Land Securities (LAND) was probably ahead of the game a year or so ago when chief executive Robert Noel led a move to reduce risk within the property portfolio, but there was no escaping the damage to sentiment and investment intentions caused by the referendum.
The office and retail landlord has been steadily reducing its speculative exposure while at the same time keeping a tight rein on debt. It has now entered the final phase of a £2.4bn development programme in London, all of which is pre-let except the Victoria development, which is expected to complete in the new year.
Disposals of £90.9m meant that net rental income fell by £6.7m to £298m, but on a like-for-like basis new lettings helped to boost rental growth by £5m. Crucially, the group has continued to concentrate on building a quality portfolio to underpin revenue during the current uncertainty. And income visibility has been considerably enhanced by securing long leases, with the London average extending past 10 years. This has helped the portfolio to outperform the IPD performance benchmark in all sectors apart from retail parks, which performed on a par with the index.
Analysts at Peel Hunt are forecasting adjusted net asset value at the March 2017 year-end of 1,357p (from 1,431p a year before).
| LAND SECURITIES (LAND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,004p | MARKET VALUE: | £7.94bn | |
| TOUCH: | 1,003-1,004p | 12-MONTH HIGH: | 1,258p | LOW: 810p |
| DIVIDEND YIELD: | 3.6% | TRADING PROP: | £127m | |
| DISCOUNT TO NAV: | 31% | |||
| INVESTMENT PROP: | £13.9bn* | NET DEBT: | 26% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 1416 | 708 | 89.7 | 16.3 |
| 2016 | 1449 | -95 | -12.1 | 17.9 |
| % change | +2 | - | - | +10 |
Ex-div**: 1 Dec Payment**: 6 Jan *Includes joint ventures **Refers to second quarterly dividend of 8.95p per share | ||||
