Land Securities reports on “an active and successful year” – In it’s annual report for the twelve months to 31 March 2018, Land Securities (LAND) reported a year of positive performance in its core activities, offset by the cost of refinancing the company’s bonds.
During the year, the company completed and let major development projects at Nova, SW1 and Westgate Oxford. It pre-let and has subsequently started a 564,000 sq ft development at 21 Moorfields and acquired three retail outlet destinations. LAND also sold one of its largest developments, crystallising exceptional returns, and distributed the majority of proceeds to shareholders.
During the year, the comapny further reduced its cost of debt, increased its duration (sensitivity to interest rate movements) and renewed its revolving credit facilities on improved terms. The cost of refinancing £1.5bn of bonds was the principle reason for both the loss for the year of £251m and the slight fall in adjusted diluted NAV per share to 1,403p. Revenue profit is up 6.3% to £406m and adjusted diluted earnings per share are up 9.9% to 53.1p.
Land Securities combined portfolio is valued at £14.1bn. With the adjusted net debt at £3.7bn, the ratio of the debt to the value of the portfolio (LTV) is 25.8%.
The board has recommended a final dividend of 14.65p – raising the dividend for the year by 14.7%.
Performance highlights
- Ungeared total property return was 4.3%
- Decrease in adjusted diluted net assets per share was 1.0%
- Increase in adjusted diluted earnings per share was 9.9%
- Total business return was 1.8%
Activity highlights
- £23m of investment lettings
- £48m of development lettings including pre-let at 21 Moorfields, EC2
- Acquisitions, development and refurbishment expenditure(1) of £534m
- Disposals of £1.1bn
- £1.5bn (nominal) of bonds repurchased and £1.4bn of new issuances
- Capital distribution to shareholders of £475m accompanied by a 15 for 16 share consolidation
- Supported the 1,000th person from a disadvantaged background into employment through our award winning Community Employment Programme, which the company launched in 2011
- Over 5 million visitors a week to the company’s properties
Retirment of chairman
After 14 years on the Board and nine years as chairman, Dame Alison Carnwath will be retiring from the Board following the AGM in July and will be succeeded by Cressida Hogg, a Non-executive Director who joined the Board in 2014.
Outlook from the Chief Executive, Robert Noel
“We are a long-term business and we have to manage what we do by reference to market cycles and customer trends. As the UK prepares for its exit from the EU, we are navigating uncertain waters in the near term and we expect investment and leasing volumes in the property market to be more subdued. We are prepared for this uncertainty with conservative gearing and a development exposure which we have shifted from speculative to pre-let. Looking ahead, we are working on a growing pipeline of development opportunities in London and are ready to buy when we think the time is right.
Further out, profound change in the way we work, live, shop, play and travel will be a much greater force in determining which companies are sustainable. We will continue to address and identify opportunities from the big drivers of change in our market sectors, from product innovation to sustainability, adapting our portfolio as appropriate. We are well equipped for this with a great and increasingly diverse team, alert to change, with the expertise to provide great experiences for our customers and communities – helping businesses and people to thrive.”