With residential prices in central London under pressure, it was inevitable that Capital & Counties (CAPC) would suffer from its exposure to the Earls Court development, which comprises a third of the property portfolio. In the half year to June, the valuation at Earls Court was trimmed by 14 per cent, which meant that last year's first-half group valuation uplift of £272m gave way to a £174m devaluation.
Even more worrying is the drop off in sales. The Masterplan has consent to build 7,500 homes, but after selling 40 a week at the first launch in spring 2014, phase two launched in September last year initially selling just three or four a week, and this has now slowed to around one flat every two weeks.
On a happier note, the Covent Garden portfolio delivered a 3 per cent valuation uplift, with the estimated rental value (ERV) up 4 per cent at £90m. A total of 50 new leases and renewals representing £9.2m of rental income were secured at 7 per cent above last December's ERV, which helped to push net rental income for the whole group up from £38.4m to £40.9m.
Analysts at Peel Hunt are forecasting adjusted net asset value at the December 2016 year-end of 325p a share (from 361p in 2015).
| CAPITAL & COUNTIES PROPERTIES (CAPC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 282.3p | MARKET VALUE: | £2.39bn | |
| TOUCH: | 282.1-282.4p | 12-MONTH HIGH: | 475p | LOW: 257p |
| DIVIDEND YIELD: | 0.5% | TRADING PROPERTIES: | £13.2m | |
| DISCOUNT TO NAV: | 15% | NET DEBT: | 21% | |
| INVESTMENT PROPERTIES: | £3.76bn* | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 349 | 277 | 31.4 | 0.5 |
| 2016 | 334 | -190 | -12.9 | 0.5 |
| % change | -4 | - | - | - |
Ex-div: 8 Sep Payment: 30 Sep *Includes joint ventures | ||||
