OTCPK:DWVY.F

Stock Analysis Report

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Executive Summary

Derwent London plc owns 82 buildings in a commercial real estate portfolio predominantly in central London valued at £5.5 billion (including joint ventures) as at 31 December 2019, making it the largest London-focused real estate investment trust (REIT).


Snowflake Analysis

Adequate balance sheet 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: DWVY.F has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

DWVY.F

4.6%

US REITs

2.8%

US Market


1 Year Return

-16.0%

DWVY.F

-9.7%

US REITs

9.3%

US Market

Return vs Industry: DWVY.F underperformed the US REITs industry which returned -10.1% over the past year.

Return vs Market: DWVY.F underperformed the US Market which returned 9.9% over the past year.


Shareholder returns

DWVY.FIndustryMarket
7 Day0%4.6%2.8%
30 Day0%5.6%8.9%
90 Dayn/a-14.3%-0.5%
1 Year-16.0%-16.0%-5.9%-9.7%11.8%9.3%
3 Year-11.1%-11.1%11.3%-2.5%31.4%22.7%
5 Year-32.0%-32.0%42.0%12.7%58.7%40.9%

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

No news available

Valuation

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

11.58x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DWVY.F ($34.16) is trading above our estimate of fair value ($26.24)

Significantly Below Fair Value: DWVY.F is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DWVY.F is good value based on its PE Ratio (11.6x) compared to the REITs industry average (27.4x).

PE vs Market: DWVY.F is good value based on its PE Ratio (11.6x) compared to the US market (15.7x).


Price to Earnings Growth Ratio

PEG Ratio: DWVY.F's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: DWVY.F is good value based on its PB Ratio (0.7x) compared to the US REITs industry average (1.3x).


Next Steps

Future Growth

How is Derwent London forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DWVY.F's earnings are forecast to decline over the next 3 years (-2.1% per year).

Earnings vs Market: DWVY.F's earnings are forecast to decline over the next 3 years (-2.1% per year).

High Growth Earnings: DWVY.F's earnings are forecast to decline over the next 3 years.

Revenue vs Market: DWVY.F's revenue (4.5% per year) is forecast to grow slower than the US market (8.8% per year).

High Growth Revenue: DWVY.F's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DWVY.F's Return on Equity is forecast to be low in 3 years time (3.9%).


Next Steps

Past Performance

How has Derwent London performed over the past 5 years?

-30.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DWVY.F has a large one-off gain of £170.2M impacting its December 31 2019 financial results.

Growing Profit Margin: DWVY.F's current net profit margins are higher than last year (96.8%).


Past Earnings Growth Analysis

Earnings Trend: DWVY.F's earnings have declined by -30.4% per year over the past 5 years.

Accelerating Growth: DWVY.F's earnings growth over the past year (27.5%) exceeds its 5-year average (-30.4% per year).

Earnings vs Industry: DWVY.F earnings growth over the past year (27.5%) exceeded the REITs industry 5.3%.


Return on Equity

High ROE: DWVY.F's Return on Equity (6.2%) is considered low.


Next Steps

Financial Health

How is Derwent London's financial position?


Financial Position Analysis

Short Term Liabilities: DWVY.F's short term assets (£272.4M) exceed its short term liabilities (£113.7M).

Long Term Liabilities: DWVY.F's short term assets (£272.4M) do not cover its long term liabilities (£1.0B).


Debt to Equity History and Analysis

Debt Level: DWVY.F's debt to equity ratio (21.9%) is considered satisfactory.

Reducing Debt: DWVY.F's debt to equity ratio has reduced from 33.9% to 21.9% over the past 5 years.

Debt Coverage: DWVY.F's debt is not well covered by operating cash flow (9.9%).

Interest Coverage: DWVY.F's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet


Next Steps

Dividend

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

2.47%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DWVY.F's dividend (2.47%) is higher than the bottom 25% of dividend payers in the US market (1.69%).

High Dividend: DWVY.F's dividend (2.47%) is low compared to the top 25% of dividend payers in the US market (4.54%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77.9%), DWVY.F's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DWVY.F's dividends in 3 years are forecast to be covered by earnings (68.4% payout ratio).


