2017 Interim Results Announcement
Our 2017 interim results have been announced. The the press release and presentation slides are available to download below, along with the on-demand webcast.
2017 Interim Results
Capital & Regional plc (LSE: CAL), the UK focused REIT with a portfolio of dominant in-town community shopping centres, today announces its half year results to 30 June 2017.
Lawrence Hutchings, Chief Executive, said:
“This is a strong set of results which reflect that whilst elements of the retail sector may face challenges, the continued strong occupier demand for our centres as well as the local and convenient nature of our assets, which cater for the non-discretionary and value-orientated needs of our shoppers, gives us great comfort over the security of our income. This, allied with our proven track record of driving income and delivering results through selective but significant capital expenditure investment, underpins the future growth potential of the business. We also see opportunity to further enhance profitability by seeking greater efficiency in our operating platform and streamlining our structure through various initiatives. Some of these are already delivering tangible results and we are initially targeting annualised savings of at least £1.8 million by 2018, equivalent to a c 20% reduction in 2016 central costs.
“Reflecting the strong feeling of confidence in the future growth prospects of the business, the Board has announced an Interim dividend of 1.73p, representing a 6.8% increase on the prior year. With the second half of the year set to comparatively benefit from several major lettings coming on stream and the timing of recent acquisitions and disposals we expect the Full Year 2017 Dividend will be at the top end of our targeted growth range of at least 5% to 8% per annum.”
Income growth underpins strong financial results and supports an increased dividend, with further improvements expected in H2
- Adjusted Profits1 up 6.6% to £14.5 million (June 2016: £13.6 million) setting the business on track for its fourth consecutive year of Adjusted Profit growth
- IFRS Profit for the period of £12.1 million (June 2016: Loss of £4.4 million)
- Like-for-like2 Net Rental Income up 0.5% despite the loss of H1 2016 BHS income, up 4.4%, once adjusted for this
- 34 new lettings and renewals achieved at an average 21%3 premium to previous rents and an 8.4%3 premium to ERV. Passing rent up 1.7% on a like-for-like basis
- Full period benefit of Ilford acquisition, and timing of Camberley sale in November 2016, will strengthen comparative second half year-on-year performance
- Enhanced focus on cost efficiencies targeting annualised savings of at least c £1.8 million by 2018
- Interim dividend increased by 6.8% to 1.73p per share (June 2016: 1.62p). Second half improvements underpin target for total Full Year 2017 dividend at top end of the stated 5% to 8% per annum growth range
Capex investment and specialist asset management continue to drive performance
- £80 million Capex plan gathering further momentum with a number of significant initiatives substantially completed during the period, including:
- Blackburn – Wilko opening in September 2017 from the refurbished former BHS unit
- Walthamstow – new units to Lidl, The Gym and Gökyüzü due to open in Q4 2017
- Wood Green – £6.4 million new Travelodge scheduled for Q3 2017 opening
- These lettings will bring £1.4 million of annualised rent on stream in H2 2017 from a total capex spend of £11.6 million
- Planning applications to deliver leisure transformation at Hemel Hempstead and Walthamstow extension submitted
- Strong occupier demand reflected in continued high occupancy at 95.5% (31 December 2016: 95.4%)
- 4 million shopper visits in first half of the year representing a modest 0.9% like-for-like2 fall, though once again significantly outperforming the national index which was -2.7%
Robust balance sheet with long term debt security
- Basic and EPRA NAV per share resilient, at 68p and 67p respectively (December 2016: both 68p)
- £30 million Revolving Credit Facility extended to January 2022, meaning all Group debt has minimum tenure of 4.5 years. Weighted average debt maturity of 7.8 years4
- Cost of debt reduced to 3.25%5 following £372.5 million January 2017 refinancing leading to annual saving of c £0.5 million
|-||6 months to June 2017||Year to Dec 2016||6 months to June 2017|
|Net Rental Income6||£25.0m||£50.4m||£25.4m|
|Adjusted Earnings per share1||2.06p||3.82p||1.94p|
|IFRS Profit/(Loss) for the period||£12.1m||£(4.4)m||£7.2m|
|Total dividend per share||1.73p||3.39p||1.62p|
|Net Asset Value (NAV) per share||68p||68p||71p|
|EPRA NAV per share||67p||68p||71p|
|Group net debt6,7||£403.1m||£398.1m||£403.1m|
|Net debt to property value6,7||46%||46%||46%|
1 Adjusted Profit is as defined in the Glossary. 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. A reconciliation of this, and Adjusted Earnings per share, to the statutory result is provided in the Financial Review. EPRA figures and a reconciliation to EPRA EPS are shown in Note 7 to the Financial Statements. The EPRA measures used throughout this report are industry best practice performance measures established by the European Public Real Estate Association. They are defined in the Glossary to the Financial Statements.
2 Like-for-like excludes the impact of property purchases and sales on year to year comparatives. Like-for-like footfall also excludes entrances impacted by development work. A reconciliation of Like-for-like Net Rental Income to total Net Rental Income for the period is provided in the Financial Review.
3 For lettings and renewals (excluding development deals) with a term of five years or longer and which did not include a turnover element.
4 As at 30 June 2017, adjusted for RCF extension completed on 3 August 2017 and assuming exercise of all extension options.
5 Assuming RCF fully drawn.
6 Wholly-owned assets
7 December 2016 figures are proforma, adjusted for the refinancing of Mall assets completed on 4 January 2017, Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017.