(Alliance News) - British Land returned to the dividend list on Wednesday with a reduced interim payout, saying it is seeing positive signs in the commercial property market in London.
The FTSE 100 real estate developer posted a widened pretax loss of GBP757 million for the half-year to September 30, versus GBP440 million a year ago. EPRA net tangible assets fell 10% to 693p at September 30 from 773p at March 31.
More positively, the company confirmed it will be resuming dividend payments with an interim payout of 8.4p, down from 15.97p a year before. British Land back in March decided to suspend dividend payments, given the uncertain outlook, but said it has been "reassured" by the productivity of its assets when restrictions were relaxed.
British Land said it had resumed dividend payments on the basis of a fixed percentage payout of underlying earnings. Underlying earnings per share declined 35% to 10.5p in the first half from 16.1p a year before. Underlying profit fell 30% to GBP107 million from GBP152 million.
"Our first half results naturally reflect the challenges in retail. Against this backdrop, we remain focused on active asset management, working to maximise rent collection and keeping our units occupied with successful retailers. There is a clear preference from shoppers and retailers for out of town, open air retail parks. Our approach and attractive asset mix means that prior to the November lockdown, we were delivering significant outperformance on footfall and retailer sales and a steady improvement in rent collection levels," said Simon Carter, the incoming chief executive.
Carter was promoted from chief financial officer, effective from Wednesday, replacing Chris Gregg as CEO.
Carter added: "Investors are increasingly taking a similar long term perspective, looking through Covid, to acquire prime London offices at pricing close to pre-pandemic levels."
British Land also said it has completed on the sale of Clarges Mayfair to Deka for GBP177 million. The sale price of the mixed-use development was 7.6% above the September valuation.
British Land shares were down 4.1% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 6,334.58
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Hang Seng: up 0.4% at 26,516.49
Nikkei 225: closed down 1.1% at 25,728.14
DJIA: closed down 167.09 points, 0.6%, at 29,783.35
S&P 500: closed down 0.5% at 3,609.53
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GBP: up at USD1.3277 (USD1.3254)
EUR: up at USD1.1885 (USD1.1866)
Gold: down at USD1,881.76 per ounce (USD1,887.43)
Oil (Brent): up at USD43.95 a barrel (USD43.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0930 GMT UK house price index
1100 CET EU consumer price index
0700 EST US MBA weekly mortgage applications survey
0830 EST US housing starts and building permits
1000 EST US advance quarterly services
1030 EST US EIA weekly petroleum status report
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The annual rate of UK consumer price inflation accelerated by more than expected in October, figures from the Office for National Statistics showed. Inflation edged up to 0.7% in October from a rate of 0.5% in September. This was higher than market forecasts, according to FXStreet, of 0.6% annual inflation. On a month-on-month basis, prices were flat in October after growth of 0.4% in September. This was still, though, better than expectations of a 0.1% fall. Separately, the ONS showed producer price trends improved last month. Output prices for factory goods fell 1.4% year-on-year in October, improved from a fall of 1.7% in September. Input prices, meanwhile, fell 1.3%, another improvement from September's reading, which had seen prices decline 2.2%.
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Britain will ban petrol and diesel vehicle sales from 2030 as part of a 10-point plan for a "green industrial revolution" to be unveiled Wednesday by UK Prime Minister Boris Johnson. The PM has earmarked GBP12 billion for the wide-ranging plans, which he hopes will secure up to 250,000 jobs and help meet a target for the UK to become carbon neutral by 2050. The proposals include quadrupling offshore wind power within a decade while scaling up hydrogen production capacity for industry, transport, power and homes. Investment will also be made in zero-emission public transport, alongside research into zero-emission planes and ships, and in making cycling and walking "more attractive". The plans contain broader aims to make Britain a "world-leader" in carbon capture technology and the City of London a "global centre of green finance".
