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within the £2.2m adjustment above is revenue of £1.7m, a net surplus on revaluation of investment properties of £0.9m,
joint venture profits in non-wholly owned subsidiaries of £nil, less costs of £0.4m.
4. Revenue
All revenue is classified within the 'Revenue profit' column of the income statement, with the exception of proceeds on the
sale of trading properties and income arising on long-term development contracts, which are presented in the 'Capital and
other items' column. Also included in the 'Capital and other items' column is the non-owned element of the Group's
subsidiaries which is excluded from revenue profit.
Six months ended Six months ended30 September 2015
30 September 2016
Revenue Capital and other items Total Revenue Capital and other items Total
profit profit
£m £m £m £m £m £m
Rental income (excluding adjustment for lease incentives) 270.2 1.0 271.2 289.5 1.4 290.9
Adjustment for lease incentives 19.4 0.1 19.5 9.7 - 9.7
Rental income 289.6 1.1 290.7 299.2 1.4 300.6
Service charge income 42.7 0.3 43.0 42.2 0.3 42.5
Other property related income 13.7 - 13.7 15.9 - 15.9
Trading property sales proceeds - 22.8 22.8 - 4.2 4.2
Finance lease interest 5.0 - 5.0 5.2 - 5.2
Other income 1.3 - 1.3 1.8 - 1.8
352.3 24.2 376.5 364.3 5.9 370.2
5. Costs
All costs are classified within the 'Revenue profit' column of the income statement, with the exception of the impairment
of long-term development contracts, the cost of sale of trading properties, movement in impairment of trading properties,
amortisation of intangible assets, impairment of goodwill and head office relocation costs which are presented in the
'Capital and other items' column. Also included in the 'Capital and other items' column is the non-owned element of the
Group's subsidiaries which is excluded from revenue profit.
Six months ended Six months ended30 September 2015
30 September 2016
Revenue Capital and other items Total Revenue Capital and other items Total
profit profit
£m £m £m £m £m £m
Rents payable 4.5 - 4.5 5.1 - 5.1
Service charge expense(1) 44.0 0.3 44.3 43.5 0.3 43.8
Direct property expenditure(1) 26.0 0.1 26.1 30.2 0.1 30.3
Indirect property expenditure(1) 37.1 0.1 37.2 40.4 - 40.4
Impairment of long-term development contracts - - - - 0.1 0.1
Trading property disposals - 21.0 21.0 - 4.4 4.4
Movement in impairment of trading properties(2) - (9.6) (9.6) - (1.2) (1.2)
Amortisation of intangible assets - 0.8 0.8 - 0.8 0.8
Impairment of goodwill - 0.1 0.1 - 0.2 0.2
Head office relocation - (1.7) (1.7) - - -
111.6 11.1 122.7 119.2 4.7 123.9
1. The table above includes Group employee costs for the period of £29.9m (2015: £33.9m), which has been split into
£4.1m (2015: £3.6m) within service charge expense, £0.1m (2015: £0.2m) within direct property expenditure and £25.7m (2015:
£30.1m) within indirect property expenditure, of which £10.3m relates to Group services (2015: £10.8m).
2. The movement in impairment of trading properties in the six months ended 30 September 2016 relates to the reversal of
previous impairment charges related to residential land, where the valuer's assessment of net realisable value increased
over the period.
