Confirmation that Capital & Counties (CAPC) is to split its business in two overshadowed the commercial landlord's first-half results. After receiving a number of offers for its struggling Earls Court development “at a range of discounts” to the balance sheet value, management plans to launch the Covent Garden assets as a Central London-focused real estate investment trust (REIT) before the end of the year.
The Earls Court site - which was planned in 2013 but is yet to be built - continued to drag on the portfolio valuation, which declined 2 per cent on a like-for-like basis. The development's valuation dropped 11.5 per cent on the same basis, although the second phase of the Lillie Square construction is on track for first hand-over in 2020.
Covent Garden - which posted a 0.5 per cent like-for-like rise in valuation - was boosted by a marginal increase in rental values. Forty leasing transactions were completed in the period, representing £13m in annual rent at 2 per cent above December 2018 estimated rental values. Like-for-like rental income rose 7 per cent to £31.1m.
Analysts at Panmure Gordon expect adjusted NAV of 316p at the December 2019 year-end, down from 326p at the same time last year.
CAPITAL & COUNTIES (CAPC) | ||||
ORD PRICE: | 216.6p | MARKET VALUE: | £1.84bn | |
TOUCH: | 216.4-216.8p | 12-MONTH HIGH: | 294p | LOW: 208p |
DIVIDEND YIELD: | 0.7% | TRADING PROP: | £296m* | |
DISCOUNT TO NAV: | 30% | |||
INVESTMENT PROP: | £3.21bn* | NET DEBT: | 21% |
Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2018 | 322 | -4.9 | 2.7 | 0.5 |
2019 | 311 | -129 | -10.2 | 0.5 |
% change | -3 | - | - | |
Ex-div: | 29 Aug | |||
Payment: | 20 Sep | |||
*includes investments in joint ventures |