Strategic Report
Governance
Financial Statements
Additional Information
We consider that industry standard measures, such as those calculated by MSCI, are appropriate to use alongside certain EPRA measures and others that are relevant to us. In this regard, we consider that the EPRA net tangible asset per share (EPRA NTA), earnings per share and vacancy rate are the most appropriate measures to use in assessing our performance. Key performance indicators are also used to determine variable remuneration rewards for the Executive Directors and the rest of the Picton team. The indicators used are total return, total shareholder return, total property return and EPRA earnings per share. This is set out more fully in the Remuneration Report.
For more information on EPRA Best Practices Recommendations see pages 155–158
Remuneration Link
Property income return (%)
Loan to value ratio (%)
Cost ratio (%)
D
E
F
2023 2022 2021 2023 2022 2021
2023 2022 2021 2023 2022 2021
2023 2022 2021 2023 2022 2021
4.4
26.7
85 1.0 1.0 1.0
82 82
76
67
4.5
21.2
71
37
4.7
20.9
64
88
Why we use this indicator The loan to value ratio is total Group borrowings, net of cash, as a percentage of the total portfolio value. This is a recognised measure of the Company’s level of borrowings and is a measure of financing risk. See the Supplementary Disclosures section for further details.
Why we use this indicator The cost ratio, recurring administration expenses as a proportion of the average net asset value, shows how efficiently the business is being run, and the extent to which economies of scale are being achieved. See the Supplementary Disclosures section for further details.
Why we use this indicator The property income return, as calculated by MSCI, is the income return of the portfolio. Income is an important component of total return and our portfolio is biased towards income generation.
1
1
1
3
3
3
2
2
2
Our performance in 2023 The cost ratio has been maintained at 1.0%, despite the inflationary impact on costs and the lower valuations over the year.
Our performance in 2023 Although there was only a marginal increase in borrowings this year, the loan to value ratio has increased, reflecting adverse movements in property valuations.
Our performance in 2023 The income return for the year of 4.4% was ahead of the MSCI UK Quarterly Property Index of 4.1%, and we have also outperformed over three, five and ten years, and since inception.
Picton Property Income Limited Annual Report 2023
23
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