.

The fair value of investment properties is measured based on each property's highest and best use from a market participant's perspective and considers the potential uses of the property that are physically possible, legally permissible and financially feasible.

The fair value of investment property generally involves consideration of:

‒      Market evidence on comparable transactions for similar properties;

‒      The actual current market for that type of property in that type of location at the reporting date and current market expectations;

‒      Rental income from leases and market expectations regarding possible future lease terms;

‒      Hypothetical sellers and buyers, who are reasonably informed about the current market and who are motivated, but not compelled, to transact in that market on an arm's length basis; and

‒      Investor expectations on matters such as future enhancement of rental income or market conditions.

Gains and losses arising from changes in fair value are included in the Consolidated Statement of Comprehensive Income in the year in which they arise. Purchases and sales of investment property are recognised when contracts have been unconditionally exchanged and the significant risks and rewards of ownership have been transferred.

An investment property is derecognised for accounting purposes upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Consolidated Statement of Comprehensive Income in the year the asset is derecognised. Investment properties are not depreciated.

The majority of the investment properties are charged by way of a first ranking mortgage as security for the loans made to the Group; see Note 19.

Property, plant and equipment

Owner-occupied property

Owner-occupied property is stated at its revalued amount, which is determined in the same manner as investment property. It is depreciated over its remaining useful life (in this case 40 years) with the depreciation included in administrative expenses. On revaluation, any accumulated depreciation is eliminated against the gross carrying amount of the property concerned, and the net amount restated to the revalued amount. Subsequent depreciation charges are adjusted based on the revalued amount. Any difference between the depreciation charge on the revalued amount and that which would have been charged under historic cost is transferred between the revaluation reserve and retained earnings as the property is used. Any gain arising on this remeasurement is recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the revaluation reserve. Any loss is recognised in profit or loss. However, to the extent that an amount is included in the revaluation surplus for that property, the loss is recognised in other comprehensive income and reduces the revaluation surplus within equity.

Plant and equipment

Plant and equipment is depreciated on a straight-line basis over the estimated useful lives of each item of plant and equipment. The estimated useful lives are between three and five years.

Leases

Leases - the Group as a lessee

Where the Group is a lessee, a right of use asset and lease liability are recognised at the outset of the lease. The lease liability is initially measured at the present value of the lease payments based on the Group's expectations of the likelihood of the lease term.

The lease liability is subsequently adjusted to reflect an imputed finance charge, payments made to the lessor and any lease modifications.

The right of use asset is initially measured at cost, which comprises the amount of the lease liability, direct costs incurred, less any lease incentives received by the Group.

The Group has two categories of right of use assets: those in respect of head leases related to a number of leasehold properties and an occupational lease for its head office. All right of use assets in respect of leasehold properties are classified as investment properties and added to the carrying value. The right of use asset in respect of the Group's head office lease is classified under property, plant and equipment and subsequently depreciated over the length of the lease.

Leases - the Group as a lessor

The Group leases its investment properties under commercial property leases which are held as operating leases. An operating lease is a lease other than a finance lease. A finance lease is one where substantially all the risks and rewards of ownership are passed to the lessee. The operating lease income is recognised as income on a straight-line basis over the lease term. Direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income. Upon receipt of a surrender premium for the early termination of a lease, the profit, net of dilapidations and non-recoverable outgoings relating to the lease concerned, is immediately reflected in revenue from properties if there are no relevant conditions attached to the surrender.

Cash and cash equivalents

Cash includes cash in hand and cash with banks. Cash equivalents are short-term and are held for short-term commitments, these include highly liquid investments that are readily convertible to known amounts of cash with original maturities in three months or less and that are subject to an insignificant risk of change in value.

Income and expenses

Income and expenses are included in the Consolidated Statement of Comprehensive Income on an accruals basis. All of the Group's income and expenses are derived from continuing operations.

Lease incentive payments are amortised on a straight-line basis over the period from the date of lease inception to the end of the lease term and presented within accounts receivable. Lease incentives granted are recognised as a reduction of the total rental income, over the term of the lease.

Property operating costs include the costs of professional fees on letting and other non-recoverable costs.

The income charged to occupiers for property service charges and the costs associated with such service charges are shown separately in Notes 3 and 4 to reflect that, notwithstanding this money is held on behalf of occupiers, the ultimate risk for paying and recovering these costs rests with the property owner.

Employee benefits

Defined contribution plans

A defined contribution plan is a retirement benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the Consolidated Statement of Comprehensive Income in the periods during which services are rendered by employees.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Share-based payments

The fair value of the amounts payable to employees in respect of the Deferred Bonus Plan, when these are to be settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become unconditionally entitled to payment. Where the awards are equity settled, the fair value is recognised as an expense, with a corresponding increase in equity. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised under the category staff costs in the Consolidated Statement of Comprehensive Income.

The grant date fair value of awards to employees made under the Long-term Incentive Plan is recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related non-market performance conditions at the vesting date. For share-based payment awards subject to market conditions, the grant date fair value of the share-based awards is measured to reflect such conditions and there is no adjustment between expected and actual outcomes.

The cost of the Company's shares held by the Employee Benefit Trust is deducted from equity in the Consolidated Balance Sheet. Any shares held by the Trust are not included in the calculation of earnings or net assets per share.

Dividends

Dividends are recognised in the period in which they are declared.

Share buybacks

When shares are redeemed or purchased wholly out of profits available for distribution, a sum equal to the total amount paid by the Company is deducted from the Company's retained earnings.

Accounts receivable

Accounts receivable are stated at their nominal amount as reduced by appropriate allowances for estimated irrecoverable amounts. The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected impairment provision for all applicable accounts receivable. Bad debts are written off when identified.

Loans and borrowings

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognised in profit or loss in the Consolidated Statement of Comprehensive Income when the liabilities are derecognised for accounting purposes, as well as through the amortisation process.

Assets classified as held for sale

Any investment properties on which contracts for sale have been exchanged but which had not completed at the period end are disclosed as properties held for sale as control over the properties is still retained over the period end. Investment properties included in the held for sale category continue to be measured in accordance with the accounting policy for investment properties.

