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REG - Land Sec. Group PLC - Preliminary Results to 31 March 2017 <Origin Href="QuoteRef">LAND.L</Origin> - Part 6

- Part 6: For the preceding part double click  ID:nRSR4610Fe 

          
 Finance income                                       35                        -                   -                       35                          35           -                          
 Finance expense                                      (244)                     (21)                -                       (265)                       (199)        (66)                       
 Share of profit from joint ventures                  199                       (199)               -                       -                           -            -                          
 Profit before tax                                    1,336                     -                   -                       1,336                       362          974                        
 Taxation                                             2                         -                   -                       2                           -            2                          
 Profit attributable to owners of the parent          1,338                     -                   -                       1,338                       362          976                        
 
 
1.    Reallocation of the share of post-tax profit from joint ventures reported in the Group income statement to the
individual line items reported in the segmental information note. 
 
2.    Removal of the non-wholly owned share of results of the Group's subsidiaries. The non-wholly owned subsidiaries are
consolidated at 100% in the Group's income statement, but only the Group's share is included in revenue profit reported in
the segmental information note. 
 
Table 26: Acquisitions, disposals and capital expenditure 
 
                                                                Year ended 31 March 2017        Year ended 31 March 2016  
                                                                Group (excl. joint ventures)£m  Joint ventures£m          Adjustment for proportionate share£m  Combined Portfolio£m  Combined Portfolio£m  
 Investment properties                                                                                                                                                                                      
 Net book value at the beginning of the year                    12,358                          1,630                     (34)                                  13,954                13,529                
 Acquisitions                                                   14                              1                         -                                     15                    123                   
 Capital expenditure                                            126                             114                       -                                     240                   312                   
 Capitalised interest                                           5                               13                        -                                     18                    23                    
 Disposals                                                      (205)                           (39)                      -                                     (244)                 (940)                 
 Net movement in finance leases                                 32                              9                         1                                     42                    -                     
 Transfer to trading properties                                 -                               (5)                       -                                     (5)                   -                     
 Net (deficit)/surplus on revaluation of investment properties  (186)                           40                        (1)                                   (147)                 907                   
 Net book value at the end of the year                          12,144                          1,763                     (34)                                  13,873                13,954                
                                                                                                                                                                                                            
 Profit on disposal of investment properties                    19                              1                         -                                     20                    79                    
                                                                                                                                                                                                            
                                                                                                                                                                                                            
 Trading properties                                                                                                                                                                                         
 Net book value at the beginning of the year                    124                             157                       -                                     281                   337                   
 Capital expenditure                                            19                              27                        -                                     46                    61                    
 Capitalised interest                                           -                               5                         -                                     5                     6                     
 Disposals                                                      (33)                            (68)                      -                                     (101)                 (140)                 
 Transfer from investment properties                            -                               5                         -                                     5                     -                     
 Movement in impairment                                         12                              -                         -                                     12                    16                    
 Net book value at the end of the year                          122                             126                       -                                     248                   280                   
                                                                                                                                                                                                            
 Profit on disposal of trading properties                       29                              7                         -                                     36                    41                    
                                                                                                                                                                                                            
                                                                                                                                                                                                            
 Investment in joint ventures                                                                                                                                                                               
 Loss on disposal of investment in joint venture                (2)                             -                         -                                     (2)                   -                     
                                                                                                                                                                                                            
                                                                                                                                                                                                            
 Other investments                                                                                                                                                                                          
 Profit on disposal of other investment                         13                              -                         -                                     13                    -                     
 
 
 Acquisitions, development and refurbishment expenditure  £m   £m     
 Acquisitions of investment property                      15   123    
 Capital expenditure -  investment property               81   160    
 Development capital expenditure - investment properties  159  152    
 Capital expenditure - trading properties                 19   51     
 Development capital expenditure -  trading property      27   10     
 Acquisitions, development and refurbishment expenditure  301  496    
                                                                      
