Land Securities posts solid first half despite Brexit headwinds

Land Securities posted a 5.2% year-on-year improvement in revenue profit in its first half on Tuesday, to £203m, while its valuation deficit was broadly stable, falling 0.1% to £19m.

The FTSE 100 company reported a loss before tax of £33m for the six month period to 30 September, narrowing from the £95m loss it reported at the same time last year.

Its basic loss per share reduced to 4.3p from 12.1p, with adjusted diluted earnings per share improving 5.8% to 25.7p.

Landsec’s board confirmed a dividend per share of 19.7p, ahead 10.1% on the same time last year.

Looking closer at the books, basic net assets per share were up 0.7% year-on-year to 1,468p, while adjusted diluted net assets per share rose 1.1% to 1,432p.

The group’s loan-to-value ratio was 21.8%, down from 22.2% at the same time last year, while its pro forma group loan-to-value ratio was 25.1%.

"Landsec reports a strong operational performance in the first half, with our highest levels of leasing activity since the global financial crisis, opportunistic buying and profitable disposals,” said chief executive Robert Noel.

“We've continued the active management of our balance sheet, returning £475m of capital to shareholders and also lowering our cost of debt and lengthening its duration.”

Noel noted that, while the valuation of the combined portfolio was little changed, adjusted diluted net asset value per share was up 1.1% as the cost of debt management had been more than offset by the effect of the 15-for-16 share consolidation accompanying the return of capital.

“In London, the sale of 20 Fenchurch Street, EC3 at an exceptional price demonstrated our disciplined approach to managing capital.

“The sale crystallised a 170% profit on cost and significant value for shareholders.

“At 21 Moorfields, EC2, the quality of our product, our reputation for delivery and the strength of our partnership approach saw us secure a significant pre-let in the City of London, with Deutsche Bank committing to a minimum of 469,000 sq ft.”

In retail, Noel noted that the company launched Westgate Oxford - the largest retail and leisure destination to open in the UK this year, and “another example” of the firm’s focus on delivering the “best experience” for customers.

“During the period, we completed the acquisition of three outlet destinations, demonstrating our commitment to this growing and resilient sector, and establishing our position as the largest owner-manager of outlets in the UK.

“The headwinds of Brexit are beginning to show in the economy.

“However, our balance sheet is healthy and we have the talent, firepower and experience to thrive.”

Land Securities adds O'Shea, Parsons to board

In a separate announcement on Tuesday, Land Securities said that Colette O'Shea, the current managing director of its London portfolio, and Scott Parsons, the managing director of its retail portfolio, would be appointed to the board with effect from 1 January.

The FTSE 100 firm said O'Shea joined Landsec in 2003, and was appointed head of development in 2008.

She assumed her current position in 2014, and prior to joining Landsec, she was head of estates at the Mercers' Company.

The board said O’Shea has been responsible for the “successful delivery” of Landsec's recent three million square foot speculative development programme in London, as well as its “award winning” Community Employment Programme which has secured employment for more than 1,000 disadvantaged people since its launch in 2011.

She is a member of the Mayor of London's Local Enterprise Partnership and formerly a non-executive director of the Genesis Housing Association.

Scott Parsons, on the other hand, re-joined Landsec in 2010 and was appointed to his current role in 2013.

Prior to rejoining the firm, he held leadership positions at GE Capital, Brookfield Asset Management and Lloyds Banking Group.

Parsons has been responsible for overseeing the transformation of Landsec's retail portfolio over the last four years under the themes of “dominance, experience and convenience”.

He is a trustee of LandAid.

“The board knows both Colette and Scott well,” said Land Securities chairman, Dame Alison Carnwarth.

“They are proven leaders, with deep market knowledge, who live our values.

“They will be good additions to the board and demonstrate good internal development and bench strength in this business.”