6. Interest Six months ended Six months ended
30 September 2016 30 September 2015
Revenueprofit Capital and other items Total Revenue profit Capital and other items Total
£m £m £m £m £m £m
Interest income
Interest received on loan investments - - - 0.5 - 0.5
Other interest receivable 0.3 - 0.3 0.5 - 0.5
Net interest receivable from joint ventures 16.7 - 16.7 15.3 - 15.3
Net pension interest 0.5 - 0.5 0.2 - 0.2
Fair value movement on interest-rate swaps - - - - 2.2 2.2
Total interest income 17.5 - 17.5 16.5 2.2 18.7
Interest expense
Bond and debenture debt (73.5) - (73.5) (84.7) - (84.7)
Bank and other short term borrowings (8.1) - (8.1) (11.3) - (11.3)
Fair value movement on foreign exchange swaps - 23.4 23.4 - 9.5 9.5
Foreign exchange movement on borrowings - (23.4) (23.4) - (9.5) (9.5)
Fair value movement on interest-rate swaps - (16.7) (16.7) - - -
Fair value movement on long-term liabilities - (2.2) (2.2) - - -
Amortisation of bond exchange de-recognition adjustment - (12.4) (12.4) - (11.4) (11.4)
Redemption of medium term notes(1) - (16.6) (16.6) - - -
Impairment of unamortised finance costs - (0.7) (0.7) - - -
Other interest payable (0.6) - (0.6) (0.3) - (0.3)
(82.2) (48.6) (130.8) (96.3) (11.4) (107.7)
Interest capitalised in relation to properties under development 3.5 - 3.5 7.8 - 7.8
Total interest expense (78.7) (48.6) (127.3) (88.5) (11.4) (99.9)
Net interest expense (61.2) (48.6) (109.8) (72.0) (9.2) (81.2)
Joint venture net interest expense (7.8) (9.2)
Net interest expense included in revenue profit (69.0) (81.2)
1. Presented as an exceptional item in note 3.
Finance lease interest payable of £0.5m (2015: £0.5m) is included within rents payable as detailed in note 3.
7. Net assets per share 30 September 31 March
2016 2016
£m £m
Net assets attributable to owners of the parent 11,445.9 11,698.9
Fair value of interest-rate swaps - Group 37.1 31.9
- Joint ventures 2.4 2.2
Deferred tax liability arising on business combination 4.8 4.9
Goodwill on deferred tax liability (4.8) (4.9)
EPRA net assets 11,485.4 11,733.0
Reverse bond exchange de-recognition adjustment (349.5) (368.3)
Adjusted net assets attributable to owners of the parent 11,135.9 11,364.7
Reinstate bond exchange de-recognition adjustment 349.5 368.3
Fair value of interest-rate swaps - Group (37.1) (31.9)
- Joint ventures (2.4) (2.2)
Deferred tax liability arising on business combination (4.8) (4.9)
Excess of fair value of debt over book value (note 15) (1,218.1) (1,000.8)
EPRA triple net assets 10,223.0 10,693.2
30 September 2016 31 March
2016
million million
Number of ordinary shares in issue 801.2 801.2
Number of treasury shares (10.5) (10.5)
Number of own shares (0.9) (1.2)
Number of ordinary shares - basic net assets per share 789.8 789.5
Dilutive effect of share options 1.1 2.9
Number of ordinary shares - diluted net assets per share 790.9 792.4
30 September 2016 31 March
2016
pence pence
Basic net assets per share 1,449 1,482
Diluted net assets per share 1,447 1,476
Adjusted basic net assets per share 1,410 1,439
Adjusted diluted net assets per share 1,408 1,434
EPRA net assets per share 1,452 1,481
EPRA triple net assets per share 1,293 1,349
Adjusted net assets per share excludes the fair value of interest-rate swaps used for hedging purposes and the bond
exchange de-recognition adjustment as management consider this better represents the expected future cash flows of the
Group. EPRA measures have been included to assist comparison between European property companies. We believe our measure of
adjusted net assets attributable to owners of the parent is more indicative of underlying business performance.
30 September 2016 30 September
2015
pence pence
(Decrease)/increase in adjusted diluted net assets per share (26.0) 74.0
Dividend paid per share in the period (note 9) 18.7 16.1
Total return (a) (7.3) 90.1
Adjusted diluted net assets per share at 31 March (b) 1,434 1,293
Total business return (a/b) (0.5%) 7.0%
8. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
The Group has also chosen to disclose adjusted earnings per share in order to provide an indication of the Group's
underlying business performance. Adjusted earnings and adjusted earnings per share are calculated on a proportionate basis
and exclude capital and exceptional items. We believe our measure of adjusted diluted earnings per share is more
appropriate than the EPRA measure in the context of our business.