                                                                      
 Disposals                                                £m   £m     
 Net book value - investment property disposals           244  940    
 Net book value - trading property disposals              101  140    
 Profit on disposal - investment property                 20   79     
 Profit on disposal - trading property                    36   41     
 Loss on disposal - investment in joint venture           (2)  -      
 Profit on disposal - other investment                    13   -      
 Disposal of asset held for sale                          -    283    
 Other                                                    1    10     
 Total disposal proceeds                                  413  1,493  
 
 
Investor information 
 
1. Company website: www.landsecurities.com 
 
The Group's half-yearly and annual reports to shareholders, and results announcements and presentations, are available to
view and download from the Company's website. The website also provides details of the Company's current share price, the
latest news about the Group, its properties and operations, and details of future events and how to obtain further
information. 
 
2. Registrar: Equiniti Group PLC 
 
Enquiries concerning shareholdings, dividends and changes in personal details should be referred to the Company's
registrar, Equiniti Group PLC (Equiniti), in the first instance. They can be contacted using the details below: 
 
Telephone: 
 
0371 384 2128 (from the UK) 
 
+44 121 415 7049 (from outside the UK) 
 
Lines are open from 08:30 to 17:30, Monday to Friday, excluding UK public holidays 
 
Correspondence address: 
 
Equiniti Group PLC 
 
Aspect House 
 
Spenser Road 
 
Lancing 
 
West Sussex 
 
BN99 6DA 
 
Information on how to manage your shareholding can be found at https://help.shareview.co.uk. If you are not able to find
the answer to your question within the general Help information page, a personal enquiry can be sent directly through
Equiniti's secure e-form on their website. Please note that you will be asked to provide your name, address, shareholder
reference number and a valid e-mail address. Alternatively, shareholders can view and manage their shareholding through the
Land Securities share portal which is hosted by Equiniti - simply visit https://portfolio.shareview.co.uk and follow the
registration instructions. 
 
3. Shareholder enquiries 
 
If you have an enquiry about the Company's business or about something affecting you as a shareholder (other than queries
which are dealt with by the Registrar), please email Investor Relations (see details in 8. below). 
 
4. Share dealing services: www.shareview.co.uk 
 
The Company's shares can be traded through most banks, building societies and stockbrokers. They can also be traded through
Equiniti. To use their service, shareholders should contact Equiniti: 0345 603 7037 from the UK. Lines are open Monday to
Friday 08:30 to17:30, excluding UK public holidays. 
 
5. 2016/17 final dividend 
 
The Board has recommended a final dividend for the year ended 31 March 2017 of 11.7p per ordinary share to be paid as a
Property Income Distribution (PID). Subject to shareholders' approval at the Annual General Meeting, the final dividend
will be paid on 27 July 2017 to shareholders registered at the close of business on 23 June 2017. The total dividend paid
and payable in respect of the year ended 31 March 2017 is 38.55p (2016: 35.0p). The first quarterly dividend for the year
ended 31 March 2018 will be 9.85p. It will be paid entirely as a PID on 6 October 2017, to shareholders on the register at
the close of business on 8 September 2017. 
 
6. Dividend related services 
 
Dividend payments to UK shareholders - Dividend Mandates 
 
We recommend that dividends are paid directly into a nominated bank or building society account through the Bankers
Automated Clearing System (BACS). This service provides cleared funds on the dividend payment date, is more secure than
sending a cheque by post and avoids the inconvenience of paying each dividend by cheque. This arrangement is only available
in respect of dividends paid in sterling. 
 
Dividend payments to overseas shareholders - International Payment Service 
 
For international shareholders who would prefer to receive payment of their dividends in local currency and directly into
their local bank account, an Overseas Payment Service (OPS) is available. This can be more convenient and effective than
otherwise receiving dividend payments by sterling cheque or into a UK bank account. 
 