Other assets and liabilities

Other assets and liabilities, including trade creditors, accruals, other creditors, and deferred rental income, which are not interest bearing are stated at their nominal value.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Revaluation reserve

Any surplus or deficit arising from the revaluation of owner-occupied property is taken to the revaluation reserve. A revaluation deficit is only taken to retained earnings when there is no previous revaluation surplus to reverse.

Taxation

The Group elected to be treated as a UK REIT with effect from 1 October 2018. The UK REIT rules exempt the profits of the Group's UK property rental business from UK corporation and income tax. Gains on UK properties are also exempt from tax, provided they are not held for trading. The Group is otherwise subject to UK corporation tax.

Principles for the Consolidated Statement of Cash Flows

The Consolidated Statement of Cash Flows has been drawn up according to the indirect method, separating the cash flows from operating activities, investing activities and financing activities. The net result has been adjusted for amounts in the Consolidated Statement of Comprehensive Income and movements in the Consolidated Balance Sheet which have not resulted in cash income or expenditure in the related period.

The cash amounts in the Consolidated Statement of Cash Flows include those assets that can be converted into cash without any restrictions and without any material risk of decreases in value as a result of the transaction.

 

3. Revenue from properties

	2026 £000	2025 £000
Rents receivable (adjusted for lease incentives)	41,190	43,531
Surrender premiums	1,621	7
Dilapidation receipts	411	368
Other income	91	286
	43,313	44,192
Service charge income	7,756	9,827
	51,069	54,019

 

Rents receivable have been adjusted for lease incentives recognised of £0.4 million (2025: £0.6 million).

 

4. Property expenses

	2026 £000	2025 £000
Property operating costs	3,369	2,629
Property void costs	4,132	3,887
	7,501	6,516
Recoverable service charge costs	7,756	9,827
	15,257	16,343

 

Property operating costs include £0.9 million for lease incentives (2025: £0.4 million).

 

5. Operating segments

The Board is responsible for setting the Group's strategy and business model. The key measure of performance used by the Board to assess the Group's performance is the total return on the Group's net asset value. As the total return on the Group's net asset value is calculated based on the net asset value per share calculated under IFRS as shown at the foot of the Consolidated Balance Sheet, assuming dividends are reinvested, the key performance measure is that prepared under IFRS. Therefore, no reconciliation is required between the measure of profit or loss used by the Board and that contained in the financial statements.

The Board has considered the requirements of IFRS 8 'Operating Segments'. The Board is of the opinion that the Group, through its subsidiary undertakings, operates in one reportable industry segment, namely real estate investment, and across one primary geographical area, namely the United Kingdom, and therefore no segmental reporting is required. The portfolio consists of 46 commercial properties, which are in the industrial, office, retail and leisure sectors.

 

6. Administrative expenses

	2026 £000	2025 £000
Director and staff costs	4,554	4,444
Auditor's remuneration	227	256
Other administrative expenses	2,356	2,400
	7,137	7,100
Strategic Review costs	636	-
	7,773	7,100

 

Strategic Review costs comprise legal fees (£0.3 million) and additional staff costs, excluding the Executive Directors (£0.3 million).

Auditor's remuneration comprises:	2026 £000	2025 £000
Audit fees:
Audit of Group financial statements	144	138
Audit of subsidiaries' financial statements	83	80
Audit-related fees:
Review of interim financial statements	-	38
	227	256

 

7. Director and staff costs

	2026 £000	2025 £000
Wages and salaries	2,419	2,436
Non-Executive Directors' fees	308	298
Social security costs	605	526
Other pension costs	58	51
Share-based payments - cash settled	357	311
Share-based payments - equity settled	807	822
	4,554	4,444
Strategic Review related costs	316	-
	4,870	4,444

 

Employees participate in two share-based remuneration arrangements: the Deferred Bonus Plan and the Long-term Incentive Plan (the 'LTIP').

For all employees, a proportion of any discretionary annual bonus will be an award under the Deferred Bonus Plan. With the exception of Executive Directors, awards are cash settled and vest after two years. The final value of awards is determined by the movement in the Company's share price and dividends paid over the vesting period. For Executive Directors, awards are equity settled and also vest after two years. On 30 June 2025, awards of 661,027 notional shares were made which vest in June 2027 (2025: 1,063,607 notional shares). The next awards are due to be made in June 2026 for vesting in June 2028.

The table below summarises the awards made under the Deferred Bonus Plan. Employees have the option to defer the vesting date of their awards for a maximum of seven years.

Vesting date	Units at 31 March 2024	Units granted in the year	Units cancelled in the year	Units redeemed in the year	Units at 31 March 2025	Units granted in the year	Units cancelled in the year	Units redeemed in the year	Units at 31 March 2026
22 June 2023	139,956	-	-	(139,956)	-	-	-	-	-
17 June 2024	498,788	-	-	(498,788)	-	-	-	-	-
14 June 2025	832,580	-	-	-	832,580	-	-	(832,580)	-
6 June 2026	-	1,063,607	-	-	1,063,607	-	-	-	1,063,607
30 June 2027	-	-	-	-	-	661,027	-	-	661,027
	1,471,324	1,063,607	-	(638,744)	1,896,187	661,027	-	(832,580)	1,724,634

 

The Group also has a Long-term Incentive Plan for all employees which is equity settled. Awards are made annually and vest three years from the grant date. Vesting is conditional on three performance metrics measured over each three-year period. Awards to Executive Directors are also subject to a further two-year holding period. On 30 June 2025, awards for a maximum of 1,506,647 shares were granted to employees in respect of the three-year period ending on 31 March 2028. In the previous year, awards of 1,190,840 shares were made on 6 June 2024 for the three-year period ending on 31 March 2027.