Six months ended
30 September
2016 2015
£m £m
(Loss)/profit for the period attributable to owners of the parent (95.8) 708.1
Net deficit/(surplus) on revaluation of investment properties 259.6 (519.3)
Movement in impairment of trading properties (9.6) (5.6)
(Profit)/loss on disposal of trading properties (1.8) 0.2
Profit on disposal of investment properties (11.0) (9.8)
Loss on disposal of investment in joint venture 1.9 -
Fair value movement on foreign exchange swaps (23.4) (9.5)
Foreign exchange movement on borrowings 23.4 9.5
Fair value movement on interest-rate swaps 16.7 (2.2)
Fair value movement on long-term liabilities 2.2 -
Impairment of unamortised finance costs 0.7 -
Redemption of medium term notes 16.6 -
Revaluation of redemption liabilities 1.6 2.4
Impairment of goodwill 0.1 0.2
Amortisation of intangible asset 0.8 0.8
Adjustment for non-wholly owned subsidiaries(1) (1.0) (2.2)
Joint venture taxation - 0.2
Group taxation 0.8 (0.2)
EPRA earnings attributable to owners of the parent 181.8 172.6
Head office relocation (1.7) -
Impairment of long-term development contracts(2) - 0.2
Amortisation of bond exchange de-recognition adjustment 12.4 11.4
Adjusted earnings attributable to owners of the parent 192.5 184.2
1. This adjustment represents the non-owned element of the Group's subsidiaries which is excluded from adjusted
earnings.
2. The impairment of long-term development contracts has been removed from our adjusted earnings due to the long-term,
capital nature of these programmes.
Six months ended
30 September
2016 2015
million million
Weighted average number of ordinary shares 801.2 801.1
Weighted average number of treasury shares (10.5) (10.5)
Weighted average number of own shares (1.1) (0.8)
Weighted average number of ordinary shares - basic earnings per share 789.6 789.8
Dilutive effect of share options 1.6 3.3
Weighted average number of ordinary shares - diluted earnings per share 791.2 793.1
Six months ended
30 September
2016 2015
pence pence
Basic (loss)/earnings per share (12.1) 89.7
Diluted (loss)/earnings per share (12.1) 89.3
Adjusted earnings per share 24.4 23.3
Adjusted diluted earnings per share 24.3 23.2
EPRA earnings per share 23.0 21.9
EPRA diluted earnings per share 23.0 21.8
9. Dividends
Pence per share Six months ended 30 September
2016 2015
Ordinary dividends paid Payment date PID Non-PID Total £m £m
For the year ended 31 March 2015:
Third interim 10 April 2015 7.9 - 7.9 62.4
Final 24 July 2015 8.15 - 8.15 64.4
For the year ended 31 March 2016:
Third interim 8 April 2016 8.15 - 8.15 64.4
Final 28 July 2016 10.55 - 10.55 83.2
Gross dividends 147.6 126.8
Historic unclaimed dividends refunded - (0.2)
Dividends in statement of changes in equity 147.6 126.6
Timing difference on payment of withholding tax (11.8) (2.4)
Dividends in the statement of cash flows 135.8 124.2
The Company paid a first interim dividend in respect of the current financial year of 8.95p per Ordinary share, wholly as a
Property Income Distribution (PID), representing £70.7m in total (2015: 8.15p or £64.4m), on 7 October 2016.
The Board has declared a second interim dividend of 8.95p per Ordinary share to be payable wholly as an ordinary dividend
(2015: 8.15p). This second interim dividend will result in a further estimated distribution of £70.7m (2015: £64.4m) and
will be paid on 6 January 2017 to shareholders registered at the close of business on 2 December 2016.
A Dividend Reinvestment Plan (DRIP) has been available in respect of all dividends paid during the period.
