A strong first-half performance from Capital & Regional (CAL) was overshadowed by news that, since the period ended, the retail and leisure property landlord had acquired a 62.6 per cent stake in the Mall Fund. That's a holding vehicle for six regional shopping centres and the deal lifts Capital's total holding to 91.8 per cent. This is a transformational move because it gives the group control over how the fund is managed. The deal was part-financed by a successful £165m share placing last month.
The net consideration of nearly £212m was based on first-quarter valuations, but by the end of the second quarter that represented a 5.4 per cent discount to book value. Discussions to buy out the minority shareholders will, if successful, allow the group to restructure the fund to reduce costs.
Capital & Regional remains focused on recycling capital into the core shopping centre business by disposing of non-core assets. Disposals worth over €100m (£80m) in Germany are currently being discussed, and the joint venture Waterside Shopping centre in Lincoln is expected to be sold later this year. As a medium-term objective, management also aims to reduce the current 55 per cent loan-to-value ratio to 40-50 per cent.
Broker Numis Securities expects full-year adjusted book value of 57p a share (56p in 2013), rising to 62p in 2015.
| CAPITAL & REGIONAL (CAL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47p | MARKET VALUE: | £329m | |
| TOUCH: | 46-47p | 12-MONTH HIGH: | 53p | LOW: 35p |
| DIVIDEND YIELD: | 1.6% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 18% | |||
| INVESTMENT PROPERTIES: | £149m* | NET DEBT: | 108%** | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 52 | 3.1 | 1.0 | 0.25 |
| 2014 | 57 | 10.5 | 3.0 | 0.35 |
| % change | +10 | +239 | +200 | +40 |
Ex-div: 3 Sep Payment: 26 Sep *Relates to investments in associates and joint ventures **Includes joint venture debt | ||||
