Land Securities has reported an £835m loss for the six months to the end of September 2020 as the value of its property portfolio tumbles £945m (7.7%) to £11.8bn.
The company’s EPRA net tangible assets (the new metric that replaces EPRA NAV) was down 9.5% to 1,079p.
Adjusted diluted earnings was down 49% to 15.5p per share as the impact of COVID-19 on its portfolio hit rental income. The group paid a dividend of 12p (2019: 23.2p).
Net rental income crashed by £118m in the six months compared with the same period in 2019, from £309m to £191m. Like-for-like net rental income was down £116m, with increased bad and doubtful debts accounting for £85m of the decline.
Of the £386m of rent billed in the six months, 71% (or £275m) has been collected with £4m lost through tenant CVAs and administrations, £19m waived through concessions and £5m deferred for future payment. That leaves £83m still outstanding.
The company said it had assessed the outstanding debtors for recoverability and provided £87m for bad debts in the period.
Portfolio valuation analysis
The 7.7% decline in the value of Landsec’s portfolio is almost entirely due to a fall in the value of its retail and leisure assets.
Its regional shopping centres and shops saw the largest reduction in values, down 20.4% overall as rental values reduced by 14.4%. Leisure assets declined in value by 15.3%, while hotels were down 13.1%.
The group’s office assets saw a modest fall of 1.9%.
Debt
The company has £3.9bn of debt and group loan to value (LTV) increased to 33.2% from 30.7% six months prior, with weighted cost of debt increasing to 2.1% from 1.8%.
The weighted average maturity of the debt is now 10.9 years, up from 9.6 years in the six month period.
The group has cash and available facilities of £1.2bn.
Chief executive comments
New chief executive Mark Allan has set out a new strategy for growth, which can be read here.
He said: “While today’s results clearly show the impact of the pandemic on our business, Landsec remains in a fundamentally strong position. Together, the high quality of our portfolio and low leverage of our balance sheet provide a solid foundation for executing our growth strategy and creating value for all stakeholders. This strength also means we have been able to take a proactive and responsible approach to the challenges of Covid-19, supporting our communities and customers.
“As we begin to look beyond Covid-19, I am confident the business is well placed to capitalise on opportunities as they emerge. The investment market for high-quality London office assets, such as those owned by Landsec, has remained robust throughout the pandemic and there is little sign of that interest waning. Access to this liquidity, coupled with the acquisition and development opportunities that are likely to arise as a result of increased obsolescence of older office stock, as well as the long-term need for urban mixed use regeneration, mean there will be ample opportunity for Landsec to create significant value. We look ahead with a clear strategic direction and are optimistic about the future.”
LAND : Land Securities reports £835m loss in half-year results