Capco makes 'active start' to year

Capital & Counties Properties issued its interim results for the six months ended 30 June on Wednesday, reporting equity attributable to owners of the parent of £2.8bn, in line with December’s figure.

The FTSE 250 company said its EPRA net asset value was also maintained, at 334p per share.

Total property value stood at £3.3bn - a decrease of 0.4% on a like-for-like basis, wit the board proposing an interim dividend of 0.5p per share, the same as was paid a year ago.

On the operational front, Capco reported continued income growth at Covent Garden, with the total property value there standing at £2.6bn - a 1.6% like-for-like increase.

Net rental income at the site was up 11.6% on a like-for-like basis, or 21.2% in absolute terms against June last year.

It saw “positive operational momentum”, reporting 26 new leases and renewals 8.9% above December’s estimated recovery value, with ERV increasing 1.9% on a like-for-like basis to £107m.

The development of Floral Court was now complete, with 75% of lettable space contracted, and luxury brand Tiffany recently launching a new concept store on James Street.

Capco also said it was realising value at its Earls Court site, with interests there valued at £707m - a decrease of 7.0% on a like-for-like basis.

It said Earls Court Partnership Limited (ECPL) land was available for development, and reported “ongoing interest” from potential partners and end users.

The company also completed the sale of the Empress State Building for £250m during the period - a £30m premium to the December valuation.

At Lillie Square, the delivery of the first phase of development was said to be “substantially complete”, with £123m cash proceeds received by Capco.

Over 80% of the second phase was now reserved or exchanged, with main construction begun.

Taking a closer look at the books, Capco said it remained in a “strong” financial position with significant financial flexibility, reporting a group loan-to-value ratio of 17%, down from 21% at the end of December.

Group undrawn facilities and cash stood at £886m at period end, rising from £691m, while capital commitments were £82m, up from £61m.

The company said its weighted average maturity was 6.5 years, compared to 6.9 years in December, while its weighted average cost of debt rose marginally to 2.9% from 2.8%.

Capco’s board also said it was undertaking preparation for a possible demerger, reporting that “constructive early steps” had been taken, with further announcements to be made in due course.

“Capco has had an active start to the year across its two prime central London estates,” said chief executive officer Ian Hawksworth.

“At Covent Garden we delivered another period of strong performance and an increase in value, with excellent demand across all uses driving 21% overall growth in net rental income.

“At Earls Court, the consented land is now ready for development and we have realised significant proceeds over the last twelve months from the sale of the Empress State Building and continued sales at Lillie Square.”

Hawksworth said Capco had achieved “significant growth” since listing, with long-term value creation across the business.

“Covent Garden has been transformed into a leading global retail and dining destination, attracting a vibrant mix of British, independent and international brands, while at Earls Court, we have created one of central London's most important mixed-use development opportunities.

“Against this backdrop, the board is considering the structure of the group and constructive early steps have been taken in preparing for a possible demerger.”

While the broader macroeconomic outlook remains uncertain, Hawksworth added that Capco was backed by a strong balance sheet, and remained focused on creating long-term value for shareholders.

“Our two prime central London estates are well-placed for long-term success.”