The metrics are:

‒      Total shareholder return (TSR) of Picton Property Income Limited, compared to a comparator group of similar listed companies or the EPRA Nareit UK Index;

‒      Total property return (TPR) of the property assets held within the Group, compared to the MSCI UK Quarterly Property Index; and

‒      Growth in EPRA earnings per share (EPRA EPS) of the Group.

The fair value of share grants is measured using the Monte Carlo model for the TSR metric and a Black-Scholes model for the TPR and EPRA EPS metrics. The fair value is recognised over the expected vesting period. For the awards made during this year and the previous year the main inputs and assumptions of the models, and the resulting fair values, are:

Assumptions
Grant date	30 June 2025	6 June 2024
Share price at date of grant	80.4p	67.4p
Exercise price	Nil	Nil
Expected term	3 years	3 years
Risk-free rate - TSR condition	3.7%	4.3%
Share price volatility - TSR condition	24.3%	26.7%
Median volatility of comparator group - TSR condition	21.4%	29.2%
Correlation - TSR condition	67.8%	50.2%
TSR performance at grant date - TSR condition	18.3%	7.0%
Median TSR performance of comparator group at grant date - TSR condition	11.2%	4.4%
Fair value - TSR condition (Monte Carlo method)	44.0p	29.0p
Fair value - TPR condition (Black-Scholes model)	80.4p	67.4p
Fair value - EPS condition (Black-Scholes model)	80.4p	67.4p

 

The Trustee of the Company's Employee Benefit Trust acquired 1,200,000 ordinary shares during the year for £920,000 (2025: 2,100,000 shares for £1,519,000) and sold or transferred 1,023,513 shares for awards that were redeemed in the year (2025: 799,481 shares).

The Group employed 11 members of staff at 31 March 2026 (2025: 12). The average number of people employed by the Group for the year ended 31 March 2026 was 12 (2025: 12).

 

8. Interest expense and interest income

Interest paid	2026 £000	2025 £000
Interest payable on loans	7,983	8,081
Interest on obligations under finance leases	172	173
Interest expense under leasing arrangements	39	-
Non-utilisation fees	328	295
	8,522	8,549

 

The loan arrangement costs incurred to 31 March 2026 are £3,236,000 (2025: £3,328,000). These are amortised over the duration of the loans with £298,000 amortised in the year ended 31 March 2026 and included in interest payable on loans (2025: £304,000).

Interest income of £735,000 (2025: £813,000) was generated on cash balances which earn interest at floating rates based on daily deposit rates.

 

9. Tax

The charge for the year is:

	2026 £000	2025 £000
Tax expense in year	-	-
Total tax charge	-	-

 

A reconciliation of the tax charge applicable to the results at the statutory tax rate to the charge for the year is as follows:

	2026 £000	2025 £000
Profit before taxation	25,854	37,323
Expected tax charge on ordinary activities at the standard rate of taxation of 25% (2025: 25%)	6,464	9,331
Less:
UK REIT exemption on net income	(5,063)	(5,710)
Revaluation movement not taxable	(1,401)	(3,621)
Total tax charge	-	-

 

As a UK REIT, the income profits of the Group's UK property rental business are exempt from corporation tax, as are any gains it makes from the disposal of its properties, provided they are not held for trading. The Group is otherwise subject to UK corporation tax at the prevailing rate.

As the principal company of the REIT, the Company is required to distribute at least 90% of the income profits of the Group's UK property rental business. There are a number of other conditions that are also required to be met by the Company and the Group to maintain REIT tax status. These conditions were met in the year and the Board intends to conduct the Group's affairs such that these conditions continue to be met for the foreseeable future. Accordingly, deferred tax is no longer recognised on temporary differences relating to the property rental business.

 

10. Dividends

	2026 £000	2025 £000
Declared and paid:
Interim dividend for the period ended 31 March 2024: 0.925 pence	-	5,050
Interim dividend for the period ended 30 June 2024: 0.925 pence	-	5,039
Interim dividend for the period ended 30 September 2024: 0.925 pence	-	5,038
Interim dividend for the period ended 31 December 2024: 0.925 pence	-	5,032
Interim dividend for the period ended 31 March 2025: 0.95 pence	5,019	-
Interim dividend for the period ended 30 June 2025: 0.95 pence	4,956	-
Interim dividend for the period ended 30 September 2025: 0.95 pence	4,911	-
Interim dividend for the period ended 31 December 2025: 0.95 pence	4,852	-
	19,738	20,159

 

The interim dividend of 0.95 pence per ordinary share in respect of the period ended 31 March 2026 has not been recognised as a liability as it was declared after the year end. This dividend of £4,852,000 was paid on 29 May 2026.

 

11. Earnings per share

Basic and diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the year, excluding the average number of shares held by the Employee Benefit Trust for the year. The diluted number of shares also reflects the contingent shares to be issued under the Long-term Incentive Plan.

The following reflects the profit and share data used in the basic and diluted profit per share calculation:

	2026	2025
Net profit attributable to ordinary shareholders of the Company from continuing operations (£000)	25,854	37,323
Weighted average number of ordinary shares for basic earnings per share	519,279,302	544,037,179
Weighted average number of ordinary shares for diluted earnings per share	521,208,792	545,502,180

 

12. Investments in subsidiaries

The Company had the following principal subsidiaries as at 31 March 2026 and 31 March 2025:

Name	Place of incorporation	Ownership proportion
Picton UK Real Estate Trust (Property) Limited	Guernsey	100%
Picton (UK) REIT (SPV) Limited	Guernsey	100%
Picton (UK) Listed Real Estate	Guernsey	100%
Picton UK Real Estate (Property) No 2 Limited	Guernsey	100%
Picton (UK) REIT (SPV No 2) Limited	Guernsey	100%
Picton Capital Limited	England & Wales	100%
Picton (General Partner) No 2 Limited	Guernsey	100%
Picton (General Partner) No 3 Limited	Guernsey	100%
Picton No 2 Limited Partnership	England & Wales	100%
Picton No 3 Limited Partnership	England & Wales	100%
Picton Financing UK Limited	England & Wales	100%
Picton Financing UK (No 2) Limited	England & Wales	100%
Picton Property No 3 Limited	Guernsey	100%

 

The results of the above entities are consolidated within the Group financial statements.