The OPS service is available from Equiniti who, in partnership with Citibank, may be able to convert sterling dividends
into your local currency at competitive rates and either arrange for those funds to be sent to you by currency draft or
credited to your bank account directly. 
 
Dividend Reinvestment Plan (DRIP) 
 
A DRIP is available from Equiniti. This facility provides an opportunity by which shareholders can conveniently and easily
increase their holding in the Company by using their cash dividends to buy more shares. Participation in the DRIP will mean
that your dividend payments will be reinvested in the Company's shares and these will be purchased on your behalf in the
market on, or as soon as practical after, the dividend payment date. 
 
You may only participate in the DRIP if you are resident in the European Economic Area, Channel Islands or Isle of Man. 
 
For further information (including terms and conditions) and to register for any of these dividend-related services, simply
visit www.shareview.co.uk. 
 
7. Financial reporting calendar 
 
                                                      2017         
 Annual Report and AGM Notice mailed to shareholders  12 June      
 Annual General Meeting                               13 July      
 Half-yearly results announcement                     14 November  
                                                                   
                                                      2018         
 Financial year end                                   31 March     
 Preliminary results announcement                     15 May*      
 
 
* Provisional date only 
 
8. Investor relations enquiries 
 
For investor relations enquiries, please contact Edward Thacker, Head of Investor Relations at Land Securities, by
telephone on +44 (0)20 7413 9000 or by email at investor.relations@landsecurities.com. 
 
Glossary 
 
Adjusted earnings per share (Adjusted EPS) 
 
Earnings per share based on revenue profit after related tax. 
 
Adjusted net assets per share 
 
Net assets per share adjusted to remove the effect of the de-recognition of the 2004 bond exchange and cumulative fair
value movements on interest-rate swaps and similar instruments. 
 
Adjusted net debt 
 
Net debt excluding cumulative fair value movements on interest-rate swaps, the adjustment arising from the de-recognition
of the bond exchange and amounts payable under finance leases. It generally includes the net debt of subsidiaries and joint
ventures on a proportionate basis. 
 
Book value 
 
The amount at which assets and liabilities are reported in the financial statements. 
 
BREEAM 
 
Building Research Establishment's Environmental Assessment Method. 
 
Combined Portfolio 
 
The Combined Portfolio comprises the investment properties of the Group's subsidiaries, on a proportionately consolidated
basis when not wholly owned, together with our share of investment properties held in our joint ventures. 
 
Completed developments 
 
Completed developments consist of those properties previously included in the development programme, which have been
transferred from the development programme since 1 April 2015. 
 
Development pipeline 
 
The development programme together with proposed developments. 
 
Development programme 
 
The development programme consists of committed developments (Board approved projects with the building contract let),
authorised developments (Board approved), projects under construction and developments which have reached practical
completion within the last two years but are not yet 95% let. 
 
Diluted figures 
 
Reported results adjusted to include the effects of potentially dilutive shares issuable under employee share schemes. 
 
Dividend Reinvestment Plan (DRIP) 
 
The DRIP provides shareholders with the opportunity to use cash dividends received to purchase additional ordinary shares
in the Company immediately after the relevant dividend payment date. Full details appear on the Company's website. 
 
Earnings per share 
 
Profit after taxation attributable to owners of the parent divided by the weighted average number of ordinary shares in
issue during the year. 
 
EPRA 
 
European Public Real Estate Association. 
 
EPRA net initial yield 
 
EPRA net initial yield is defined within EPRA's Best Practice Recommendations as the annualised rental income based on the
cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the gross market
value of the property. It is consistent with the net initial yield calculated by the Group's external valuer. 
 
Equivalent yield 
 
Calculated by the Group's external valuer, equivalent yield is the internal rate of return from an investment property,
based on the gross outlays for the purchase of a property (including purchase costs), reflecting reversions to current
market rent and such items as voids and non-recoverable expenditure but ignoring future changes in capital value. The
calculation assumes rent is received annually in arrears. 
 
