The British Land Company PLC Half Year Results
LONDON, 2015-11-18 — /EPR Retail News/ — Chris Grigg, Chief Executive said: “We are reporting another strong set of results. In recent years we have positioned our portfolio to benefit from long-term macro trends. This focus has underpinned our performance in the last six months where we have benefited from strong occupational demand and a sound UK economy. Moreover our high quality portfolio and attractive and flexible development opportunities, position us well for the future.”
Strong first half results
- Total accounting return of 9.1% for 6 months to 30 September 2015 (H1 2014/15: 13.7%)
- EPRA NAV +7.5% to 891 pence per share; IFRS Net Assets at £9.3 billion (31 March 2015: £8.6 billion)
- Underlying PBT +10.3% to £171 million; IFRS PBT of £823 million (H1 2014/15: £1,043 million)
- Quarterly dividend of 7.09 pence; bringing the half year to 14.18 pence (+2.5%)
Valuation growth reflecting robust markets and our initiatives
- Total portfolio valuation +4.7%; standing investments +4.5%; developments +8.5%
- Strong uplift in Offices & Residential +8.2%; continued growth in Retail & Leisure +1.8%
- ERV growth of 2.3%; strengthening in Offices and positive in Retail
- Continued outperformance vs IPD: all property returns +10 bps; capital returns +30bps
Strong operating metrics; letting space on good terms
- 573,300 sq ft of leasing across Retail and Offices; 5.7% ahead of ERV; total occupancy of 98.4%
- 365,100 sq ft Retail lettings and renewals; 6.6% ahead of ERV; further 326,600 sq ft under offer
- 208,200 sq ft Office lettings and renewals; 5.0% ahead of ERV; 41,500 sq ft under offer 12% ahead of ERV
- Retail footfall +1.9% (300 bps ahead of market); retailer sales +3.3%
Allocating capital to our strongest assets
- Net investment of £172 million into London and the South East; acquisition of One Sheldon Square, Paddington Central and investment in development more than outweighing sales (includes 39 Victoria Street, SW1); increases London and South East weighting to 65%
- On site at £825 million committed developments; includes Clarges Mayfair and 4 Kingdom Street, Paddington Central; further £80 million Retail capital spend
- £258 million of non-core Retail disposals, including £60 million post period end; investing in our multi-let portfolio to drive performance
Creating opportunities which significantly enhance the scale of our assets
- 535,000 sq ft moved forward to the near-term development pipeline
- Progressing the Broadgate Vision; planning granted on 100 Liverpool Street and resolution to grant planning consent received at 1 Finsbury Avenue; advancing plans on 2-3 Finsbury Avenue
- 230,000 sq ft of leisure extensions to retail assets including Drake Circus, Plymouth and New Mersey Shopping Park, Speke
- Progressing medium-term opportunities including Canada Water
Strong financial position; maintaining capital discipline
- LTV reduced to 34% in line with strategy of not gearing up on market yield shift
- WAIR reduced 20 bps to 3.6%; issue of zero coupon £350 million convertible bond the key driver
- Maintaining capital discipline with selective acquisitions in strong markets
|Income statement||H1 2014/15||H1 2015/16||Change|
|1 Underlying profit before tax excludes capital and other one-off items and is the measure that is used internally to assess the Group’s income performance. This is presented on a proportionally consolidated basis.
2 See Note 2 to the condensed set of financial statements
3 Valuation movement during the period (excluding effect of capital expenditure) of properties held at the balance sheet date, including purchases and sales
|Underlying profit before tax1,2||£155m||£171m||+10.3%|
|IFRS profit before tax||£1,043m||£823m|
|Diluted Underlying EPS2||15.3p||16.0p||+4.6%|
|Dividend per share||13.84p||14.18p||+2.5%|
|Balance sheet||YE 2014/15||H1 2015/16||Change|
|Portfolio at valuation||£13,637m||£14,384m||+4.7%3|
|EPRA Net Asset Value per share||829p||891p||+7.5%|
|IFRS net assets||£8,565m||£9,253m|
|Loan to value ratio||35%||34%|
Investor Conference Call
|A presentation of the results will take place at 9.30am today, 17 November 2015, and will be broadcast live via webcast (www.britishland.com ) and conference call. The details for the conference call are as follows:|
|UK Toll Free Number:||0808 109 0700|
|A dial in replay will be available later in the day and will be available for 7 days. The details are as follows:|
|Replay number:||0208 196 1998|
For Information Contact
|Sally Jones, British Land||020 7467 2847|
|Pip Wood, British Land||020 7467 2838|
|Gordon Simpson, Finsbury||020 7251 3801|
|Guy Lamming, Finsbury|
This Report contains certain ‘forward-looking’ statements. Such statements reflect current views on, among other things, our markets, activities, projections, objectives and prospects. Such ‘forward-looking’ statements can sometimes, but not always, be identified by their reference to a date or point in the future or the use of ‘forward-looking’ terminology, including terms such as ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘due’, ‘plans’, ‘projects’, ‘goal’, ‘outlook’, ‘schedule’ ‘target’, ‘aim’, ‘may’, ‘likely to’, ‘will’, ‘would’, ‘could’, ‘should’ or similar expressions or in each case their negative or other variations or comparable terminology. By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties because they relate to future events and depend on circumstances which may or may not occur and may be beyond our ability to control or predict. Forward-looking statements should be regarded with caution as actual results may differ materially from those expressed in, or implied by, such statements.