Picton UK Real Estate Trust (Property) Limited and Picton (UK) REIT (SPV) Limited own 100% of the units in Picton (UK) Listed Real Estate, a Guernsey Unit Trust (the 'GPUT'). The GPUT holds a 99.9% interest in both Picton No 2 Limited Partnership and Picton No 3 Limited Partnership and the remaining balances are held by Picton (General Partner) No 2 Limited and Picton (General Partner) No 3 Limited, respectively.

 

13. Investment properties

The following table provides a reconciliation of the opening and closing amounts of investment properties classified as Level 3 recorded at fair value.

	2026 £000	2025 £000
Fair value at start of year	700,694	724,043
Capital expenditure on investment properties	8,792	11,794
Acquisitions	-	533
Disposals	(29,513)	(50,031)
(Loss)/profit on disposal of investment properties	(999)	1,496
Reclassification of investment property (see Note 15)	(3,445)	-
Unrealised movement on investment properties	6,561	12,859
Fair value at the end of the year	682,090	700,694
Historic cost at the end of the year	628,834	647,863

 

The fair value of investment properties reconciles to the appraised value as follows:

	2026 £000	2025 £000
Appraised value	700,795	723,145
Carlisle asset classified as finance lease (see Note 15)	(1,083)	-
Valuation of assets held under head leases	2,028	2,074
Owner-occupied property	-	(3,438)
Lease incentives held as debtors	(19,650)	(21,087)
Fair value at the end of the year	682,090	700,694

 

In Carlisle, the hotel occupier entered into a new 99-year lease with a premium of £2.35 million being received as part of extending the lease term and a rent reduction. As the present value of lease payments amount to at least substantially all of the fair value of the underlying asset the lease has been treated as a finance lease in the financial statements. The present value of the remaining lease payments receivable under the lease are classified in Note 15.

The sale of Stanford Building, London WC2 completed in the period with net disposal proceeds of £32.9 million, of which £29.5 million has been treated as a disposal of investment property and £3.4 million has been treated as a disposal of owner-occupied property (see Note 14). A realised loss on disposal of investment property of £1.0 million has been realised in the statement of comprehensive income.

The investment properties were valued by independent valuers, Knight Frank LLP as at 31 March 2026 and CBRE Limited as at 31 March 2025, on the basis of fair value in accordance with the version of the RICS Valuation - Global Standards (incorporating the International Valuation Standards) and the UK national supplement (the Red Book) current as at the valuation date. The total fees earned by Knight Frank LLP and CBRE Limited from the Group are less than 5% of their total UK revenue.

The fair value of the Group's investment properties has been determined using an income capitalisation technique, whereby contracted and market rental values are capitalised with a market capitalisation rate. The resulting valuations are cross-checked against the equivalent yields and the fair market values per square foot derived from comparable market transactions on an arm's length basis.

In addition, the Group's investment properties are valued quarterly by Knight Frank LLP. The valuations are based on:

‒      Information provided by the Group, including rents, lease terms, revenue and capital expenditure. Such information is derived from the Group's financial and property systems and is subject to the Group's overall control environment; and

‒      Valuation models used by the valuers, including market-related assumptions based on their professional judgement and market observation.

The assumptions and valuation models used by the valuers, and supporting information, are reviewed by senior management and the Board through the Property Valuation Committee. Members of the Property Valuation Committee, together with senior management, meet with the independent valuer on a quarterly basis to review the valuations and underlying assumptions, including considering current market trends and conditions, and changes from previous quarters. The Board will also consider whether circumstances at specific investment properties, such as alternative uses and issues with occupational tenants, are appropriately reflected in the valuations. The fair value of investment properties is measured based on each property's highest and best use from a market participant's perspective and considers the potential uses of the property that are physically possible, legally permissible and financially feasible.

The March 2026 valuation has been prepared during a period of geopolitical tension arising from the Middle East conflict which commenced on 28 February 2026. This has resulted in an increase to global risk premiums, disrupted supply chain conditions, and heightened volatility in energy markets. Such instability can affect financing conditions, inflation, and investor sentiment, with behaviour capable of changing rapidly during periods of heightened volatility. The external valuer, Knight Frank LLP, has therefore confirmed that the opinions used in their valuation are only valid as at the valuation date and that market conditions should be closely monitored to see how they evolve.

As at 31 March 2026 and 31 March 2025, all of the Group's properties are Level 3 in the fair value hierarchy as it involves use of significant judgement. There were no transfers between levels during the year and the prior year. Level 3 inputs used in valuing the properties are those which are unobservable, as opposed to Level 1 (inputs from quoted prices) and Level 2 (observable inputs either directly, i.e. as prices, or indirectly, as derived from prices).

Information on these significant unobservable inputs per sector of investment properties is disclosed as follows:

	2026				2025
	Office	Industrial	Retail and Leisure		Office	Industrial	Retail and Leisure
Appraised value (£000)	146,300	468,725	84,687		175,305	463,220	84,620
Area (sq ft, 000s)	686	3,255	699		706	3,227	692
Range of unobservable inputs:
Gross ERV (sq ft per annum)
- range	£12.45 to £66.97	£3.14 to £31.27	£4.09 to £32.05		£12.45 to £93.46	£3.92 to £29.96	£3.35 to £28.12
- weighted average	£33.31	£14.29	£12.08		£43.74	£13.69	£12.42
Net initial yield
- range	2.29% to 10.53%	0.00% to 8.08%	0.00% to 13.82%		3.51% to 12.10%	2.89% to 8.21%	0.00% to 24.58%
- weighted average	5.98%	4.20%	5.93%		6.96%	4.53%	6.15%
Reversionary yield
- range	6.87% to 14.48%	1.15% to 8.64%	6.54% to 16.86%		5.12% to 15.39%	4.76% to 9.17%	6.97% to 17.13%
- weighted average	10.34%	6.12%	7.95%		9.37%	5.83%	8.16%
True equivalent yield
- range	6.02% to 12.92%	5.00% to 9.86%	6.45% to 11.51%		5.14% to 11.30%	4.78% to 8.39%	6.50% to 12.75%
- weighted average	9.12%	5.85%	7.86%		8.20%	5.63%	7.91%

 

An increase/decrease in ERV will increase/decrease valuations, while an increase/decrease to yield decreases/increases valuations. We have reviewed the ranges used in assessing the impact of changes in unobservable inputs on the fair value of the Group's property portfolio and concluded these were still reasonable. The table below sets out the sensitivity of the valuation to changes of 50 basis points in yield.

