May's two-way split of was sold to investors as a value creating move, but since then shares in Capital Shopping Centres (CSC) have fallen 6 per cent.
The real-estate investment trust (Reit), which owns 13 UK shopping centres including Lakeside, is under pressure from fears over consumer spending and, by association, weak rental growth in the retail sector. Accordingly, like-for-like rents fell 0.4 per cent in the period - a shallower decline than the 3.4 per cent fall in 2009, but still a fall nonetheless.
But the crucial figures in these results relate to temporary lettings. CSC argues its units are prime, and should weather the downturn well. However, it struck many short-term deals at discounts of up to 35 per cent to estimated rental values (ERV) at the nadir of the property crash. Since then, it has been battling to re-let space on better terms.
Deals to re-let 77 shops are in progress which will add nearly £4m to annual passing rents. But 41 per cent of the 131 lettings CapShops achieved in the first half were yet more temporary lettings, struck at 25 per cent below ERV.
These may only represent 2 per cent of the total rent roll, but with a further 9 per cent of leases due for break or expiry in 2011 it doesn't bode well.
Broker Evolution forecasts adjusted 2010 NAV of 387p.
| CAPITAL SHOPPING CENTRES (CSCG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 339p | MARKET VALUE: | £2,113m | |
| TOUCH: | 338-339p | 12-MONTH HIGH: | 448p | LOW: 300p |
| DIVIDEND YIELD: | 5% | TRADING STOCK: | £28.8m | |
| DISCOUNT TO NAV: | 13% | - | - | |
| INVEST PROPERTIES: | £4.9bn | NET DEBT: | 148% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009* | 370 | -251 | -77.8 | 5.0 |
| 2010 | 299 | 220 | 35.4 | 5.0 |
| % change | -19 | - | - | - |
Ex-div: 6 Oct Payment: 3 Nov *Pro-forma figures following demerger of Liberty International in May 2010 | ||||
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