REG - British Land Co PLC - Half-year Report

British LandAnnouncement

20/11/2024 07:00

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RNS Number : 8736M  British Land Co PLC  20 November 2024

20 November 2024

successfully Deploying capital into our CONVICTION sectors

Simon Carter, Chief Executive said:

"We are pleased the operational and financial momentum in our business
continues. Strong levels of leasing ahead of ERV and sustained cost discipline
enabled us to grow profits again, despite significant development activity,
which will be a key driver of future profit growth. Our values were up 0.2%,
with a particularly strong performance in retail parks offsetting residual
yield movement in campuses.

Since April, we have disposed of £456m of non-core assets and rapidly
deployed £711m into retail parks, one of our preferred subsectors, given
their attractive occupational fundamentals and high occupancy. Since 2021 we
have increased our exposure to retail parks from 15% of the portfolio to 32%
today. This conviction is paying off, with retailers competing for
cost-efficient out-of-town space to support their online operations. This is
leading to strong rental growth and valuation uplifts which are outperforming
all other subsectors.

Similarly, the super prime space we are developing on our campuses is
benefiting from a significant imbalance between the demand and supply for new
and substantially refurbished space, particularly in the City, where we
estimate a shortfall of 5 million square feet over the next four years. This
is leading to strong rental growth at the top end of the market.

While geopolitical risk remains elevated and there has been some volatility
around the recent Budget and US election, British Land's portfolio is well
positioned for the inflection in the cycle. The continued strength of our
occupational markets, underpins our guidance of 3-5% rental growth across the
portfolio, and our ability to generate attractive future returns."

Financial

•    Underlying Profit of £143m up 1%

•    EPRA cost ratio 15.3% (FY24 16.4%)

•    Underlying earnings per share (EPS) of 15.3p up 1%

•    Dividend per share of 12.24p up 1%

•    Total accounting return of 2.8% in the period

Balance sheet

•    EPRA Net Tangible Assets (NTA) per share of 567p up 1% in the period
and pro forma NTA per share of 556p(1)

•    Pro forma Loan to Value (LTV) 37.8%(1) and HY25 LTV at 38.7% (FY24
37.3%)

•    Pro forma Group Net Debt to EBITDA 7.4x(1) and HY25 Group Net Debt
to EBITDA 7.8x (FY24 6.8x)

•    Fitch Senior Unsecured credit rating at 'A' with stable outlook
(affirmed July 2024)

•    Interest rate on our debt 97% hedged for FY25, 78% hedged on average
over the next five years

CAPITAL ACTIVITY

•    £456m of disposals since 1 April 2024, including Meadowhall,
completed in July 2024

•    £711m of retail parks acquired since 1 April 2024, at a blended net
equivalent yield (NEY) of 7.0%

•    Raised £301m via an equity placing in October 2024

•    £1.6bn undrawn facilities and cash, with £1.4bn of financing
activity since 1 April 2024

operational metrics

•    Portfolio occupancy 98%(2): Campuses 97%(2), Retail Parks 99%,
London Urban Logistics 100%

•    Leased 1.7m sq ft, 8.0% ahead of ERV

•    Campus leasing 957k sq ft, 8.3% ahead of ERV

•    Campus under offers as of 30 September 2024, 296k sq ft, with a
further 1.7m sq ft in negotiations

•    Retail & London Urban Logistics leasing 759k sq ft, 6.9% ahead
of ERV and 509k sq ft under offer

•    Like-for-like rental growth +3%: Campuses +4%, Retail & London
Urban Logistics +2%

Portfolio VALUATION

•    Values up 0.2%: Campuses -1.7%, Retail Parks +5.1%, London Urban
Logistics -2.6%

•    Six-month ERV growth of 2.5%: Campuses 1.7%, Retail Parks 3.7%,
London Urban Logistics 0.3%

•    NEY -2 bps to 6.1%: Campuses +12 bps to 5.6%, Retail Parks -22 bps
to 6.6%, London Urban Logistics +7 bps to 4.9%

Sustainability

•    GRESB rating of 5* for both standing investments and developments,
scoring 100/100 for our developments

•    c.64% of the portfolio rated EPC A or B, up from 58% at FY24

Outlook

·   Reiterating ERV guidance of 3-5% p.a. growth across the portfolio

·   Now expect FY25 Underlying EPS to be 28.1p, reflecting the accretive
£441m retail park portfolio acquisition and placing

 

Summary performance

 Period ended                                          30 September  30 September  % Change

