Land Securities earnings rise as it refocuses portfolio

Commercial landlord Land Securities reported a 56.5% rise in EPRA earnings in its half-year results on Tuesday, to £180m, as gross rental income fell 3.8% to £282m.

The FTSE 100 company said profits before tax for the six months ended 30 September totalled £275m, swinging from a loss of £835m in the first half of the 2-21 financial year, while EPRA earnings per share were ahead 56.8% at 24.3p.

Its board declared a dividend of 15.5p per share for the period, rising from the 12.0p distribution a year ago.

Landsec said its combined portfolio was valued at £11.0bn, with a valuation surplus of £81m, or 0.8%.

EPRA net tangible assets per share grew by 2.7% to 1,012p, while the company’s total business return was 3.7%.

The company said it was in a “strong” financial position, reporting low leverage with a group loan-to-value ratio of 31.8%, compared to 32.2% at the end of March.

Adjusted net debt totalled £3.5bn, in line with the £3.5bn it also reported on 31 March, while the company’s weighted average cost of debt was 2.3% for the period, up slightly from the 2.2% it recorded in the first half of the prior financial year.

The firm’s weighted average maturity of debt was 10.9 years, down from 11.5 years at the end of March, while cash and available facilities totalled £1.6bn at the end of the period.

“We have used the last six months to drive our business forward, disposing of £250m of assets and progressing £616m of acquisitions that will accelerate our strategy and provide greater opportunities for growth,” said chief executive officer Mark Allan.

“In focusing our strategy on shaping three distinct places - central London offices; major retail destinations; and mixed-use urban neighbourhoods - we are bringing renewed vigour to the business and creating value for all our stakeholders.

“One of the ways that we create value is by taking leadership positions on the issues that matter.”

Allan said that Landset was setting out a “fully-costed investment plan” on Tuesday to transition its business towards net zero, ensuring that it delivered on its “science-based target” to reduce its carbon emissions by 70% by 2030.

“Our actions over the last six months and throughout the pandemic have enabled us to significantly increase operational activity and we remain in a strong financial position.

“We look forward to demonstrating further progress over the coming months.”

At 0825 GMT, shares in Land Securities Group were up 1.61% at 721.6p.