Shaftesbury's first half profits fall on higher finance costs

Property investment company Shaftesbury reported a decline in pre-tax profit in the first half as the company incurred higher finance costs.

The company’s profit before tax came to £80.1m in the six months ended 31 March 2016, down from £180.2m in the same period a year earlier.

The group said it had increased net debt as a result of acquisitions and further investments in its portfolio which pushed net finance costs up £1.4m to £16.6m.

Yet revenue rose to £53.4m from £48.4m as net property income grew to £42.1m from £38.7m.

EPRA earnings also increased to £20.2m from £17.9m while net asset value return jumped to 17% from 3.6%.

The group raised its dividend to 7.15p from 6.82p.

The company’s results were driven by its portfolio of retail, restaurants, cafes and leisure properties in London’s West End, which achieved strong demand from domestic and international visitors.

During the period the company added to its portfolio with acquisitions worth £43.2m in Covent Garden, Soho and Charlotte Street. Shaftesbury also invested in redevelopment and refurbishment to existing properties.

“A combination of sustained demand for accommodation in our areas and our asset management initiatives continues to deliver growing current and future potential rental income, underpinning growth in earnings, the value of our portfolio and shareholders' investment in our business,” said chief executive Brian Bickel.

Shares fell 0.48% to 935p at 1000 BST.