Chairman's Statement

I am pleased to report an increase of 4.8 per cent in Adjusted Profit to £30.5 million from £29.1 million. This increase in underlying profitability has been achieved notwithstanding the headwinds from both structural change in the retail sector and weakening consumer sentiment. It is a strong endorsement of the strategy that the Company has been pursuing and is underpinned by robust operating and financial key performance indicators. Footfall continues to grow, outperforming the relevant national index, while net rental income has proven to be very resilient, in spite of a steady flow of retailer failures, reflecting the affordability and appeal of our assets to retailers and our team’s asset management expertise.

While our operating metrics were positive, the impact of lower property valuations largely driven by negative sentiment towards regional retail assets, partially offset by positive valuation gains achieved across our London portfolio, led to a loss for the year of £25.6 million (December 2017: profit of £22.4 million).


Market conditions in the retail sector have provided a uniquely challenging backdrop to the implementation of group strategy. The asset management team has energetically focused on the repositioning of the Company’s convenience-based community shopping centre portfolio, leading to tangible improvements in performance at those centres where the process is most advanced. Considerable progress has been made on the remerchandising of schemes with a focus on those occupiers which directly respond to the needs of the local community, embrace omni-channel retailing, or those that are most resilient to the continuing growth in online shopping. The Group has not been immune to CVAs and retailer restructurings with 20 of these impacting NRI by approximately £1.5 million (2.9%) over the whole year. However, our rebased rents, which average £15 per sq ft, in combination with capital values below replacement cost, do give us flexibility in diversifying our tenant base.

Our ability to invest in accretive capital expenditure initiatives has been critical to achieving these outcomes. During the course of the year we have invested £18.5 million in asset management initiatives, including the refurbishment of the previously vacant Arndale House office space in Luton; the delivery of the new Family Zone in Ilford; providing a new façade at the Fareham House high street block in Hemel Hempstead and upgrading guest facilities at Hemel Hempstead, Ilford and Wood Green. There is a pipeline of very exciting initiatives across the portfolio but with particular focus on Hemel Hempstead; Ilford and Walthamstow. The Board takes a very active role in reviewing these projects. Its aim is to ensure that the Company engages openly and transparently with all stakeholders in the development and roll-out of the plans. It also aims to ensure that the speed of investment is carefully balanced with the need for prudent balance sheet management.

C&R is reporting another strong set of results with Adjusted Profit, which reflects the underlying performance of the business, increasing by 4.8% to £30.5 million.


Hugh Scott-Barrett

Responsible Business Board

Our commitment to running our business responsibly underpins the way we operate and is an integral part of who we are and what we do. In 2018, we retained our ROSPA Gold Award for the 12th consecutive year and continue to focus efforts to reduce energy and water consumption and increase waste diversion to recycling across our centres.

Community engagement remains at the heart of our business. In 2018, through C&R Cares, £340,000 was raised for local charities chosen by our staff and our centres supported events throughout the year that encouraged inclusivity and openness, including Purple Tuesday, a national campaign to provide an accessible shopping day, established to recognise the importance and needs of disabled consumers and promote inclusive shopping.

C&R is one of the headline sponsors for London’s Borough of Culture in 2019. Waltham Forest is the first ever London Borough of Culture, giving the local community the chance to experience world-class cultural experiences on their doorstep.


The Board is recommending a final dividend of 0.60 pence per share, taking the full-year dividend to 2.42 pence per share. This represents a decrease of 33.5 per cent over the 2017 full-year dividend of 3.64 per share.

The Company has been actively exploring financing options to underpin its capex plans. The Board is conscious of the guidance it had previously given to grow dividend by between 5 and 8 per cent per annum but has concluded that adjusting the dividend and agreeing a new capex facility for the Hemel Hempstead loan, to support the cinema development, along with increased headroom on the rebased Revolving Credit Facility is the best option for the Company at this point in time given current uncertainties in occupational and investment markets. The cash preserved will assist in mitigating leverage and maintain investment in the Company’s capital expenditure initiatives, which in the longer term are expected to support earnings growth.

The proposed dividend, together with the interim dividend paid in October 2018, substantially fulfils the Group’s UK REIT obligations for the 2018 financial year. Dividends for the short to medium term are expected to be set at around the same level (2.42 pence per share per annum), subject to material retailer administrations and the Board’s intention to meet its minimum REIT distribution requirements.


Ensuring our people are supported, motivated and engaged is key to our success. In 2018, we achieved a 93 per cent participation rate in our C&R Pulse Staff Engagement survey and the feedback received scored strongly against external benchmarks and previous survey responses. During visits to our centres and support office, C&R’s culture of innovation and agility, where we act as one team and are held accountable, is clearly evident in the way the teams work and support each other. I would like to thank all our staff for their hard work and dedication during what has been an exciting but demanding year for the business.


Guillaume Poitrinal stepped down as a Non-Executive Director in October 2018. His knowledge of the retail sector has been hugely valuable in shaping the Board’s discussions over the last two years and I would like to thank him for his contribution.

I would also like to thank Charles Staveley, who stepped down as an Executive Director in August 2018 after ten years as Group Finance Director. Charles played a key role in the restructuring and reshaping of C&R over this period.

Stuart Wetherly was appointed as Group Finance Director on 11 March 2019. Having spent much of his career at Capital & Regional, Stuart is more than qualified for this role and is deeply familiar with our operations and strategy. He is uniquely placed to help the Board and management carry the Company forward and we are pleased to be able to formalise his role.

I agreed to take on the role of Non-Executive Chairman from June 2017 to ensure continuity at a time of significant change for the Board and the transition to Lawrence Hutchings as Chief Executive. Now that this transition is complete, I have decided it is time to seek my successor. A recruitment process, led by our Senior Independent Director Tony Hales, will begin following the Annual General Meeting in May 2019 and I will step down in due course, once my successor is appointed.

Hugh Scott-Barrett

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