As a retail landlord, Capital & Regional (CAL) operates in one of the tougher real estate sub-sectors, so increasing rental income and holding net asset value broadly flat were both solid achievements in 2017. Changes introduced by new management, headed by chief executive Lawrence Hutchings, are already starting to show through, with cost efficiencies of £1.2m expected to reach an annualised £1.8m by the end of 2018.
The portfolio is focused on local community shopping centres, where consumers attend to their non-discretionary shopping requirements. and operates in locations such as Blackburn, Ilford and Luton. One of the attractions for tenants is the relatively low rent, and occupancy in 2017 rose from 95.4 per cent a year earlier to 97.3 per cent.
Adding a personal touch to enhance the shopping environment is working too, with footfall in the second half of 2017 rising by 0.5 per cent against a 2.9 per cent decline in the national average. A total of 79 new lettings and renewals were secured at a 10.3 per cent premium to previous rents and an 8.4 per cent premium to estimated rental value. Overall, net rental income grew 2.4 per cent to £51.6m.
Analysts at Peel Hunt are forecasting adjusted net asset value at the December 2018 year-end of 68p, from 67p in 2017.
| CAPITAL & REGIONAL (CAL) | ||||
| ORD PRICE: | 54.5p | MARKET VALUE: | £391m | |
| TOUCH: | 53.8-54.5p | 12-MONTH HIGH: | 63p | LOW: 50p |
| DIVIDEND YIELD: | 6.7% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 19% | |||
| INVESTMENT PROP: | £931m | NET DEBT: | 84% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 54.0 | 7.3 | 2.0 | 0.65 |
| 2014 | 60.0 | 67.2 | 13.6 | 0.95 |
| 2015 | 72.0 | -19.9 | 13.9 | 3.12 |
| 2016 | 68.0 | -4.5 | -0.6 | 3.39 |
| 2017 | 67.0 | 22.4 | 3.2 | 3.64 |
| % change | -1 | - | - | +7 |
| Ex-div: | 19 Apr | |||
| Payment: | 16 May |
