TOP NEWS: British Land Swings To Loss On Property Valuation Deficit

LONDON (Alliance News) - The British Land Co PLC said Wednesday it swung to a loss for its ...

Alliance News 15 May, 2019 | 8:31AM
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LONDON (Alliance News) - The British Land Co PLC said Wednesday it swung to a loss for its recently ended financial year, due to a loss on property valuation movements despite strong revenue growth.

For the year to the end of March, the blue-chip real estate investment trust reported a pretax loss of GBP319 million, swinging sharply from a profit of GBP501 million the year before.

This was after recording a GBP620 million loss from the revaluation of properties, compared to a GBP202 million gain the prior year.

Underlying profit dropped 11% to GBP340 million from GBP380 million. Underlying profit adjusts for property revaluations, gains and losses on investment and trading property disposals, and changes in the fair value of financial instruments and associated close out costs.

This figure was still above consensus expectations of GBP330 million for the year.

Net rental income for the year dropped to GBP532 million from GBP576 million the prior year, however proceeds of GBP350 million from the sale of trading properties helped revenue grow to GBP904 million from GBP639 million.

EPRA net asset value per share as at Match 31 decreased by 6.7% to 905 pence from 967p the year before, reflecting a portfolio valuation drop of 4.8% to GBP13.72 billion from GBP12.32 billion.

Within the portfolio, Office values rose by 1.1%, developments by 11%, while values in Retail fell by 11%, as British Land continues to reduce its exposure to the sector.

Since April 2018, GBP646 million in off-strategy assets have been sold.

Also in line with expectations, British Land declared a final dividend of 7.75 pence, bringing to total payout to 31.00p, up 3.0% from 30.08p the prior year. For the year ahead, the group has proposed to increase its full-year dividend by another 3.0%.

"This has been another year of good strategic and operational progress in an uneven market, as retail remained challenging but the London office market continued to be healthy. We delivered further on our strategy to build an increasingly mixed-use business by investing in our campuses, progressing developments and reshaping our retail portfolio," said Chief Executive Chris Grigg.

"Looking ahead, retail is likely to remain challenging as structural change continues but there are early signs on parts of our portfolio, that some of the short-term operational headwinds impacting retailers are easing. We expect the London market to remain active, as occupier demand for the highest quality space continues to be firm and supply is relatively constrained," Grigg added.

Shares in British Land were down 0.2% at 559.40 pence on Wednesday.

By Dayo Laniyan; dayolaniyan@alliancenews.com

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
British Land Co PLC 536.60 GBX -0.78 -
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