2016 Full-Year Results Announcement
Our full year results for 2016 were announced at 9am on Thursday 9th March 2017.
Details of the announcement are shown below, and an on-demand version of the webcast will available on the link below shortly after the presentation.
Capital & Regional plc
Full Year Results to 30 December 2016
Capital & Regional plc (LSE: CAL), the UK focused specialist REIT with a portfolio of dominant in-town community shopping centres, today announces its full year results to 30 December 2016.
Asset management strategy driving strong income growth and underpinning dividend
- 7% increase in Net Rental Income to £52.6 million (2015: £49.3 million)
- Adjusted Profits1 up 11.7% to £26.8 million (2015: £24.0 million)
- 7% increase in total dividend to 3.39p per share for 2016, ahead of guidance
Successful recycling of capital continuing into 2017
- Acquisition of The Exchange Centre, Ilford completed on 8 March 2017 for £78.0 million, reflecting NIY of 6.70%
- Disposal of Ipswich joint venture in February 2017 delivering IRR of over 40%
- Disposal of The Mall, Camberley for £86.0 million at NIY of 5.9% in November 2016
- Acquisition of The Marlowes, Hemel Hempstead and adjacent properties in February/March 2016 for £53.8 million at NIY of 7.0%
Delivery of asset management initiatives supported by strong occupier demand
- Capex investment of £21.2 million on Wholly-owned assets in 2016 including:
- £6.2 million at Maidstone - refurbishment and TJ Hughes reconfiguration
- £4.2 million at Wood Green - new Travelodge and extended Easygym
- £2.9 million at Blackburn - new Ainsworth Mall entrance and units at Blackburn
- New lettings and renewals at an average 18%2 premium to previous passing rent and combined 2.1%2 premium to ERV
Enhanced balance sheet strength and flexibility
- £372.5 million long-term refinancing completed on 4 January 2017 locking in historically low interest rates and providing flexibility for asset recycling
- Weighted average debt maturity, including new Ilford debt, increased from 3.6 to 7.8 years3,4,6
- Basic and EPRA NAV per share resilient, at 68p (2015: 72p and 71p respectively), reflecting a 1.6p reduction attributable to implementing the new long term debt package and a further 1.2p from the 1% increase in stamp duty
- Average cost of debt after Mall refinancing and Ilford acquisition reduced to 3.26% from 3.51%6
|See-through Net Rental Income||£52.6m||£49.3m||+6.7%|
|Adjusted Earnings per share||3.8p||3.4p||+11.7%|
|IFRS (Loss)/Profit for the period||£(4.4)m||£100.0m|
|Total dividend per share||3.39p||3.12p||+8.7%|
|Net Asset Value (NAV) per share||68p||72p||-4p|
|EPRA NAV per share||68p||71p||-3p|
|Proforma group net debt3||£328.6m||£338.1m||-£9.5m|
|Proforma see-through net debt to property value3,5||42%||41%||+1 p.p.|
|See-through net debt to property value at date of results3,4,5||46%||45%6||+1 p.p|
1 Adjusted Profit is as defined in the Glossary and Note 1 to the Financial Statements. It incorporates profits from operating activities and excludes revaluation of properties and financial instruments, gains or losses on disposal, exceptional items and other defined terms. We previously used 'Operating Profit' but have amended the term to clarify that it is an adjusted measure. The only change to the definition is to incorporate tax charges or credits relating to operating activities. A reconciliation to the statutory result is provided in the Financial Review. EPRA figures and a reconciliation to EPRA EPS are shown in Note 5 to the Financial Statements.
2 Wholly-owned portfolio excluding The Mall, Camberley given its disposal in November 2016.
3 Reflecting refinancing of Mall assets completed on 4 January 2017, debt maturity is assuming exercise of extension options.
4 Further adjusted for the Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017.
5 See-through net debt divided by property valuation.
6 2015 reflects the Hemel Hempstead acquisitions completed in February/March 2016.
Commenting on the results, John Clare, Chairman said:
“I am pleased to report that Adjusted Profit has grown by 11.7% to £26.8 million. This represents another strong performance in a year where the focus has shifted decisively towards boosting income from delivery of the asset management and development initiatives across the portfolio.
“The results have supported an increase in the dividend for the year of 8.7%, ahead of previous guidance. Reflecting our confidence in the growth prospects of the business, underpinned by our ongoing Capex investment, the Board is reaffirming its commitment to a target of annual dividend growth in the range of 5-8% in the medium-term.”
Hugh Scott-Barrett, CEO added:
“Whilst the business environment may be challenging, the prospects for Capital & Regional are exciting. Our assets have proven to be very resilient and Capex investment over the last two years has provided a strong platform for future income growth. This, supported by the high demand we continue to see from occupiers for the attractive and affordable space in our vibrant centres, provides us with confidence in our ability to maintain and grow the dividend.
“We expect to benefit from the average 13.5% reduction in rateable values when they are applied next month and our portfolio of asset management initiatives continues to grow with leisure reconfigurations providing an opportunity to reposition both the Hemel Hempstead and Ilford schemes. In addition we are looking for planning consent for the extension and residential development to be granted at Walthamstow during the year whilst the development of master plans in Luton and Wood Green are likely to be transformational for both the town centre and our shopping centres which sit at the heart of each community.
"Looking forward, there is no shortage of accretive opportunities both within our existing portfolio and beyond. This underpins our confidence in the growth prospects of the business by enabling us to focus on those initiatives which generate the best returns.”
For further information:
Capital & Regional: Tel: 020 7932 8000
Hugh Scott-Barrett, Chief Executive
Charles Staveley, Group Finance Director
FTI Consulting: Tel: 020 3727 1000
Notes to editors:
About Capital & Regional plc
Capital & Regional is a UK focused specialist retail REIT with a strong track record of delivering value enhancing retail and leisure asset management opportunities across a c. £1 billion portfolio of in-town dominant community shopping centres. Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch. Capital & Regional manages these assets, which comprise approximately 820 retail units and attract c. 1.7 million shopping visits each week, through its in-house expert property and asset management platform. For further information see www.capreg.com.