The most eye-catching figure in Capital & Regional's interim results was the 11 per cent growth in adjusted net asset value since the year end, to 63p per share.
That was partly the result of rental cash flows, which the company won't distribute in dividends until it has paid off enough debt in its Mall fund to meet a 60 per cent loan-to-value covenant in 2014. But a 2.9 per cent uplift in property valuations across the UK portfolio also helped, driven by a welcome increase in the estimated rental income of the estate.
Underlying pre-tax profits fell 1 per cent to £8.8m over the half, but that was a decent result given property disposals. New lettings and lease renewals were at rents 4.8 per cent higher than surveyors' previous estimates, on average, with occupancy rates broadly stable. Chief executive Hugh Scott-Barrett says tenants are attracted by the affordability of the Mall fund's shopping centres compared with their prime pan-regional rivals.
Including off-balance sheet borrowings, net debt only fell 3 per cent over the period, to £452m, but that was partly due to unfavourable currency movements on its German debt, worth £9.8m.
Brokerage Peel Hunt has upgraded its year-end adjusted NAV forecast to 66p to reflect the strong performance.
CAPITAL & REGIONAL (CAL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £112m | |
| TOUCH: | 31-33p | 12M HIGH / LOW | 41p | 28p |
| DIVIDEND YIELD: | NIL | TRADING STOCK: | £70.7m | |
| DISCOUNT TO NAV: | 43% | |||
| INVEST PROPERTIES: | £10.2m* | NET DEBT: | 24%** | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 42 | 17.5 | 5.00 | nil |
| 2011 | 56 | 21.2 | 6.00 | nil |
| % change | +33 | +21 | +20 | - |
*Excludes £153m in joint ventures and associates **Excludes £405m of off-balance sheet net debt | ||||