Sector	Movement	2026 Impact on valuation	2025 Impact on valuation
Industrial	Increase of 50 basis points	Decrease of £39.4m	Decrease of £39.3m
	Decrease of 50 basis points	Increase of £48.0m	Increase of £47.3m
Office	Increase of 50 basis points	Decrease of £9.6m	Decrease of £11.8m
	Decrease of 50 basis points	Increase of £10.7m	Increase of £13.5m
Retail and Leisure	Increase of 50 basis points	Decrease of £5.4m	Decrease of £5.0m
	Decrease of 50 basis points	Increase of £6.1m	Increase of £5.7m

 

14. Property, plant and equipment

	Right of use asset £000	Owner- occupied property £000	Plant and equipment £000	Total £000
At 31 March 2024	-	3,391	108	3,499
Additions	-	-	12	12
Depreciation	-	(81)	(54)	(135)
Revaluation	-	128	-	128
At 31 March 2025	-	3,438	66	3,504
Additions	1,201	-	3	1,204
Depreciation	(125)	(40)	(55)	(220)
Disposals	-	(3,438)	-	(3,438)
Profit on disposal	-	40	-	40
At 31 March 2026	1,076	-	14	1,090

 

Property, plant and equipment included the fair value of the first floor Stanford Building, London WC2, which was classified as owner-occupied property as at 31 March 2025. In September 2025, Stanford Building was sold with net sale proceeds received in relation to the owner-occupied element of the building of £3,438,000.

The Group simultaneously entered into a ten-year lease, with a five-year break option, of the first floor Stanford Building. At lease commencement the Group recognised a right of use asset of £1.2 million; the liability in connection to this lease is detailed in obligations under leases (Note 23).

 

15. Lease receivable

The Group owns a portfolio of investment properties and enters into lease arrangements with commercial occupiers. During the year, the Group entered into a new 99-year lease with an occupier of a hotel in Carlisle.

At commencement of the lease, the present value of lease payments receivable amounted to substantially all of the fair value of the underlying asset. As a result, the Group has classified the arrangement as a finance lease and derecognised the hotel as an investment property, recognising instead a lease receivable on the balance sheet.

The fair value of the hotel at lease commencement, and therefore the initial lease receivable amount recognised, was £3.4 million.

A lease premium of £2.4 million was received from the occupier at lease commencement. At the reporting date, the Group's future income based on the unexpired lease length, together with the unearned finance income, was as follows:

	2026 £000	2025 £000
Within one year	75	-
One to two years	75	-
Two to three years	75	-
Three to four years	75	-
Four to five years	77	-
After five years	8,550	-
Total undiscounted lease payments receivable	8,927	-
Unearned finance income	(7,829)	-
Lease receivable	1,098	-

 

Profit and loss information

	2026 £000	2025  £000
Gain on derecognition of property	981	-
Finance income on the lease receivable	72	-
Income relating to variable lease payments not included in the measurement of the net investment in the lease	-	-

 

At commencement of the finance lease, a gain of £981,000 was recognised in the Consolidated Statement of Comprehensive Income under Investment property valuation movements. This represented the difference between the investment property fair value at March 2025 and the initial lease receivable amount at commencement of the lease of £3.4 million.

Amounts are considered for impairment using the lifetime expected credit loss method. The impairment on this balance was assessed as not significant as at 31 March 2026.

 

16. Accounts receivable

	2026 £000	2025 £000
Tenant debtors (net of provisions for bad debts)	2,837	3,034
Lease incentives	19,650	21,087
Other debtors	1,629	1,001
	24,116	25,122

 

The estimated fair values of receivables are the discounted amount of the estimated future cash flows expected to be received and the approximate value of their carrying amounts.

Amounts are considered impaired using the lifetime expected credit loss method. Movement in the balance considered to be impaired has been included in the Consolidated Statement of Comprehensive Income. As at 31 March 2026, tenant debtors of £45,000 (2025: £105,000) were considered impaired and provided for.

 

17. Cash and cash equivalents

 

	2026 £000	2025 £000
Cash at bank	17,287	20,771
Short-term deposits	25,972	14,549
	43,259	35,320

 

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. The carrying amounts of these assets approximate to their fair value.

 

18. Accounts payable and accruals

	2026 £000	2025 £000
Accruals	7,883	5,622
Deferred rental income	3,950	5,822
VAT liability	560	2,715
Trade creditors	398	658
Other creditors	6,511	5,231
	19,302	20,048

 

19. Loans and borrowings

	Maturity	2026 £000	2025 £000
Current
Aviva facility	-	1,633	1,564
Loan arrangement costs	-	(285)	(176)
		1,348	1,388
Non-current
Canada Life facility	24 July 2031	129,045	129,045
Aviva facility	24 July 2032	77,394	79,027
Loan arrangement costs	-	(1,174)	(919)
		205,265	207,153
		206,613	208,541

 

The following table provides a reconciliation of the movement in loans and borrowings to cash flows arising from financing activities.

	2026 £000	2025 £000
Balance at start of year	208,541	226,134
Changes from financing cash flows
Proceeds from loans and borrowings	-	-
Repayment of loans and borrowings	(1,564)	(17,897)
Loan arrangement costs paid	(512)	-
	(2,076)	(17,897)
Other changes
Amortisation of financing costs	298	304
Accrued financing costs	(150)	-
	148	304
Balance as at 31 March	206,613	208,541

 

The Group has a £129.0 million loan facility with Canada Life which matures in July 2031. Interest is fixed at 3.25% per annum over the remaining life of the loan. The loan agreement has a loan to value covenant of 65% and an interest cover test of 1.75. The loan is secured over the Group's properties held by Picton No 2 Limited Partnership and Picton UK Real Estate Trust (Property) No 2 Limited, valued at £320.0 million (2025: £350.9 million).

