14th Aug 2014 07:42
LONDON (Alliance News) - Property investment company Derwent London PLC Thursday reported an increase in profit for the first half, following strong valuations gains.
The London-focused company, which bought a Holborn office block for GBP59.3 million in January, posted pretax profit of GBP371.4 million for the six months to June 30, up from GBP219.8 million a year earlier, boosted by revaluation gains of GBP330.8 million compared with GBP175.3 million a year earlier.
Gross property and other income rose to GBP83.2 million from GBP77.8 million a year earlier.
The real estate investment trust said its EPRA net asset value per share increased 14% to 2,572 pence from 2,264 pence at December 31. EPRA is the European Public Real Estate Association, the industry body for European REITs.
Derwent said, although recurring earnings have grown, the majority of the increase in net asset value was due to another strong portfolio valuation surplus.
At an operating level, the company disposed of its Prague joint venture, a legacy from its merger with London Merchant Securities PLC in 2007, for GBP6.8 million.
In terms of acquisitions, Derwent said it was a quiet period although it bought an office block near Old Street underground station for GBP12.4 million.
Overall, the company said its portfolio was valued at GBP3.74 billion.
FTSE 250-listed Derwent said it is operating in "favourable" market conditions, although it recognises that there are significant political and global risks, such as next year's general election, and a number of international trouble spots.
However, it said: "Our business model retains considerable flexibility which enables us to alter course if the economy slows or occupational demand weakens."
On the back of its performance the company increases its interim dividend to 11.65 pence from 10.75 pence a year earlier.
The stock was quoted up 2.5% at 2,743.00 pence Thursday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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