Shareholders hoping for a final decision from Capital & Counties (CAPC) on plans for its underperforming Earls Court portfolio were left disappointed when the landlord reported its results for the year to December 2018. However, it did reveal that preparations for a possible demerger of its Earls Court and Covent Garden portfolios were well advanced and could be implemented quickly.
The Covent Garden segment, which makes up 80 per cent of the group’s portfolio by value, reported a 1.6 per cent valuation uplift and 3 per cent rental growth. That was encouraging but also reflected a marked downturn in growth associated with a broader slowing in central London retail.
The Earls Court development remained a significant drag, suffering a 15.6 per cent devaluation. Even so, at the Lille Square scheme phase 1 has been handed over to residents while phase 2 is 80 per cent pre-sold, and finances were boosted by the £250m sale of the Empress State Building.
However, ECPL – which is the joint venture with Transport for London to deliver 8,000 homes – has run into opposition from local authorities, one of which is considering the use of compulsory purchase orders.
Analysts at Peel Hunt are forecasting adjusted net asset value of 321.5p at the December 2019 year-end, down from 326p a year earlier.
| CAPITAL & COUNTIES PROPERTIES (CAPC) | ||||
| ORD PRICE: | 247.4p | MARKET VALUE: | £ 2.10bn | |
| TOUCH: | 247.1-248p | 12-MONTH HIGH: | 310p | LOW: 225p |
| DIVIDEND YIELD: | 0.6% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 23% | |||
| INVESTMENT PROP: | £3.34bn | NET DEBT: | 19% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 300 | 450 | 55.6 | 1.5 |
| 2015 | 349 | 460 | 51.3 | 1.5 |
| 2016 | 332 | -251 | -15.0 | 1.5 |
| 2017 | 330 | -63 | -0.1 | 1.5 |
| 2018 | 322 | -119 | -6.7 | 1.5 |
| % change | -2 | - | - | - |
| Ex-div: | 11 Apr | |||
| Payment: | 16 May |