Additionally, the Group has a £95.3 million term loan facility with Aviva Commercial Finance Limited which matures in July 2032. The loan is for a term of 20 years and was fully drawn on 24 July 2012 with approximately one-third repayable over the life of the loan in accordance with a scheduled amortisation profile. The Group has repaid £1.6 million in the year (2025: £1.5 million). Interest on the loan is fixed at 4.38% per annum over the life of the loan. The facility has a loan to value covenant of 65% and a debt service cover ratio of 1.4. The facility is secured over the Group's properties held by Picton No 3 Limited Partnership, valued at £173.0 million (2025: £168.3 million).

The Group also has a £50.0 million revolving credit facility (RCF) with National Westminster Bank Plc which matures in April 2028. As at 31 March the facility was undrawn (2025: £nil), interest is charged at 165-170 basis points over SONIA on drawn balances and there is an undrawn commitment fee of 66 basis points. The facility is secured on properties held by Picton UK Real Estate Trust (Property) Limited, valued at £141.0 million (2025: £141.3 million).

The fair value of the drawn loan facilities at 31 March 2026, estimated as the present value of future cash flows discounted at the market rate of interest at that date, was £186.2 million (2025: £183.5 million). The fair value of the drawn loan facilities is classified as Level 2 under the hierarchy of fair value measurements.

There were no transfers between levels of the fair value hierarchy during the current or prior years.

The weighted average interest rate on the Group's borrowings as at 31 March 2026 was 3.7% (2025: 3.7%).

 

20. Contingencies and capital commitments

The Group has entered into contracts for the refurbishment of 14 properties (2025: 11 properties) with commitments outstanding at 31 March 2026 of approximately £8.2 million (2025: £5.3 million). No further obligations to construct or develop investment property or for repairs, maintenance or enhancements were in place as at 31 March 2026 (2025: £nil).

 

21. Share capital and other reserves

	2026 £000	2025 £000
Authorised:
Unlimited number of ordinary shares of no par value	-	-
Issued and fully paid:
513,827,021 ordinary shares of no par value (31 March 2025: 536,400,000)	-	-
Share premium	164,400	164,400

 

The Company has 513,827,021 ordinary shares in issue of no par value (2025: 536,400,000).

No new ordinary shares were issued during the year ended 31 March 2026.

	2026 Number of shares	2025 Number of shares
Ordinary share in issue - opening balance	536,400,000	547,605,596
Shares cancelled in the year	(22,572,979)	(11,205,596)
ordinary shares in issue - closing balance	513,827,021	536,400,000
Number of shares held in Employee Benefit Trust	(3,119,446)	(2,942,959)
	510,707,575	533,457,041

 

The fair value of awards made under the Long-term Incentive Plan is recognised in other reserves.

Subject to the solvency test contained in the Companies (Guernsey) Law, 2008 being satisfied, ordinary shareholders are entitled to all dividends declared by the Company and to all of the Company's assets after repayment of its borrowings and ordinary creditors. The Trustee of the Company's Employee Benefit Trust has waived its right to receive dividends on the 3,119,446 shares it holds but continues to hold the right to vote. Ordinary shareholders have the right to vote at meetings of the Company. All ordinary shares carry equal voting rights.

On 30 July 2025 the Directors were given authority to buy back up to 14.99% of the Company's ordinary shares in issue, being 78,486,021 shares, subject to the annual renewal of the authority from shareholders. Any buyback of ordinary shares will be made subject to Guernsey law, and the making and timing of any buybacks will be at the absolute discretion of the Board. During the period the Company bought back and cancelled 22,572,979 ordinary shares (2025: 11,205,596 shares) at a cost of £17.3 million (2025: £7.5 million). The value of the shares cancelled of £17.3 million is deducted from Retained Earnings. On 31 March 2026 the remaining authority, following repurchase since authority from shareholders was granted on 30 July 2025, has now reduced to 68,723,837 ordinary shares.

 

22. Adjustment for non-cash movements in the cash flow statement

	2026 £000	2025 £000
Movement in investment property valuation	(6,561)	(12,859)
Loss/(profit) on disposal of investment property	999	(1,496)
Revaluation of owner-occupied property	-	(128)
Profit on disposal of property, plant & equipment	(40)	-
Share-based provisions	744	751
Depreciation of tangible assets	95	135
Depreciation of right of use asset	125	-
	(4,638)	(13,597)

 

23. Obligations under leases

Lease liabilities are presented in the Consolidated Balance Sheet as follows:

	2026 £000	2025 £000
Current
Occupational lease liability	160	-
Head lease liability	116	115
	276	115
Non-current
Occupational lease liability	935	-
Head lease liability	2,544	2,558
	3,479	2,558
	3,755	2,673

 

The Group has entered into a number of head leases in relation to its investment properties. These leases are for fixed terms and subject to regular rent reviews. They contain no material provisions for contingent rents, renewal or purchase options nor any restrictions outside of the normal lease terms.

In September 2025 a new occupational lease was entered into in respect of the Group's head office. The lease is for a ten-year term, with the option to break at the end of five years.

Lease liabilities in respect of rents payable on the occupational lease and head leases are as follows:

	2026			2025
	Head lease £000	Occupational lease £000		Head lease £000	Occupational lease £000
Future minimum payments due:
Within one year	185	228		185	-
In the second to fifth years inclusive	740	1,041		740	-
After five years	8,342	-		8,527	-
	9,267	1,269		9,452	-
Less: finance charges allocated to future periods	(6,607)	(174)		(6,779)	-
Present value of minimum lease payments	2,660	1,095		2,673	-

 

For interest expense in relation to lease liabilities, refer to Note 8.

