Central London property values continued their upward glide in the first half, buoying the portfolio value of Capital & Counties (CAPC) by 7.5 per cent. More specifically, that reflected progress on planning consent at the developer's large Earls Court site and rising rents in and around the famous Covent Garden piazza. Add modest gearing and CapCo's adjusted net asset value rose 9.5 per cent in just six months to 272p a share.
There may be more to come: despite a 13 per cent value uplift during the period, CapCo's EC 1&2 site is still valued at a 20 per cent discount to the company's nearby Lillie Square development, where 90 per cent of units are now exchanged or reserved. Demolition at EC 1&2 should start early next year and is expected to take 18 months.
A £258m placing in May strengthened CapCo's balance sheet, taking group cash and undrawn committed facilities up to £641m. This should provide the company with the financial flexibility needed to simultaneously progress the Earls Court redevelopment and make further acquisitions around Covent Garden.
CapCo's share price has, nonetheless, slumped by a sixth in recent months. Fears are mounting that the London residential market may be overheating, and investors also remain wary of political interference at Earls Court ahead of the general election.
Broker Liberum kept its forecast for year-end adjusted net asset value unchanged at 286p.
CAPITAL & COUNTIES PROPERTIES (CAPC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 322p | MARKET VALUE: | £2.7bn | |
| TOUCH: | 321-322p | 12-MONTHHIGH: | 395p | LOW: 312p |
| DIVIDEND YIELD: | 0.5% | TRADING PROP: | £37.5m | |
| PREMIUM TO NAV: | 22% | |||
| INVESTMENT PROP: | £2.31bn | NET DEBT: | 11% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 (restated) | 224 | 211 | 27.6 | 0.5 |
| 2014 | 263 | 140 | 17.8 | 0.5 |
| % change | +17 | -34 | -36 | - |
Ex-div: 3 Sep Payment: 26 Sep | ||||