2024

                                                                      2023
 INCOME STATEMENT
 Underlying Profit(3)                                  £143m         £142m         1%
 Underlying earnings per share(3)                      15.3p         15.2p         1%
 IFRS profit (loss) after tax                          £109m         £(61)m
 IFRS basic earnings per share                         11.7p         (6.6)p
 Dividend per share                                    12.24p        12.16p        1%
 Total accounting return(3)                            2.8%          (2.0)%

 As at                                                 30 September  31 March

2024
2024
 BALANCE SHEET
 Portfolio at valuation (proportionally consolidated)  £8,867m       £8,684m       0.2% (4)
 EPRA Net Tangible Assets per share(3)                 567p          562p          1%
 IFRS net assets                                       £5,308m       £5,312m
 Net Debt to EBITDA (Group)(5,6)                       7.8x          6.8x
 Loan to value (proportionally consolidated)(6,7)      38.7%         37.3%
 Fitch Senior Unsecured credit rating                  A             A

 Period ended                                          30 September  30 September

2024
2023
 OPERATIONAL STATISTICS
 Lettings and renewals over 1 year                     1.4m sq ft    1.3m sq ft
 Total lettings and renewals                           1.7m sq ft    1.6m sq ft
 Committed and recently completed developments         2.9m sq ft    1.9m sq ft
 SUSTAINABILITY PERFORMANCE
 MSCI ESG                                              AAA rating    AAA rating
 GRESB (standing investments / developments)           5* / 5*       5* / 5*

1. Pro forma for £441m retail park portfolio acquisition funded via equity
placing in October 2024 and £86m of disposals post period end (including
£62m exchanged for sale/under offer)

2. Occupancy excludes recently completed developments at Norton Folgate,
Aldgate and The Priestley Centre

3. See Note 2 to the condensed interim financial statements for definition and
calculation.

4. Valuation movement during the period (after taking account of capex) of
properties held at the balance sheet date, including developments (classified
by end use), purchases, sales.

5. Net Debt to EBITDA on a Group basis excludes joint venture borrowings and
includes distributions and other receivables from joint ventures.

6. See Note 8 to the condensed interim financial statements for definition,
calculation and reference to IFRS metrics.

7. EPRA Loan to value is disclosed in Table B of the condensed interim
financial statements.

 

Dividends

Our dividend is semi-annual, and in line with our dividend policy, is
calculated at 80% of Underlying EPS based on the most recently completed
six-month period. Applying this policy, the Board are proposing an interim
dividend for the six months ended 30 September 2024 of 12.24p per share.
Payment will be made on Wednesday 15 January 2025 to shareholders on the
register at close of business on Friday 6 December 2024. The dividend will be
a Property Income Distribution. A Dividend Reinvestment Plan (DRIP) is
provided by Equiniti Financial Services Limited which enables the Company's
shareholders to elect to have their cash dividend payments used to purchase
the Company's shares. More information can be found at
www.shareview.co.uk/info/drip.

 

full unedited text

In accordance with DTR 6.3.5 (1A), the full unedited Half Year results for the
six months ended 30 September 2024 will shortly be available to download from
the National Storage Mechanism. A copy is also available on the Company's
website: https://www.britishland.com/news/half-year-results-202425
(https://www.britishland.com/news/half-year-results-202425) and
here: http://www.rns-pdf.londonstockexchange.com/rns/8736M_1-2024-11-19.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8736M_1-2024-11-19.pdf)

Results Presentation and Investor Conference Call

A presentation of the results will take place at 9am on Wednesday 20 November
2024 at Peel Hunt, 100 Liverpool Street, Broadgate and will be broadcast live
via webcast (www.britishland.com (http://www.britishland.com) ) and conference
call. The details for the conference call and weblink are as follows:

UK Toll Free Number:        0800 358 1035

International:                      +44 20 3936 2999

Access code:                      922991

Click for access:                  Audio weblink
(https://streamstudio.world-television.com/927-1254-40622/en)

A dial in replay will be available later in the day for 7 days. The details
are as follows:

Replay number:                   020 3936 3001

Passcode:                            470509

Accompanying slides will be made available at www.britishland.com
(http://www.britishland.com/) just prior to the event starting.

 

For Information Contact

Investors

Sandra Moura, British Land
 07989 755535

Lizzie King, British Land
    07808 912784

Sean Pearcey-Stone, British Land                      020 7467 3519

Media

Charlotte Whitley, British Land
 07887 802535

Guy Lamming/Gordon Simpson, FGS Global      020 7251 3801

 
                          BritishLand-UK@fgsglobal.com

 

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