Operating leases where the Group is lessor

The Group leases its investment properties under commercial property leases which are held as operating leases.

At the reporting date, the Group's undiscounted future income based on the unexpired lease length was as follows (based on annual rentals):

	2026 £000	2025 £000
Within one year	39,774	44,938
One to two years	37,417	38,906
Two to three years	34,439	35,263
Three to four years	31,086	31,903
Four to five years	27,210	28,594
After five years	138,282	135,958
	308,208	315,562

 

These properties are measured under the fair value model as the properties are held to earn rentals. Commercial property leases typically have lease terms between five and ten years and include clauses to enable periodic upward revision of the rental charge according to prevailing market conditions. Some leases contain options to break before the end of the lease term.

 

24. Net asset value

The net asset value per share calculation uses the number of shares in issue at the year end and excludes the actual number of shares held by the Employee Benefit Trust at the year end; see Note 21.

 

25. Financial instruments

The Group's financial instruments comprise cash and cash equivalents, accounts receivable, secured loans and accounts payable that arise from its operations. The Group does not have exposure to any derivative financial instruments. Apart from the secured loans, as disclosed in Note 19, the fair value of the financial assets and liabilities is not materially different from their carrying value in the financial statements.

Categories of financial instruments

31 March 2026	Notes	Held at fair value through profit or loss £000	Amortised  cost £000	Total £000
Financial assets
Debtors	16	-	4,466	4,466
Cash and cash equivalents	17	-	43,259	43,259
		-	47,725	47,725
Financial liabilities
Loans and borrowings	19	-	206,613	206,613
Creditors and accruals	18	-	14,792	14,792
		-	221,405	221,405

 

31 March 2025	Notes	Held at fair value through profit or loss £000	Amortised cost £000	Total £000
Financial assets
Debtors	16	-	4,035	4,035
Cash and cash equivalents	17	-	35,320	35,320
		-	39,355	39,355
Financial liabilities
Loans and borrowings	19	-	208,541	208,541
Creditors and accruals	18	-	11,511	11,511
		-	220,052	220,052

 

26. Risk management

The Group invests in commercial properties in the United Kingdom. The following describes the risks involved and the risk management framework applied by the Group. Senior management reports regularly both verbally and formally in writing to the Board, and its relevant Committees, to allow them to monitor and review all the risks noted below.

Capital risk management

The Group aims to manage its capital to ensure that the entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through optimising its capital structure. The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business.

The capital structure of the Group consists of debt, as disclosed in Note 19, cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued share capital, retained earnings and other reserves. The Group is not subject to any external capital requirements.

The Group monitors capital primarily on the basis of its gearing ratio. This ratio is calculated as the principal borrowings outstanding, as detailed under Note 19, divided by the gross assets. There is a limit of 65% as set out in the Articles of Association of the Company. Gross assets are calculated as non-current and current assets, as shown in the Consolidated Balance Sheet.

At the reporting date the gearing ratios were as follows:

	2026 £000	2025 £000
Total borrowings	208,072	209,636
Gross assets	751,653	764,640
Gearing ratio (must not exceed 65%)	27.7%	27.4%

 

The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group has managed its financing risk by entering into long-term loan arrangements with different maturities, which will enable the Group to manage its borrowings in an orderly manner over the long term. The Group also has a revolving credit facility which provides greater flexibility in managing the level of borrowings.

The Group's net debt to equity ratio at the reporting date was as follows:

	2026 £000	2025 £000
Total liabilities	229,670	231,262
Less: cash and cash equivalents	(43,259)	(35,320)
Net debt	186,411	195,942
Total equity	521,983	533,378
Net debt to equity ratio at end of year	0.36	0.37

 

Credit risk

The following tables detail the balances held at the reporting date that may be affected by credit risk:

31 March 2026	Notes	Held at fair value through profit or loss £000	Financial assets and liabilities at amortised cost £000	Total £000
Financial assets
Tenant debtors	16	-	2,837	2,837
Lease receivable	15	-	8,927	8,927
Cash and cash equivalents	17	-	43,259	43,259
		-	55,023	55,023

 

31 March 2025	Notes	Held at fair value through profit or loss £000	Financial assets and liabilities at amortised cost £000	Total £000
Financial assets
Tenant debtors	16	-	3,034	3,034
Cash and cash equivalents	17	-	35,320	35,320
		-	38,354	38,354

 

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Tenant debtors consist of a large number of occupiers, spread across diverse industries and geographical areas. Ongoing credit evaluations are performed on the financial condition of tenant debtors and, where appropriate, credit guarantees or rent deposits are acquired. As at 31 March 2026, tenant rent deposits held by the Group's managing agents in segregated bank accounts totalled £1.5 million (2025: £2.5 million). The Group does not have access to these rent deposits unless the occupier defaults under its lease obligations. Rent collection is outsourced to managing agents who report regularly on payment performance and provide the Group with intelligence on the continuing financial viability of occupiers. The Group does not have any significant concentration risk whether in terms of credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with strong credit ratings assigned by international credit rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group's maximum exposure to credit risk. The Board continues to monitor the Group's overall exposure to credit risk.

The Group has a panel of banks with which it makes deposits, based on credit ratings assigned by international credit rating agencies and with set counterparty limits that are reviewed regularly. The Group's main cash balances are held with National Westminster Bank Plc (NatWest), Nationwide International Limited (Nationwide), Santander plc (Santander) and Lloyds Bank Plc (Lloyds). Insolvency or resolution of the bank holding cash balances may cause the Group's recovery of cash held by them to be delayed or limited. The Group manages its risk by monitoring the credit quality of its bankers on an ongoing basis. NatWest, Nationwide, Santander and Lloyds are rated by all the major rating agencies. If the credit quality of any of these banks were to deteriorate, the Group would look to move the relevant short-term deposits or cash to another bank. Procedures exist to ensure that cash balances are split between banks to reduce overall exposure to credit risk. At 31 March 2026 and at 31 March 2025, Standard & Poor's short-term credit rating for each of the Group's bankers was A-1.

