LSE:DLN

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Derwent London plc owns 83 buildings in a commercial real estate portfolio predominantly in central London valued at £5.4 billion (including joint ventures) as at 30 June 2020, making it the largest London-focused real estate investment trust (REIT). More Details


Snowflake Analysis

Reasonable growth potential average dividend payer.


Similar Companies

Share Price & News

How has Derwent London's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DLN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.3%

DLN

3.1%

GB REITs

0.1%

GB Market


1 Year Return

-20.4%

DLN

-19.2%

GB REITs

-15.4%

GB Market

Return vs Industry: DLN underperformed the UK REITs industry which returned -19.2% over the past year.

Return vs Market: DLN underperformed the UK Market which returned -15.4% over the past year.


Shareholder returns

DLNIndustryMarket
7 Day5.3%3.1%0.1%
30 Day18.3%4.4%1.1%
90 Day-1.5%-18.1%-2.0%
1 Year-18.4%-20.4%-22.1%-19.2%-12.1%-15.4%
3 Year14.7%4.8%-9.2%-8.6%-8.4%-19.7%
5 Year-17.1%-28.0%-15.9%-20.1%16.4%-9.7%

Price Volatility Vs. Market

How volatile is Derwent London's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Derwent London undervalued compared to its fair value and its price relative to the market?

17.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DLN (£27.92) is trading below our estimate of fair value (£33.75)

Significantly Below Fair Value: DLN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: DLN is poor value based on its PE Ratio (22x) compared to the GB REITs industry average (16.6x).

PE vs Market: DLN is poor value based on its PE Ratio (22x) compared to the UK market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: DLN is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: DLN's PB Ratio (0.7x) is in line with the GB REITs industry average.


Next Steps

Future Growth

How is Derwent London forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

72.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLN's forecast earnings growth (72.7% per year) is above the savings rate (1.2%).

Earnings vs Market: DLN's earnings (72.7% per year) are forecast to grow faster than the UK market (24.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DLN's revenue (7.5% per year) is forecast to grow faster than the UK market (6% per year).

High Growth Revenue: DLN's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DLN's Return on Equity is forecast to be low in 3 years time (5.5%).


Next Steps

Past Performance

How has Derwent London performed over the past 5 years?

-28.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DLN has a large one-off gain of £23.9M impacting its June 30 2020 financial results.

Growing Profit Margin: DLN's current net profit margins (59.5%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: DLN's earnings have declined by 28.2% per year over the past 5 years.

Accelerating Growth: DLN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DLN had negative earnings growth (-35.5%) over the past year, making it difficult to compare to the REITs industry average (-20.8%).


Return on Equity

High ROE: DLN's Return on Equity (3.1%) is considered low.


Next Steps

Financial Health

How is Derwent London's financial position?


Financial Position Analysis

Short Term Liabilities: DLN's short term assets (£314.8M) exceed its short term liabilities (£116.1M).

Long Term Liabilities: DLN's short term assets (£314.8M) do not cover its long term liabilities (£1.2B).


Debt to Equity History and Analysis

Debt Level: DLN's debt to equity ratio (25.9%) is considered satisfactory.

Reducing Debt: DLN's debt to equity ratio has increased from 24.3% to 25.9% over the past 5 years.

Debt Coverage: DLN's debt is not well covered by operating cash flow (7.4%).

Interest Coverage: DLN's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet


Next Steps

Dividend

What is Derwent London current dividend yield, its reliability and sustainability?

2.59%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DLN's dividend (2.59%) is higher than the bottom 25% of dividend payers in the UK market (1.81%).

High Dividend: DLN's dividend (2.59%) is low compared to the top 25% of dividend payers in the UK market (5.24%).


Stability and Growth of Payments

Stable Dividend: DLN's dividend payments have been volatile in the past 10 years.

Growing Dividend: DLN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (95.7%), DLN's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DLN's dividends in 3 years are forecast to be covered by earnings (67.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.7yrs

Average management tenure


CEO

Paul Williams (59 yo)

1.42yrs

Tenure

UK£2,293,000

Compensation

Mr. Paul Malcolm Williams has been the Chief Executive Officer of Derwent London Plc since May 17, 2019 and has been its Executive Director since 1998. Mr. Williams served as a Propery Director of Derwent ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD2.99M) is above average for companies of similar size in the UK market ($USD2.04M).

Compensation vs Earnings: Paul's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Paul Williams
CEO & Director1.42yrsUK£2.29m0.065%
£ 2.0m
Simon Silver
Co-Founder34.75yrsUK£2.70m0.14%
£ 4.3m
Damian Mark Wisniewski
CFO & Executive Director10.67yrsUK£2.07m0.046%
£ 1.5m
Nigel George
Property Director & Executive Director22.75yrsUK£2.08m0.067%
£ 2.1m
David Silverman
Property Director & Executive Director12.75yrsUK£2.07m0.043%
£ 1.4m
Giles Sheehan
Head of Investmentno datano datano data
Freeman Quentin
Head of Investor Relations & Corporate Communicationsno datano datano data
Katy Levine
Head of Human Resourcesno datano datano data
John Davies
Head of Sustainability7.75yrsno datano data
David Westgate
Group Head of Taxno datano datano data
Jennifer Whybrow
Head of Financial Planning & Analysis3.58yrsno datano data
Emily Prideaux
Head of Leasingno datano datano data

5.7yrs

Average Tenure

58yo

Average Age

Experienced Management: DLN's management team is seasoned and experienced (5.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Williams
CEO & Director1.42yrsUK£2.29m0.065%
£ 2.0m
Simon Silver
Co-Founder34.75yrsUK£2.70m0.14%
£ 4.3m
Damian Mark Wisniewski
CFO & Executive Director10.67yrsUK£2.07m0.046%
£ 1.5m
Nigel George
Property Director & Executive Director22.75yrsUK£2.08m0.067%
£ 2.1m
David Silverman
Property Director & Executive Director12.75yrsUK£2.07m0.043%
£ 1.4m
Dame Snowball
Independent Non-Executive Director5.08yrsUK£67.00kno data
Lucinda Bell
Independent Non-Executive Director1.75yrsUK£67.00k0.00089%
£ 27.8k
John Burns
Founder & Non-Executive Chairman1.42yrsUK£2.19m0.40%
£ 12.5m
Simon William Fraser
Senior Independent Directorno dataUK£77.00k0.0018%
£ 55.9k
Helen Gordon
Independent Non-Executive Director2.75yrsUK£56.00k0.00080%
£ 25.0k
Richard D. Dakin
Independent Non-Executive Director7.17yrsUK£67.00kno data
Claudia Arney
Independent Non-Executive Director5.42yrsUK£71.00k0.0022%
£ 69.7k

7.2yrs

Average Tenure

57.5yo

Average Age

Experienced Board: DLN's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Derwent London Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Derwent London Plc
  • Ticker: DLN
  • Exchange: LSE
  • Founded:
  • Industry: Office REITs
  • Sector: Real Estate
  • Market Cap: UK£3.126b
  • Shares outstanding: 111.95m
  • Website: https://www.derwentlondon.com

Number of Employees


Location

  • Derwent London Plc
  • 25 Savile Row
  • London
  • East Lothian
  • W1S 2ER
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DWVY.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
DLNLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
DVKDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
DLNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992

Biography

Derwent London plc owns 83 buildings in a commercial real estate portfolio predominantly in central London valued at £5.4 billion (including joint ventures) as at 30 June 2020, making it the largest London ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/24 21:48
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.