10. Net cash generated from operations Six months ended
30 September
2016 2015
Reconciliation of operating profit to net cash generated from operations: £m £m
Operating (loss)/profit (16.5) 646.6
Adjustments for:
Depreciation 1.4 0.9
Impairment of long-term development contracts - 0.1
Net deficit/(surplus) on revaluation of investment properties 277.4 (394.5)
Movement in impairment of trading properties (9.6) (1.2)
(Profit)/loss on disposal of trading properties (1.8) 0.2
Profit on disposal of investment properties (9.0) (5.8)
Loss on disposal of investment in joint venture 1.9 -
Impairment of goodwill 0.1 0.2
Amortisation of intangible asset 0.8 0.8
Share-based payment charge 2.3 4.2
Defined benefit pension scheme charge 0.6 0.6
247.6 252.1
Changes in working capital:
Increase in receivables (9.1) (33.3)
Decrease in payables and provisions (21.7) (2.3)
Net cash generated from operations 216.8 216.5
11. Investment properties
Six months ended Six months ended Six months ended
30 September 31 March 30 September
2016 2016 2015
£m £m £m
Net book value at the beginning of the period 12,357.7 12,611.6 12,158.0
Acquisitions 13.6 6.9 150.0
Capital expenditure: Investment portfolio 32.8 24.3 66.9
Developments 53.5 41.2 62.4
Capitalised interest 3.5 3.7 5.5
Disposals (16.1) (655.0) (71.4)
Net movement in finance leases 14.8 (18.9) -
Transfer to non-current assets held for sale - - (154.3)
Net (deficit)/surplus on revaluation of investment properties (277.4) 343.9 394.5
Net book value at the end of the period 12,182.4 12,357.7 12,611.6
The fair value of investment properties at 30 September 2016 was determined by the Group's external valuer, CBRE. The
valuations are in line with RICS standards and were arrived at by reference to market evidence of transactions for similar
properties. The valuations performed by the independent valuer are reviewed internally by senior management and relevant
people within the business. This includes discussions of the assumptions used by the external valuer, as well as a review
of the resulting valuations. Discussions of the valuation process and results are held between senior management, the audit
committee and the external valuer on a half-yearly basis.
The market value of the Group's investment properties, as determined by the Group's external valuer, differs from the net
book value presented in the balance sheet due to the Group presenting lease incentives, tenant finance leases and head
leases separately. The following table reconciles the net book value of the investment properties to the market value.
30 September 2016 31 March 2016
Group Joint ventures(1) Adjustment for proportionate share(2) Combined Portfolio Group Joint Adjustment for proportionate share(2) Combined Portfolio
(excl. joint ventures) (excl. joint ventures) ventures(1)
£m £m £m £m £m £m £m £m
Net book value 12,182.4 1,685.8 (33.8) 13,834.4 12,357.7 1,629.9 (33.6) 13,954.0
Plus: tenant lease incentives 287.3 51.3 (0.3) 338.3 267.5 42.8 (0.3) 310.0
Less: head leases capitalised (13.6) - 0.1 (13.5) (13.5) - - (13.5)
Plus: properties treated as finance leases 222.8 - (0.8) 222.0 220.5 - (0.5) 220.0
Market value 12,678.9 1,737.1 (34.8) 14,381.2 12,832.2 1,672.7 (34.4) 14,470.5
1. Refer to note 12 for a breakdown of this amount by entity.
2. This represents the interest in X-Leisure which we do not own, but which is consolidated in the Group numbers.
The following table reconciles the net deficit/surplus on revaluation of investment properties presented in the unaudited
income statement to the valuation (deficit)/surplus discussed in the narrative section of this report, which is presented
on a proportionate basis.
