A much-expected slowdown in asset price inflation accounted for the fall in headline pre-tax profits at British Land (BLND). Compared with £1.5bn in the previous year, the total property valuation uplift narrowed to £861m. However, net rental income grew by 6 per cent to £620m, and the group is proposing to increase the quarterly dividend to 7.3p a share, promising an annual payout of 29.2p for a yield of 4.1 per cent.
The portfolio is broadly split between offices and retail, with offices again providing the majority of the valuation growth. Nearly 300,000 sq ft was let or renewed at an average 5.6 per cent ahead of estimated rental value (ERV). That translated into £3.8m of rent, secured on terms 17 per cent ahead of previous rents.
On the retail side, more than 900,000 sq ft was let or renewed at 8 per cent ahead of ERV, and while the superstore performance was more subdued, the portfolio has been reduced in the past two years from £1.3bn to £800m, with deals under offer expected to reduce this further to £700m.
Analysts at Peel Hunt are forecasting adjusted net asset value at March 2017 of 957p.
| THE BRITISH LAND COMPANY (BLND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 709p | MARKET VALUE: | £7.30bn | |
| TOUCH: | 709-709.5p | 12-MONTH HIGH: | 892p | LOW: 643p |
| DIVIDEND YIELD: | 4.0% | TRADING PROPERTIES: | £325m | |
| DISCOUNT TO NAV: | 23% | |||
| INVESTMENT PROP: | £13bn** | NET DEBT: | 37% | |
| Year to 31 Mar | Net asset value (p*) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 595 | 0.48 | 54 | 26.1 |
| 2013 | 596 | 0.26 | 32 | 26.4 |
| 2014 | 688 | 1.11 | 111 | 27 |
| 2015 | 829 | 1.79 | 168 | 27.68 |
| 2016 | 919 | 1.33 | 131 | 28.36 |
| % change | +11 | -26 | -22 | +2 |
Ex-div:tba Payment:tba *Adjusted NAV **Includes £3.35bn within joint ventures and funds | ||||