ERV - Gross estimated rental value 
 
The estimated market rental value of lettable space as determined biannually by the Group's external valuer. For investment
properties in the development programme, which have not yet reached practical completion, the ERV represents management's
view of market rents. 
 
Fair value movement 
 
An accounting adjustment to change the book value of an asset or liability to its market value (see also mark-to-market
adjustment). 
 
Finance lease 
 
A lease that transfers substantially all the risks and rewards of ownership from the lessor to the lessee. 
 
Gearing 
 
Total borrowings, including bank overdrafts, less short-term deposits, corporate bonds and cash, at book value, plus
cumulative fair value movements on financial derivatives as a percentage of total equity. For adjusted gearing, see note
12. 
 
Gross market value 
 
Market value plus assumed usual purchaser's costs at the reporting date. 
 
Head lease 
 
A lease under which the Group holds an investment property. 
 
Interest Cover Ratio (ICR) 
 
A calculation of a company's ability to meet its interest payments on outstanding debt. It is calculated using revenue
profit before interest, divided by net interest (excluding the mark-to-market movement on interest-rate swaps, foreign
exchange swaps, bond exchange de-recognition, capitalised interest and interest on the pension scheme assets and
liabilities). The calculation excludes joint ventures. 
 
IPD 
 
Refers to the MSCI IPD Direct Property indexes which measure property level investment returns in the UK. 
 
Interest-rate swap 
 
A financial instrument where two parties agree to exchange an interest rate obligation for a predetermined amount of time.
These are generally used by the Group to convert floating-rate debt or investments to fixed rates. 
 
Investment portfolio 
 
The investment portfolio comprises the investment properties of the Group's subsidiaries, on a proportionately consolidated
basis where not wholly owned. 
 
Joint venture 
 
An arrangement in which the Group holds an interest and which is jointly controlled by the Group and one or more partners
under a contractual arrangement. Decisions on the activities of the joint venture that significantly affect the joint
venture's' returns, including decisions on financial and operating policies and the performance and financial position of
the operation, require the unanimous consent of the partners sharing control. 
 
Lease incentives 
 
Any incentive offered to occupiers to enter into a lease. Typically, the incentive will be an initial rent-free period, or
a cash contribution to fit-out or similar costs. For accounting purposes the value of the incentive is spread over the
non-cancellable life of the lease. 
 
LIBOR 
 
The London Interbank Offered Rate, the interest rate charged by one bank to another for lending money, often used as a
reference rate in bank facilities. 
 
Like-for-like portfolio 
 
The like-for-like portfolio includes all properties which have been in the portfolio since 1 April 2015, but excluding
those which are acquired, sold or included in the development pipeline at any time since that date. 
 
Loan-to-value (LTV) 
 
Group LTV is the ratio of adjusted net debt, including subsidiaries and joint ventures, to the sum of the market value of
investment properties and the book value of trading properties of the Group, its subsidiaries and joint ventures, all on a
proportionate basis, expressed as a percentage. For the Security Group, LTV is the ratio of net debt lent to the Security
Group divided by the value of secured assets. 
 
Market value 
 
Market value is determined by the Group's external valuer, in accordance with the RICS Valuation Standards, as an opinion
of the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing
seller in an arm's-length transaction after proper marketing. 
 
Mark-to-market adjustment 
 
An accounting adjustment to change the book value of an asset or liability to its market value (see also fair value
movement). 
 
Net assets per share 
 
Equity attributable to owners of the parent divided by the number of ordinary shares in issue at the year end. Net assets
per share is also commonly known as net asset value per share (NAV per share). 
 
Net initial yield 
 
Net initial yield is a calculation by the Group's external valuer of the yield that would be received by a purchaser, based
on the Estimated Net Rental Income expressed as a percentage of the acquisition cost, being the market value plus assumed
usual purchasers' costs at the reporting date. The calculation is in line with EPRA guidance. Estimated Net Rental Income
is determined by the valuer and is based on the passing cash rent less ground rent at the balance sheet date, estimated
non-recoverable outgoings and void costs including service charges, insurance costs and void rates. 
 