Six months ended Six months ended
30 September 30 September
2016 2015
£m £m
Net (deficit)/surplus on revaluation of investment properties (277.4) 394.5
Add: joint ventures' net surplus on revaluation of investment properties 17.9 125.7
Deduct: Adjustment for proportionate share(1) (0.1) (0.9)
Valuation (deficit)/surplus (259.6) 519.3
1. This represents the interest in X-Leisure which we do not own, but which is consolidated in the Group numbers.
12. Joint arrangements
The Group's joint arrangements are described below:
Joint ventures Percentage owned & Business Year end date(1) Joint venture partner
voting rights segment
Held at 30 September 2016
20 Fenchurch Street Limited Partnership 50.0% London Portfolio 31 March Canary Wharf Group plc
Nova, Victoria(2) 50.0% London Portfolio 31 March Canada Pension Plan Investment Board
Metro Shopping Fund Limited Partnership 50.0% Retail Portfolio 31 March Delancey Real Estate Partners Limited
St. David's Limited Partnership 50.0% Retail Portfolio 31 December Intu Properties plc
Westgate Oxford Alliance Limited Partnership 50.0% Retail Portfolio 31 March The Crown Estate Commissioners
The Oriana Limited Partnership(3) 50.0% London Portfolio 31 March Frogmore Real Estate Partners Limited Partnership
Harvest(4)(5) 50.0% Retail Portfolio 31 March J Sainsbury plc
The Ebbsfleet Limited Partnership(5) 50.0% London Portfolio 31 March Ebbsfleet Property Limited
Millshaw Property Co. Limited(5) 50.0% Retail Portfolio 31 March Evans Property Group Limited
West India Quay Unit Trust(5)(6) 50.0% Retail Portfolio 31 December Schroder Exempt Property Unit Trust
Joint operation Ownership interest Business Joint operation partners
segment
Bluewater, Kent 30.0% Retail Portfolio M&G Real Estate and GICLend Lease Retail PartnershipHermes and Aberdeen Asset Management
The following joint arrangements were sold in the six months ended 30 September 2016:
Joint ventures
Countryside Land Securities (Springhead) Limited(5)(7) 50.0% London Portfolio Countryside Properties PLC
1. The year end date shown is the accounting reference date of the joint venture. In all cases the Group's accounting is
performed using financial information for the Group's own reporting period and reporting date.
2. Nova, Victoria includes the Victoria Circle Limited Partnership, Nova Residential Limited Partnership and Victoria
Circle Developer Limited.
3. On 23 September 2016, The Oriana Limited Partnership disposed of its interest in 26-32 Oxford Street, W1.
4. Harvest includes Harvest Two Limited Partnership and Harvest Development Management Limited.
5. Included within Other in subsequent tables.
6. West India Quay Unit Trust is held in the X-Leisure Unit Trust (X-Leisure) in which the Group holds a 95% share.
7. On 18 April 2016, the Group disposed of its interest in Countryside Land Securities (Springhead) Limited.
All of the Group's joint arrangements have their principal place of business in the United Kingdom. All of the Group's
joint arrangements own and operate investment property with the exception of The Ebbsfleet Limited Partnership which holds
development land as trading properties, and Millshaw Property Co. Limited which disposed of its only property interest in
the comparable period. The Westgate Oxford Alliance Limited Partnership, Nova, Victoria and The Oriana Limited Partnership
are also engaged in the development of investment and trading properties. The activities of all the Group's joint
arrangements are therefore strategically important to the business activities of the Group.
All joint ventures are registered in England and Wales with the exception of the Metro Shopping Fund Limited Partnership
and West India Quay Unit Trust which are registered in Jersey.
