Capital & Regional plc, the specialist property company today announces its unaudited interim results for the six months ended 30 June 2012.

Key events

Financial

• Robust recurring pre-tax profit of £9.2 million, up 5% from the first half of 2011.
• Fall in net assets and EPRA net assets from the 2011 year end of £0.03 per share to £0.53, and £0.60, respectively, primarily as a result of value adjustments in The Mall fund and the German portfolio 4 joint venture. 
• See-through net debt falling to 63% compared to 65% at 2011 year end and Group net debt increasing to 35% compared to 24% at 2011 year end mainly due to the acquisition of Redditch and the purchase of additional units in The Mall, increasing the Group's interest to 20.15%.
• Acquisition of 20% interest in the Kingfisher Shopping Centre in Redditch, with partners Oaktree Capital.
• The German portfolio 4 joint venture debt put into special servicing in July 2012 as it did not meet the required loan to value test. The overall impact of the German portfolio 4 property devaluation and impairment resulted in a Group loss of £9.9 million at 30 June 2012.

Operational

• Resilience of UK shopping centres demonstrated by footfall outperforming the national index by 2.6% and stable year on year occupancy of 94.6% at 30 June 2012.
• Delivery of 34 new lettings at 1.5% below ERV, and 10 lease renewals at 0.2% above ERV for UK shopping centres
• Total UK passing rent declined by 2.0% compared to 30 December 2011 and German passing rent remained stable.
• All three UK funds outperformed the IPD index
• Significant step forward for asset management and development with work on site commenced at Thurrock, Hemel Hempstead redevelopment gaining planning permission and a number of pre-lets finalised and key terms agreed to enable the development of Waterside Lincoln.

Commenting on the results John Clare, Chairman said:
"Growth in recurring profitability reflects the underlying resilience of the business. This strong performance has cushioned the impact of softening values in parts of the German portfolio and shopping centres outside of Greater London and the South East. In challenging markets, management is making progress in recycling capital from non-core assets. Whilst degearing remains the immediate priority, the Board will consider how best to maximise shareholder returns once the disposal programme is more advanced."