Palace Capital Reports Profit Turnaround and Strong Cash Position in FY25 Results
Why we think this is good
Palace Capital has demonstrated a significant turnaround in profitability, reporting a £1.4m profit before tax compared to a £9.3m loss in the previous year. The company has successfully executed its strategy of returning capital to shareholders through property disposals, which has led to a planned reduction in revenue. Importantly, they've strengthened their financial position by becoming entirely debt-free and increasing their cash balance to £22.2m. The EPRA NTA per share saw a modest decrease of 4.2%, primarily due to property revaluations. Despite challenging market conditions, the company's strategic approach appears to be effective, with plans for further capital returns to shareholders. This balanced execution of their strategy, improved profitability, and robust financial position support a positive outlook.
Key Points
- Profit before tax of £1.4m, up from £9.3m loss last year
- Cash position increased to £22.2m from £19.8m
- Company is now debt-free after repaying all borrowings
- EPRA NTA per share decreased 4.2% to 251p
- Gross property income reduced to £6.9m from £12.1m due to planned disposals
- £21.7m returned to shareholders through tender offer in July 2024
- Further cash return to shareholders planned for July 2025
- Total property portfolio valuation reduced by 5.9% on a like-for-like basis
- Rent collection remained strong at 99% throughout the year
- Administrative expenses reduced by £1.1m in FY25
Summary
Palace Capital plc has reported its preliminary results for the year ended 31 March 2025, showing a significant improvement in financial performance. Key highlights include:
- Profit before tax of £1.4m, compared to a loss of £9.3m in the previous year
- Strong cash position of £22.2m, up from £19.8m
- Became debt-free by repaying all outstanding borrowings
- Continued execution of capital return strategy through property disposals and share buybacks
- EPRA NTA per share decreased by 4.2% to 251p, mainly due to property revaluation deficit
- Plans for further cash return to shareholders via a tender offer expected in July
While gross property income decreased from £12.1m to £6.9m due to planned property disposals, this aligns with the company's strategy. The company's strong financial position and successful execution of its strategy provide a solid foundation for future shareholder returns.