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Land Securities announces preliminary results for the year ended 31 March 2017

18 May 2017

“Land Securities has delivered a healthy performance driven by a clear strategy and decisive action. Revenue profit is up due to new rents from our successful development programme and reduced interest costs outweighing the impact of last year’s disposals. Our levels of financial and operational gearing are at historic lows, placing us in an excellent position during a period of geopolitical and economic uncertainty”, said Land Securities’ Chief Executive, Robert Noel. 

“Revenue profit increased by 5.5% to £382m, and adjusted diluted earnings per share by 5.7% to 48.3p, while adjusted diluted NAV per share is down marginally over the year at 1,417p. We’ve continued to proactively manage both sides of our balance sheet; this year, we’ve refinanced over £690m of our bonds and extended the term of our debt with the issue of £700m of new bonds. Our LTV remains virtually unchanged at 22.2%. Since the year end, we have refinanced a further £273m of bond debt. 

“In London, we’ve completed the 3.1 million sq ft speculative development programme commenced in 2010 and have our longest ever average unexpired lease term, as planned. We now have just 283,000 sq ft available to let. The majority of this space is in Nova, a spectacular new addition to Victoria, which completed last month and is now 54% let. We have a 1.4 million sq ft pipeline of future development opportunities to exploit when the time is right. 

“In Retail, the transformational changes we’ve made over the last few years have led to a particularly strong performance relative to the sector. Westgate Oxford is 80% pre-let or in solicitors’ hands and on track to open in October, delivering an eagerly anticipated retail heart for the city. In Leeds, our leisure extension at White Rose reached practical completion in March and is fully let. Since the year end, we’ve acquired a portfolio of three outlet centres for £333m, establishing our position as the leading owner-manager of outlets in the UK. 

“The success of our development programme, combined with the interest savings we have achieved, sees us recommend a final dividend of 11.7p which increases the dividend for the year by 10.1%. 

“Our strategy has put us in robust health, with significant capacity and agility to make acquisitions when the time is right. We’re confidently positioned for the future.” 

Results summary 

  31 March 2017 31 March 2016 Change
Revenue profit (1)(2) £382m £362m Up 5.5%
Valuation (deficit)/surplus (1)(2) £(147)m £907m Down 1.0%
Profit before tax £112m £1,336m  
Basic earnings per share 14.3p 169.4p  
Adjusted diluted earnings per share (1)(2) 48.3p 45.7p Up 5.7%
Dividend per share 38.55p 35.0p Up 10.1%
Basic net assets per share 1,458p 1,482p Down 1.6%
Adjusted diluted net assets per share (1) 1,417p 1,434p Down 1.2%
Group LTV ratio (1)(2) 22.2% 22.0%  

(1) An alternative performance measure. The Group uses a number of financial measures to assess and explain its performance, some of which are considered to be alternative performance measures as they are not defined under IFRS. For further details, see table 15 in the Business Analysis section in the full RNS announcement.

(2) Including our proportionate share of subsidiaries and joint ventures, as explained in the Financial Review in the full RNS announcement.

(3) The % change for the valuation deficit represents the decrease in value of the Combined Portfolio over the year, adjusted for net investment.

Activity

- £28m of investment lettings

- £13m of development lettings

- Acquisitions, development and refurbishment expenditure(1) of £301m

- Disposals (1) of £413m

- Supported a further 183 people from disadvantaged backgrounds into jobs through our Community Employment Programme

- Reduced carbon intensity (kgCO2/m2) by 18.5% compared to 2013/14 baseline

Performance

- Ungeared total property return(1) of 3.7% (IPD Quarterly Universe 4.6%)

- Total business return(2) of 1.4%

- Combined Portfolio(2) valued at £14.4bn, with a valuation deficit(2) of 1.0%

- Voids(1) in the like-for-like portfolio: 4.6% (31 March 2016: 2.4%)

Financials

- Group LTV ratio(2) at 22.2% (31 March 2016: 22.0%), based on adjusted net debt(2) of £3.3bn (31 March 2016: £3.2bn)

- Weighted average maturity of debt at 9.4 years (31 March 2016: 9.6 years)

- Weighted average cost of debt at 4.2% (31 March 2016: 4.9%)

- Cash and available facilities of £1.6bn

- Full year dividend of 38.55p, up 10.1%

Development

- 1 & 2 New Ludgate, EC4 now fully let

- 20 Eastbourne Terrace, W2 now completed and fully let

- 1 New Street Square, EC4 now completed and fully let

- Nova, Victoria, SW1, now completed and 54% let

- Westgate Oxford on track to open in October, now 80% pre-let or in solicitors’ hands

- 21 Moorfields, EC2 demolition complete and ground works starting in the summer Recognition

- Winner: Most Inspiring Energy Reduction Project at the Energy Management Awards 2016 (London Portfolio)

- Winner: RICS Best Commercial Building Award 2016 (1 & 2 New Ludgate, EC4)

- Winner: Property Marketing Commercial Development of the Year Award 2016 (The Zig Zag Building, SW1)

- Winner: BREEAM Offices Refurbishment and Fit-Out Awards 2017 (100 Victoria Street, SW1)

- Winner: Revo Opal Best Mall Retail Award 2017 (White Rose, Leeds)

- Winner: Aurora Grand Prix Award 2017 (Buchanan Galleries, Glasgow)

(1) For further details, see the Business Analysis section in the full RNS announcement.

(2) An alternative performance measure. The Group uses a number of financial measures to assess and explain its performance, some of which are considered to be alternative performance measures as they are not defined under IFRS. For further details, see table 15 in the Business Analysis section in the full RNS announcement.

All measures above are presented on a proportionate basis, as explained in the Financial Review in the full RNS announcement.

-Ends-

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