Next Steps

Management

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

7.4yrs

Average management tenure


CEO

Paul Williams (58yo)

1.08yrs

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 ($USD2.83M) is below average for companies of similar size in the US market ($USD5.91M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Paul Williams
CEO & Director1.08yrsUK£2.29m0.065% £2.6m
Damian Mark Wisniewski
CFO & Executive Director10.33yrsUK£2.07m0.046% £1.9m
Nigel George
Property Director & Executive Director22.42yrsUK£2.08m0.069% £2.8m
Simon Silver
Property Director & Executive Director34.42yrsUK£2.70m0.12% £4.9m
David Silverman
Property Director & Executive Director12.42yrsUK£2.07m0.043% £1.8m
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 Sustainability7.42yrsno datano data
David Westgate
Group Head of Taxno datano datano data

7.4yrs

Average Tenure

57yo

Average Age

Experienced Management: DWVY.F's management team is seasoned and experienced (7.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Williams
CEO & Director1.08yrsUK£2.29m0.065% £2.6m
Damian Mark Wisniewski
CFO & Executive Director10.33yrsUK£2.07m0.046% £1.9m
Nigel George
Property Director & Executive Director22.42yrsUK£2.08m0.069% £2.8m
Simon Silver
Property Director & Executive Director34.42yrsUK£2.70m0.12% £4.9m
David Silverman
Property Director & Executive Director12.42yrsUK£2.07m0.043% £1.8m
Lucinda Bell
Independent Non-Executive Director1.42yrsUK£67.00kno data
John Burns
Founder & Non-Executive Chairman1.08yrsUK£2.19m0.39% £15.8m
Simon William Fraser
Senior Independent Directorno dataUK£77.00k0.0018% £72.7k
Richard D. Dakin
Independent Non-Executive Director6.83yrsUK£67.00kno data
Claudia Arney
Independent Non-Executive Director5.08yrsUK£71.00k0.0022% £90.6k

10.3yrs

Average Tenure

55.5yo

Average Age

Experienced Board: DWVY.F's board of directors are seasoned and experienced ( 10.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: DWVY.F 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: DWVY.F
  • Exchange: OTCPK
  • Founded:
  • Industry: Office REITs
  • Sector: Real Estate
  • Market Cap: UK£3.291b
  • Listing Market Cap: UK£4.062b
  • 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 82 buildings in a commercial real estate portfolio predominantly in central London valued at £5.5 billion (including joint ventures) as at 31 December 2019, making it the largest London-focused real estate investment trust (REIT). Our experienced team has a long track record of creating value throughout the property cycle by regenerating our buildings via development or refurbishment, effective asset management and capital recycling. We typically acquire central London properties off-market with low capital values and modest rents in improving locations, most of which are either in the West End or the Tech Belt. We capitalise on the unique qualities of each of our properties - taking a fresh approach to the regeneration of every building with a focus on anticipating tenant requirements and an emphasis on design. Reflecting and supporting our long-term success, the business has a strong balance sheet with modest leverage, a robust income stream and flexible financing. As part of our commitment to lead the industry in mitigating climate change, in October 2019, Derwent London became the first UK REIT to sign a Green Revolving Credit Facility. At the same time, we also launched our Green Finance Framework and signed the Better Buildings Partnership's climate change commitment. The Group is a member of the 'RE100' which recognises Derwent London as an influential company, committed to 100% renewable power by purchasing renewable energy, a key step in becoming a net zero carbon business. Derwent London is one of only a few property companies worldwide to have science-based carbon targets validated by the Science Based Targets initiative (SBTi). Landmark schemes in our 5.6 million sq ft portfolio include Brunel Building W2, White Collar Factory EC1, Angel Building EC1, 1-2 Stephen Street W1, Horseferry House SW1 and Tea Building E1. In 2019, the Group won several awards including EG Offices Company of the Year, the CoStar West End Deal of the Year for Brunel Building, Westminster Business Council's Best Achievement in Sustainability award and topped the real estate sector and was placed ninth overall in the Management Today 2019 awards for 'Britain's Most Admired Companies'. In 2013 the Company launched a voluntary Community Fund and has to date supported 95 community projects in the West End and the Tech Belt. The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is 25 Savile Row, London, W1S 2ER. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/01 03:38
End of Day Share Price2020/03/23 00:00
Earnings2019/12/31
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.