Important factors that could cause actual results, performance or achievements of British Land to differ materially from any outcomes or results expressed or implied by such forward-looking statements include, among other things: (a) general business and political, social and economic conditions globally, (b) industry and market trends (including demand in the property investment market and property price volatility), (c) competition, (d) the behaviour of other market participants, (e) changes in government and other regulation, including in relation to the environment, health and safety and taxation (in particular, in respect of British Land’s status as a Real Estate Investment Trust), (f) inflation and consumer confidence, (g) labour relations and work stoppages, (h) natural disasters and adverse weather conditions, (i) terrorism and acts of war, (j) British Land’s overall business strategy, risk appetite and investment choices in its portfolio management, (k) legal or other proceedings against or affecting British Land, (l) reliable and secure IT infrastructure, (m) changes in occupier demand and tenant default, (n) changes in financial and equity markets including interest and exchange rate fluctuations, (o) changes in accounting practices and the interpretation of accounting standards and (p) the availability and cost of finance. The Company’s principal risks are described in greater detail in the section of this Report headed Principal Risks and Uncertainties. Forward-looking statements in this Report, or the British Land website or made subsequently, which are attributable to British Land or persons acting on its behalf should therefore be construed in light of all such factors.
Information contained in this Report relating to British Land or its share price or the yield on its shares are not guarantees of, and should not be relied upon as an indicator of, future performance. Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made. Such forward-looking statements are expressly qualified in their entirety by the factors referred to above and no representation, assurance, guarantee or warranty is given in relation to them (whether by British Land or any of its associates, Directors, officers, employees or advisers), including as to their completeness, accuracy or the basis on which they were prepared.
Other than in accordance with our legal and regulatory obligations (including under the UK Financial Conduct Authority’s Listing Rules and Disclosure Rules and Transparency Rules), British Land does not intend or undertake to update or revise forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of British Land since the date of this document or that the information contained herein is correct as at any time subsequent to this date.
Notes to Editors:
About British Land
We are one of Europe’s largest publicly listed real estate companies. We own, manage, develop and finance a portfolio of high quality commercial property, focused on retail locations around the UK and London offices. We have total assets in the UK, owned or managed of £19.7 billion (of which British Land share is £14.4 billion), as valued at 30 September 2015. Our properties are home to over 1,200 different organisations ranging from international brands to local start-ups. Our objective is to deliver long-term and sustainable total returns to our shareholders and we do this by focusing on Places People Prefer. People have a choice where they work, shop and live and we aim to create outstanding places which make a positive difference to people’s everyday lives. Our customer orientation enables us to develop a deep understanding of the people who use our places. We employ a lean team of experts, who have the skills to translate this understanding into creating the right places, and we have an efficient capital structure which is able to finance these places effectively.
UK Retail assets account for 51% of our portfolio. As the UK’s largest listed owner and manager of retail space, our portfolio is well matched to the different ways people shop today. We are focused on being the destination of choice for retailers and their customers by being the best provider of spaces and services. Comprising around 22 million sq ft of retail space across shopping parks, superstores, shopping centres, department stores and leisure assets, the retail portfolio is modern, flexible and adaptable to a wide range of formats.
Our Office and Residential portfolio, which accounts for 49% of our portfolio is focused on London. We have an attractive mix of high quality buildings in well managed environments and a pipeline of development projects which will add significantly to our portfolio. Increasingly, our Offices are in mixed-use environments which include retail and residential elements. Our 7.5 million sq ft of high quality office space includes Regent’s Place and Paddington Central in the West End and Broadgate, the premier City office campus (50% share).
Our industry-leading sustainability strategy is a powerful tool to deliver lasting value for all our stakeholders. By supporting communities, improving environments and growing economies, we create Places People Prefer and enhance long-term returns. Further details can be found on the British Land website at www.britishland.com
SOURCE: British Land