There are plenty of headwinds for retail landlords, but Capital & Regional (CAL) is showing that there are still parts of the retail sector that pay dividends. In this case the dividend is substantial, yielding nearly 8 per cent.
The group owns seven shopping centres with a focus on non-discretionary and value orientated business. While there is inevitably some exposure to tenants going bust, trimming net rental income by £400,000 or an estimated £1.2m for the full year, occupancy rose to 96.9 per cent. What’s more, footfall grew by 1.7 per cent against a 3.4 per cent fall in the national index.
And while headline profits were lower, reflecting a downward valuation on the portfolio, net rental income in the six months to June rose 1.3 per cent on a like-for-like basis. Adjusted profits rose by 6.9 per cent to £15.5m, putting the business on track to achieve its fifth consecutive year of growth. Rents remained relatively low, which helped to retain existing tenants, although the 44 new lettings and renewals were secured at an average premium of 3.4 per cent to previous passing rent and a 3.3 per cent premium to estimated rental value.
Analysts at Stifel are forecasting adjusted net asset value (NAV) at the December 2018 year-end of 66p a share, from 67p a year earlier.
| CAPITAL & REGIONAL (CAL) | ||||
| ORD PRICE: | 48.4p | MARKET VALUE: | £350m | |
| TOUCH: | 48.2-48.45p | 12-MONTH HIGH: | 60p | LOW: 47p |
| DIVIDEND YIELD: | 7.7% | DEVELOPMENT PROP: | nil | |
| DISCOUNT TO NAV: | 27% | NET DEBT: | 85% | |
| INVESTMENT PROP: | £927m | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 68 | 12.1 | 1.72 | 1.73 |
| 2018 | 66 | 6.7 | 0.93 | 1.82 |
| % change | -3 | -45 | -46 | +5 |
| Ex-div: | 4 Oct | |||
| Payment: | 25 Oct |