Net rental income 
 
Net rental income is the net operational income arising from properties, on an accruals basis, including rental income,
finance lease interest, rents payable, service charge income and expense, other property related income, direct property
expenditure and bad debts. Net rental income is presented on a proportionate basis. 
 
Over-rented 
 
Space where the passing rent is above the ERV. 
 
Passing cash rent 
 
The estimated annual rent receivable as at the reporting date which includes estimates of turnover rent and estimates of
rent to be agreed in respect of outstanding rent review or lease renewal negotiations. Passing cash rent may be more or
less than the ERV (see over-rented, reversionary and ERV). Passing cash rent excludes annual rent receivable from units in
administration save to the extent that rents are expected to be received. Void units and units that are in a rent-free
period at the reporting date are deemed to have no passing cash rent. Although temporary lets of less than 12 months are
treated as void, income from temporary lets is included in passing cash rents. 
 
Planning permission 
 
There are two common types of planning permission: full planning permission and outline planning permission. A full
planning permission results in a decision on the detailed proposals on how the site can be developed. The grant of a full
planning permission will, subject to satisfaction of any conditions, mean no further engagement with the local planning
authority will be required to build the consented development. An outline planning permission approves general principles
of how a site can be developed. Outline planning permission is granted subject to conditions known as 'reserved matters'.
Consent must be sought and achieved for discharge of all reserved matters within a specified time-limit, normally three
years from the date outline planning permission was granted, before building can begin. In both the case of full and
outline planning permission, the local planning authority will 'resolve to grant permission'. At this stage, the planning
permission is granted subject to agreement of legal documents, in particular the s106 agreement. On execution of the s106
agreement, the planning permission will be issued. Work can begin on satisfaction of any 'pre-commencement' planning
conditions. 
 
Pre-let 
 
A lease signed with an occupier prior to completion of a development. 
 
Pre-development properties 
 
Pre-development properties are those properties within the like-for-like portfolio which are being managed to align vacant
possession within a three year horizon with a view to redevelopment. 
 
Property Income Distribution (PID) 
 
A PID is a distribution by a REIT to its shareholders paid out of qualifying profits. A REIT is required to distribute at
least 90% of its qualifying profits as a PID to its shareholders. 
 
Proposed developments 
 
Proposed developments are properties which have not yet received final Board approval or are still subject to main planning
conditions being satisfied, but which are more likely to proceed than not. 
 
Qualifying activities/ Qualifying assets 
 
The ownership (activity) of property (assets) which is held to earn rental income and qualifies for tax-exempt treatment
(income and capital gains) under UK REIT legislation. 
 
Real Estate Investment Trust (REIT) 
 
A REIT must be a publicly quoted company with at least three-quarters of its profits and assets derived from a qualifying
property rental business. Income and capital gains from the property rental business are exempt from tax but the REIT is
required to distribute at least 90% of those profits to shareholders. Corporation tax is payable on non-qualifying
activities in the normal way. 
 
Rental value change 
 
Increase or decrease in the current rental value, as determined by the Group's external valuer, over the reporting period
on a like-for-like basis. 
 
Rental income 
 
Rental income is as reported in the income statement, on an accruals basis, and adjusted for the spreading of lease
incentives over the term certain of the lease in accordance with SIC 15. It is stated gross, prior to the deduction of
ground rents and without deduction for operational outgoings on car park and commercialisation activities. 
 
Return on average capital employed 
 
Group profit before net finance expense, plus joint venture profit before net finance expense, divided by the average
capital employed (defined as shareholders' funds plus adjusted net debt). 
 
Return on average equity 
 
Group profit before tax plus joint venture tax divided by the average equity shareholders' funds. 
 