Six months ended 30 September 2016
Joint ventures 20 Fenchurch Street Limited Partnership Nova, Victoria Metro Shopping Fund Limited Partnership St. David's Limited Partnership Westgate Oxford Alliance Partnership The Oriana Limited Partnership Individually material JVs at Other Total
LS's share
Income statement 100% 100% 100% 100% 100% 100% 50% LS share LS share
£m £m £m £m £m £m £m £m £m
Revenue(1) 23.2 0.8 10.2 21.6 1.2 - 28.5 3.2 31.7
Gross rental income (after rents payable) 19.0 0.8 8.6 17.4 1.2 - 23.5 0.8 24.3
Net rental income 17.8 0.6 7.8 14.0 0.8 - 20.5 1.1 21.6
Segment profit before interest 17.4 0.4 7.6 13.4 0.8 - 19.8 1.0 20.8
Interest expense (10.4) (17.8) (3.6) - (5.2) - (18.5) - (18.5)
Capitalised interest - 16.8 - - 4.6 - 10.7 - 10.7
Net interest expense (10.4) (1.0) (3.6) - (0.6) - (7.8) - (7.8)
Revenue profit 7.0 (0.6) 4.0 13.4 0.2 - 12.0 1.0 13.0
Capital and other items
Net surplus/(deficit) on revaluation of investment properties (15.6) 72.6 (0.8) (15.0) 0.4 (4.2) 18.7 (0.9) 17.8
Profit on disposal of investment properties - - 1.2 - - 2.8 2.0 - 2.0
Adjustment for non-wholly owned subsidiary(2) - - - - - - - 0.1 0.1
Profit/(loss) before tax (8.6) 72.0 4.4 (1.6) 0.6 (1.4) 32.7 0.2 32.9
Taxation - - - - - - - - -
Post-tax profit/(loss) (8.6) 72.0 4.4 (1.6) 0.6 (1.4) 32.7 0.2 32.9
Other comprehensive income - - (0.4) - - - (0.2) - (0.2)
Total comprehensive income (8.6) 72.0 4.0 (1.6) 0.6 (1.4) 32.5 0.2 32.7
50.0% 50.0% 50.0% 50.0% 50.0% 50.0%
Land Securities' share of total comprehensive income (4.3) 36.0 2.0 (0.8) 0.3 (0.7) 32.5 0.2 32.7
1. Revenue includes gross rental income (before rents payable), service charge income, other property related income and
trading properties disposal proceeds.
2. The adjustment represents the non-owned element of a Group subsidiary's investment in a joint venture which is
excluded from revenue profit and the 'Net surplus/(deficit) on revaluation of investment properties' shown in this note.
Six months ended 30 September 2015
Joint ventures 20 Fenchurch Street Limited Partnership Nova, Metro Shopping Fund Limited Partnership St. David's Limited Partnership Westgate Oxford Alliance Partnership The Oriana Limited Partnership Individually material Other Total
Victoria JVs at
LS's share
Income statement 100% 100% 100% 100% 100% 100% 50% LS share LS share
£m £m £m £m £m £m £m £m £m
Revenue(1) 21.4 - 9.0 21.2 1.6 1.4 27.3 2.0 29.3
Gross rental income (after rents payable) 17.4 - 7.2 17.6 1.2 1.2 22.3 1.8 24.1
Net rental income/(expense) 16.4 (0.6) 6.8 14.0 0.8 1.2 19.3 1.8 21.1
Segment profit/(loss) before interest 16.0 (0.8) 6.8 13.4 0.6 1.2 18.6 1.7 20.3
Interest (expense)/income (15.8) (12.8) (3.4) - (2.6) - (17.3) 0.1 (17.2)
Capitalised interest - 12.8 0.2 - 2.4 0.6 8.0 - 8.0
Net interest (expense)/income (15.8) - (3.2) - (0.2) 0.6 (9.3) 0.1 (9.2)
Revenue profit 0.2 (0.8) 3.6 13.4 0.4 1.8 9.3 1.8 11.1
Capital and other items
Net surplus on revaluation of investment properties 89.4 16.2 52.2 62.2 10.0 18.2 124.1 1.6 125.7
Impairment of trading properties - - - - - - - 4.4 4.4
Profit on disposal of investment properties 1.2 - - - - 4.4 2.8 1.2 4.0
Impairment of long-term development contracts - - - - - - - (0.1) (0.1)
Profit before tax 90.8 15.4 55.8 75.6 10.4 24.4 136.2 8.9 145.1
Taxation - - - - - - - (0.2) (0.2)
Post-tax profit 90.8 15.4 55.8 75.6 10.4 24.4 136.2 8.7 144.9
Other comprehensive income - - 0.6 - - - 0.3 - 0.3
Total comprehensive income 90.8 15.4 56.4
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