14th May 2019 08:47
LONDON (Alliance News) - Land Securities Group PLC on Tuesday said it had a strong year operationally in financial 2019 but saw a widened loss against a backdrop of political uncertainty and well-documented difficulties in the UK retail sector.
For the year ended March 31, the company's pretax loss widened to GBP123 million from a GBP43 million loss the year before.
However, adjusted pretax profit was up 8.9% to GBP442 million from GBP406 million last year, reflecting the benefit of income from completed developments, high occupancy, and the effect of refinancing bonds in the previous financial year.
Liberum forecast the real estate investment trust to report GBP428.4 million in adjusted pretax profit.
At March 31, Land Securities net asset value per share stood at 1,341 pence compared to 1,404p at the same time last year, a 4.5% decrease.
The company raised its total dividend 3.1% to 45.55p from 44.20p last year.
"We've had a strong year operationally, maintaining high occupancy, expanding our development pipeline and delivering new products and services, including our Myo flexible offer. This is against the backdrop of political gridlock and the well-publicised difficulties in the retail market," said Chief Executive Robert Noel.
The company's combined portfolio was valued at GBP13.8 billion at the end of the financial year after seeing a GBP557 million valuation deficit in the period. Land Securities attributed the drop on the "weak" retail market.
The company's loan-to-value ratio ended the financial year at 27.1% compared to 25.8% the year before.
Land Securities' group like-for-like net rental income increased 1.9% to GBP618 million, with a 7.9% increase from its London portfolio and a 3.6% rise from its Retail portfolio.
The trust's London portfolio had a total property return of 3.5% in financial 2019 whereas the company's Retail portfolio lost 3.4%.
Going forward, the real estate investment trust said it will focus on its London portfolio as it sees no near-term improvement in retail market conditions.
"Rental values are likely to decline further in shopping centres and retail parks, though we expect continued rental growth in outlets and select leisure destinations. Consumers will continue to be attracted to destinations that provide a broad range of brands and experiences," the company said.
In a statement, Land Securities added: "Our activities in London as a percentage of our portfolio will increase in the coming years. Much of our portfolio by value and our entire development pipeline is already in the capital and we are alert to further opportunities. Over time, capital allocated to assets outside London will reduce, but we will maintain our focus on experience-led destinations."
Noel added: "Landsec is in a healthy financial position. We have a clear sense of where current and future opportunities lie and are well placed to address our customers' changing needs, and deliver sustained value creation for our shareholders. This is an exciting time for real estate companies with the insight and capabilities needed to create the spaces for tomorrow's businesses and communities."
Shares in Land Securities were down 0.4% Tuesday morning at 888.60 pence each.
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