There has been no change in the fair values of cash or receivables as a result of changes in credit risk in the current or prior periods, due to the actions taken to mitigate this risk, as stated above.

Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board, which has put in place an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group's liquidity risk is managed on an ongoing basis by senior management and monitored on a quarterly basis by the Board by maintaining adequate reserves and loan facilities, continuously monitoring forecasts, loan maturity profiles and actual cash flows and matching the maturity profiles of financial assets and liabilities for a period of at least 12 months.

The table below has been drawn up based on the undiscounted contractual maturities of the financial assets/(liabilities), including interest that will accrue to maturity.

31 March 2026	Less than 1 year £000	1 to 5 years £000	More than 5 years £000	Total £000
Cash and cash equivalents	43,986	-	-	43,986
Debtors	4,466	-	-	4,466
Lease receivable	75	302	8,550	8,927
Obligations under leases	(413)	(1,781)	(8,342)	(10,536)
Fixed interest rate loans	(9,262)	(37,049)	(205,842)	(252,153)
Creditors and accruals	(14,792)	-	-	(14,792)
	24,060	(38,528)	(205,634)	(220,102)

 

31 March 2025	Less than 1 year £000	1 to 5 years £000	More than 5 years £000	Total £000
Cash and cash equivalents	35,800	-	-	35,800
Debtors	4,035	-	-	4,035
Obligations under leases	(185)	(740)	(8,527)	(9,452)
Fixed interest rate loans	(9,262)	(37,049)	(215,104)	(261,415)
Creditors and accruals	(11,511)	-	-	(11,511)
	18,877	(37,789)	(223,631)	(242,543)

 

The Group expects to meet its financial liabilities through the various available liquidity sources, including a secure rental income profile, asset sales, undrawn committed borrowing facilities as referenced in note 19 and, in the longer term, debt refinancing.

Market risk

The Group's activities are primarily within the real estate market, exposing it to very specific industry risks.

The yields available from investments in real estate depend primarily on the amount of revenue earned and capital appreciation generated by the relevant properties, as well as expenses incurred. If properties do not generate sufficient revenues to meet operating expenses, including debt service costs and capital expenditure, the Group's operating performance will be adversely affected.

Revenue from properties may be adversely affected by the general economic climate, local conditions such as oversupply of properties or a reduction in demand for properties in the market in which the Group operates, the attractiveness of the properties to occupiers, the quality of the management, competition from other available properties and increased operating costs.

In addition, the Group's revenue would be adversely affected if a significant number of occupiers were unable to pay rent or its properties could not be rented on market terms. Certain significant expenditure associated with investment in real estate (such as external financing costs and maintenance costs) is generally not reduced when circumstances cause a reduction in revenue from properties. By diversifying in regions, sectors, risk categories and occupiers, management expects to mitigate the risk profile of the portfolio effectively. The Board continues to oversee the profile of the portfolio to ensure these risks are managed.

The valuation of the Group's property assets is subject to changes in market conditions. Such changes are taken to the Consolidated Statement of Comprehensive Income and thus impact on the Group's net result. A 5% increase or decrease in property values would increase or decrease the Group's net result by £35.0 million (2025: £36.2 million).

Interest rate risk management

The Group's exposure to interest rate risk arises primarily from its borrowings, it manages this risk by entering into long-term fixed rate debt facilities. Interest rate risk arises on interest payable on the revolving credit facility only. The revolving credit facility remains undrawn, therefore the Group has limited exposure to interest rate risk on its borrowings and no sensitivity is presented.

The Group's senior debt facilities have fixed interest rates over the terms of the loans. The Group does not account for any fixed-rate financial assets or financial liabilities, at fair value through profit or loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss. The fair value of the drawn loan facilities at 31 March 2026, estimated as the present value of future cash flows discounted at the market rate of interest at that date, was £186.2 million (2025: £183.5 million).

Interest rate risk

The following table sets out the carrying amount, by maturity, of the Group's financial assets/(liabilities).

31 March 2026	Less than  1 year £000	1 to 5 years £000	More than 5 years £000	Total £000
Floating
Cash and cash equivalents	43,259	-	-	43,259
Fixed
Secured loan facilities	(1,633)	(7,294)	(199,145)	(208,072)
Obligations under leases	(276)	(1,353)	(2,126)	(3,755)
	41,350	(8,647)	(201,271)	(168,568)

 

31 March 2025	Less than 1 year £000	1 to 5 years £000	More than 5 years £000	Total £000
Floating
Cash and cash equivalents	35,320	-	-	35,320
Fixed
Secured loan facilities	(1,564)	(6,983)	(201,089)	(209,636)
Obligations under leases	(115)	(413)	(2,145)	(2,673)
	33,641	(7,396)	(203,234)	(176,989)

 

Concentration risk

As discussed above, all of the Group's investments are in the UK and therefore the Group is exposed to macroeconomic changes in the UK economy. Furthermore, the Group derives its rental income from around 300 occupiers, although the largest occupier accounts for only 4.3% of the Group's annual contracted rental income.

Currency risk

The Group has no exposure to foreign currency risk.

 

27. Related party transactions

The total fees earned during the year by the Non-Executive Directors of the Company amounted to £308,000 (2025: £298,000). As at 31 March 2026, the Group owed £nil to the Non-Executive Directors (2025: £nil).

The remuneration of the Executive Directors is set out in Note 7 and in the Annual Remuneration Report. Picton Property Income Limited has no controlling parties.

 

28. Events after the balance sheet date

A dividend of £4,852,000 (0.95 pence per share) was approved by the Board on 27 April 2026 and paid on 29 May 2026.

The revolving credit facility held with National Westminster Bank Plc has been extended by a further 12 months to April 2029. The facility remains undrawn.

On 12 May 2026, a non-binding indicative all-share offer ('Proposed Offer') from LondonMetric Property Plc and Schroder Real Estate Investment Trust Limited was announced. The Company is engaging with all stakeholders, with negotiations and due diligence ongoing.

 

END