LondonMetric rental income grows, but profit dips as finance costs balloon

LondonMetric has seen half year gross rental income rise, however an increase in finance costs and a drop in profits from joint ventures have hit the group’s overall profit.

The FTSE 250 property company released its interim results to 30 September on Thursday.

Gross rental income grew 10% to £31.7m compared to £28.9m in 2014.

However profits from joint ventures fell from £8.5m to £3.2m, and finance costs ballooned from £9.2m to £13.6m.

As a result, profit before tax dropped from £70.4m to £64.3m.

LondonMetric chief executive Andrew Jones said events like Black Friday are reminders of changes in the retail sector.

“The winning retailers this festive season - and forever more - will be those who can get products into consumers' hands as quickly, reliably and efficiently as possible.

"This is strengthening the demand dynamics for well-located distribution space as the growth in retailers' omni channel strategies continues to soak up constrained market supply.”

Jones said the company’s focus continues to be on owning quality real estate with “deep occupier appeal that can deliver future income and capital growth from increasing demand, asset management and development opportunities".

The company also announced its purchase of a new 356,000 sq ft distribution warehouse development at Omega South, Warrington.

LondonMetric will forward fund the development by Omega Warrington, a joint venture between Miller Developments and KUC Properties.

It will spend around £30m in total and is expected to generate a yield on cost to the company of around 7%.

Shares in the company fell 3.15p (1.88%) to 164.35p per share at 0906 GMT.