Revenue profit 
 
Profit before tax, excluding profits on the sale of non-current assets and trading properties, profits on long-term
development contracts, valuation movements, fair value movements on interest-rate swaps and similar instruments used for
hedging purposes, the adjustment to finance expense resulting from the amortisation of the bond exchange de-recognition
adjustment, debt restructuring charges, and any other items of an exceptional nature. 
 
Reversionary or under-rented 
 
Space where the passing rent is below the ERV. 
 
Reversionary yield 
 
The anticipated yield to which the initial yield will rise (or fall) once the rent reaches the ERV. 
 
Scrip dividend 
 
A scrip dividend is when shareholders are offered the opportunity to receive dividends in the form of shares instead of
cash. 
 
Security Group 
 
Security Group is the principal funding vehicle for the Group and properties held in the Security Group are mortgaged for
the benefit of lenders. It has the flexibility to raise a variety of different forms of finance. 
 
Temporary lettings 
 
Lettings for a period of one year or less. These are included within voids. 
 
Topped-up net initial yield 
 
Topped-up net initial yield is a calculation by the Group's external valuer. It is calculated by making an adjustment to
net initial yield in respect of the annualised cash rent foregone through unexpired rent-free periods and other lease
incentives. The calculation is consistent with EPRA guidance. 
 
Total business return 
 
Dividend paid per share in the year plus the change in adjusted diluted net assets per share, divided by adjusted diluted
net assets per share at the beginning of the year. 
 
Total cost ratio 
 
Total cost ratio represents all costs included within revenue profit, other than rents payable and financing costs,
expressed as a percentage of gross rental income before rents payable. 
 
Total development cost (TDC) 
 
Total development cost refers to the book value of the site at the commencement of the project, the estimated capital
expenditure required to develop the scheme from the start of the financial year in which the property is added to our
development programme, together with capitalised interest, being the Group's borrowing costs associated with direct
expenditure on the property under development. Interest is also capitalised on the purchase cost of land or property where
it is acquired specifically for redevelopment. The TDC for trading property development schemes excludes any estimated tax
on disposal. 
 
Total property return 
 
Valuation movement, profit/loss on property sales and net rental income in respect of investment properties expressed as a
percentage of opening book value, together with the time weighted value for capital expenditure incurred during the current
period, on the combined property portfolio. 
 
Total Shareholder Return (TSR) 
 
The growth in value of a shareholding over a specified period, assuming that dividends are reinvested to purchase
additional units of the stock. 
 
Trading properties 
 
Properties held for trading purposes and shown as current assets in the balance sheet. 
 
Turnover rent 
 
Rental income which is related to an occupier's turnover. 
 
Valuation surplus/deficit 
 
The valuation surplus/deficit represents the increase or decrease in the market value of the Combined Portfolio, adjusted
for net investment. The market value of the Combined Portfolio is determined by the Group's external valuer. 
 
Voids 
 
Voids are expressed as a percentage of ERV and represent all unlet space, including voids where refurbishment work is being
carried out and voids in respect of pre-development properties. Temporary lettings for a period of one year or less are
also treated as voids. 
 
Weighted average cost of capital (WACC) 
 
Weighted average cost of debt and notional cost of equity, used as a benchmark to assess investment returns. 
 
Weighted average unexpired lease term 
 
The weighted average of the unexpired term of all leases other than short-term lettings such as car parks and advertising
hoardings, temporary lettings of less than one year, residential leases and long ground leases. 
 
Yield shift 
 
A movement (negative or positive) in the equivalent yield of a property asset. 
 
Zone A 
 
A means of analysing and comparing the rental value of retail space by dividing it into zones parallel with the main
frontage. The most valuable zone, Zone A, is at the front of the unit. Each successive zone is valued at half the rate of
the zone in front of it. 
 
This information is provided by RNS
The company news service from the London Stock Exchange

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