Against a backdrop of uncertainty, Land Securities (LAND) delivered a resilient performance in the year to March, lifting adjusted net asset value (NAV) by nearly 11 per cent to 1,434p and rewarding shareholders with a 10 per cent hike in the dividend.
"As risk has been rising outside the business, we have been reducing risk inside the business," chief executive Robert Noel says. All the key performance metrics certainly attest to this. On the financial front, acquisitions, development and refurbishment costs of £496m were more than covered by disposals of £1.49bn, the latter at a 9.1 per cent surplus to book value. This also helped to reduce net debt to £3.2bn and, together with a revaluation surplus, helped to drive down the loan-to-value ratio from 28.5 per cent to 22 per cent.
Headline profits showed an expected decline, reflecting a narrowing in the surplus revaluation on the portfolio from £2.04bn to £907m. In fact, with additional revenue from completed developments, net rental income edged ahead to £604m. This was despite a £51m hit to this income as a result of disposals.
Analysts at Peel Hunt are forecasting adjusted NAV of 1,496p at the March 2017 year-end.
| LAND SECURITIES (LAND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,161p | MARKET VALUE: | £9.18bn | |
| TOUCH: | 1,161-1.162p | 12-MONTH HIGH: | 1,363p | LOW: 963p |
| DIVIDEND YIELD: | 3.0% | TRADING PROPERTIES: | £123m | |
| DISCOUNT TO NAV: | 22% | |||
| INVESTMENT PROP: | £14bn* | NET DEBT: | 27% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 921 | 0.52 | 67 | 29 |
| 2013 | 959 | 0.53 | 68 | 29.8 |
| 2014 | 1,069 | 1.11 | 142 | 30.7 |
| 2015 | 1,343 | 2.42 | 306 | 31.85 |
| 2016 | 1,482 | 1.34 | 169 | 35 |
| % change | +10 | -45 | -45 | +10 |
Ex-div: 23 Jun Payment: 28 Jul *Includes investments in joint ventures | ||||
