12th Jul 2005 10:30
Land Securities Group Plc12 July 2005 12 July 2005 LAND SECURITIES GROUP PLC ("Land Securities" / "Group") ANNUAL GENERAL MEETING Peter Birch, Chairman, and Francis Salway, Group Chief Executive, will make thefollowing remarks at the Group's Annual General Meeting to be held today at11.00 am in The Sainsbury Wing Theatre, The National Gallery, Trafalgar Square,London WC2N 5DN. Peter Birch, Chairman: "It has been a good year for the business, which has been firing on allcylinders. Since taking the Chair at Land Securities, I have been delighted tosee how the company has been transformed and re-invigorated - how new peoplehave brought new ideas and new ways of working and how long-standing employeeshave adapted and moved with the organisation. That the Group has changed somuch, while remaining true to its core values, is a credit to the organisationand the people who work there. "It is also a credit to the executive management team. They have led a team ofsome 2,000 people across the UK delivering high levels of activity -outperforming the industry benchmark, the Investment Property Databank,completing and letting numerous major development projects, buying and sellingnearly £1.5bn of investment property and winning new property outsourcingcontracts. And, if the year to March 2005 was notable for one event, it was the£3.2bn refinancing of our business. This transaction has provided the Groupwith substantial financial flexibility, given debt holders better rated bondsand will create an annual cash interest saving of some £25m per annum. "The actions taken and being taken by the management team continue to deliverresults. Earnings per share (adjusted for the accounting impact of the debtrestructuring) were up some 43.5% and net asset value, even after a 102preduction, caused by the debt restructuring, still increased some 9.7%. "This strong performance has enabled your Board to recommend a substantialincrease in the final dividend this year to 32.85p making a total for the yearof 43.25p, up 16.6%. While we anticipate a more modest growth rate in future,we are pleased that this will be from the higher base." Francis Salway, Group Chief Executive: "This year on the front of our Annual Report, we posed the question - Propertytoday: what differentiates a leader from a follower? I hope that you will agreewith me that our strategy and strong financial performance has created a pointof differentiation for Land Securities. I believe that our strategy - which hasfocused our activities in areas of the property market where we have advantagesof scale and expertise - has provided us with the competitive positioning tothrive and grow. "At the AGM last year we talked about our plans to focus our activities on threecore areas of the commercial property market, Retail property, London officesand Property outsourcing while retaining the scope for opportunism. "This restructuring resulted in a further notable event for the Group - theproperty swap with Slough Estates. This £700m transaction - and I believe thatit was the largest and first of its kind - saw us exchange the vast majority ofour industrial portfolio for retail property, enabling us to exit successfullythe industrial market and gain a portfolio of retail property with manyattractive opportunities for generating value. "Across the entire Group, levels of activity were high and remain so. We wereparticularly successful in securing major new occupational contracts across allthree of our core sectors. We leased or disposed of more than 1.5 million sq ftfrom our London office development programme, secured key anchor store lettingsfor our retail development schemes in Exeter and Bristol and won three newproperty outsourcing contracts for Land Securities Trillium with Norwich Union,Barclays and DVLA. "Since the year-end, we have acquired a number of retail properties through twokey transactions - the purchase of Tops Estates PLC (a shopping centreinvestment and development company) and LxB (a specialist private retailproperty company). Both of these were corporate acquisitions which we believebring a number of benefits to shareholders. As a result, we now own or have ajoint venture interest in 28 shopping centres and 30 retail warehouse parks.Today we announced a further acquisition of The Fort, Westwood Cross, a 390,000sq ft out of town shopping centre in Thanet, Kent. "In terms of the retail market, the rate of growth in retail sales has fallenbut there is still positive growth in sales in absolute terms and we remainconfident in the attractions of good quality retail assets protected by thetight planning controls found in the UK. "In London we unveiled our plans for One New Change and have continued to markgood progress with our development programme and our letting activity - asdemonstrated by today's announcement of a further letting to P&O and ouradvanced negotiations with Rentokil for offices at Cardinal Place, the finalphase of which will be completed this Autumn. "Land Securities Trillium came of age last year, in terms of recognition of theproduct by both investors and major occupiers, and also in terms of the 50%growth in Trillium's operating profit over the year. It is actively preparingto bid on new contracts this year, including the Government's Building Schoolsfor the Future programme, the Ministry of Defence London Estate and the NorthernIreland Civil Estate. "This is an opportune moment for me to remind you that we will be reporting ourInterim Results later this year under International Financial ReportingStandards ("IFRS"). Under IFRS, a number of things will change, including theway in which we have accounted for the debt restructuring, but we will provide aclear explanation of the changes when we announce our Interims. We will thenalso provide a reconciliation to numbers calculated under the current UK GAAPaccounting policies. "Finally, I would like to comment briefly on progress on the potentialintroduction of Real Estate Investment Trusts. Since last year, good progresshas been made by Government and we were very pleased that the Government took onboard many of the comments and suggestions in both our and the industry'srepresentations when it published its most recent consultation document. Thisdocument outlined some technical issues still to be addressed, to whichweresponded earlier this year. "We are now waiting for Government to publish its full proposals. In the rightform, we believe that REITs will make an excellent investment vehicle forproperty and will continue the renaissance of property as an asset class." For further information, please contact: Francis Salway/Emma DenneLand Securities Group PLCTel: +44 (0)20 7413 9000 Stephanie HighettFinancial DynamicsTel: +44 (0)20 7831 3113 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Land Securities