Landsec swings to profit in strong year for operations

Land Securities delivered a “strong” set of results on Tuesday, with its total accounting return swinging to 10.5% for the year from -15.9%, driven by its operational performance and strategic actions.

The FTSE 100 company said EPRA earnings per share were ahead 42% for the 12 months ended 31 March to 48p, reflecting growth in like-for-like income and “normalising” trading conditions.

EPRA net tangible assets per share grew 8%, meanwhile, to 1,063p, with the firm reporting a portfolio valuation surplus of 3.6%.

Landsec swung to a profit before tax of £875m, from a loss of £1.39bn in the 2021 financial year, which the board said was driven by growth in earnings and values.

It hiked the total dividend by 37% to 37p per share, which the directors said was supported by a “strong recovery” in earnings.

The group’s loan-to-value ratio was up slightly to 34.4% from 32.2% year-on-year, while the company’s weighted average maturity of debt stood at 9.1 years at year-end, down from 11.5 years a year earlier, which Landsec said provided it with a “strong” financial base.

“Landsec has delivered strong operational and financial results despite the turbulence within the UK economy,” said chief executive officer Mark Allan.

“The actions we have taken, driven by our strategic focus on three distinct areas have resulted in record leasing in our London office portfolio, a return to growth in our major retail destinations and clear, substantive progress in growing our mixed-use urban neighbourhood portfolio.

“We continue to recycle capital out of mature assets, whilst our pipeline now offers the opportunity to invest £3bn in sustainable London offices and mixed-use development over the next five years at attractive returns.”

Allan said Landsec was in a “strong position”, financially and operationally, as it focussed on its strategy to drive material growth in income and, on average, a mid-to-high single digit annual return on equity over time.

“This position affords us many opportunities, not least the ability to lead change, which is why today we have raised the bar for ourselves and our industry by setting out ambitious targets to reduce embodied carbon through development as well as clear plans to enhance social mobility both in our industry and through the places where we invest.

“With the expertise we have within the business and the momentum built, I am confident that we are on the right path and will be able to navigate the wider macro uncertainties facing the economy today.”

At 0920 BST, shares in Land Securities Group were up 1.05% at 749.8p.

Reporting by Josh White at Sharecast.com.