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BROKER RATING CHANGES
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DEUTSCHE BANK REINITIATES CRH WITH 'BUY' - PRICE TARGET 39 EUR
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GOLDMAN SACHS CUTS COMPASS GROUP TO 'NEUTRAL' ('BUY') - TARGET 1380 PENCE
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BARCLAYS RAISES VIRGIN MONEY TO 'OVERWEIGHT' (UNDERWEIGHT) - TARGET 165 (100) PENCE
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BERENBERG RAISES RATHBONE BROS TO 'BUY' ('HOLD') - TARGET 1850 (1350) PENCE
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PEEL HUNT RAISES GRAFTON GROUP TO 'BUY' ('ADD') - TARGET 950 (840) PENCE
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COMPANIES - FTSE 100
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RSA Insurance said it has reached agreement with Intact and Tryg on a takeover offer valuing the London-listed insurer at GBP7.2 billion that was first announced earlier this month. Under the deal, RSA shareholders will receive 685 pence in cash for each share, the same amount proposed earlier in November. In addition, RSA shareholders will be entitled to receive the insurer's interim dividend of 8p. The price represents a premium of 51% to November 4's closing price in London, being the day before the announcement of Intact and Tryg's possible offer. The deal will see Intact run RSA's Canadian, UK and international operations, while Tryg will take RSA's Swedish and Norwegian businesses. The two will co-own RSA's Danish business. "The board of RSA is pleased to be recommending Intact and Tryg's cash offer for the company, which delivers attractive, certain value for our shareholders. The offer reflects the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash," said RSA Chair Martin Scicluna.
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Speciality chemicals firm Croda International said it has agreed to buy Fragrance Spanish Topco, trading as Iberchem, for EUR820 million. Iberchem was founded in 1985 and is headquartered in Murcia, Spain. Around 80% of its sales are fragrances for Personal Care and Home Care products, areas where it has a "similar customer profile" to Croda. The acquisition is expected to be earnings accretive in the first full financial year following completion, said Croda. The consideration will be funded via a combination of Croda's existing debt facilities and the proceeds of an equity placing, representing around 8% of its issued share capital. The placing is expected to raise GBP600 million. Turning to trading, Croda said its outlook for the full-year remains unchanged after an in-line performance in the second half so far. The full-year charge for group-wide share-based payment schemes is forecast to be higher than previously expected, it noted, due to recent share price performance.
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Energy utility SSE said revenue for the half-year to September 30 was GBP2.82 billion, down from GBP3.05 billion a year ago. SSE's pretax profit, however, multiplied to GBP829.5 million from GBP128.9 million a year ago. "Reported results for the period to 30 September 2020 are significantly higher than the previous year, reflecting pre-tax exceptional gains of GBP654.4m recognised during the year mainly driven by a combination of progressing with the group's GBP2bn plus non-core asset disposal programme and IFRS 9 remeasurements on operating derivatives," SSE explained. Adjusted pretax profit was down 26% to GBP193.9 million. Looking to the remainder of the year, SSE said the pandemic hit to operating profit for the financial year to March 31 is expected to be towards the middle of the GBP150 million to GBP250 million range set out in June.
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Anglo American said diamond markets improved in November, with provisional ninth cycle sales higher in 2020 than a year before. Anglo reported the sales value of rough diamond sales for De Beers in cycle nine of 2020 as USD450 million. This is a provisional figure and represents sales as at November 16. In comparison, the actual sales value in cycle nine of 2019 was USD400 million and the actual sales value in cycle eight of 2020 was USD467 million. As a result of restrictions on the movement of people and products in various jurisdictions worldwide, De Beers has implemented "a more flexible approach to rough diamond sales during the ninth sales cycles of 2020".
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COMPANIES - GLOBAL
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Sanofi was handed a pair of regulatory boosts in the US, with one of its drug landing fast track designation and another given a priority review. Sanofi's avalglucosidase alfa, an investigational enzyme replacement therapy, was given a priority review by the Food & Drug Administration as a therapy for Pompe disease. Patients with Pompe disease are unable to sufficiently breakdown glycogen, a sugar, and often suffer from muscle weakness and breathing difficulties. An FDA decision on the Sanofi drug is due in May next year. The French pharmaceutical firm separately said its rilzabrutinib drug received fast track designation for treatment of immune thrombocytopenia, a blood abnormality disorder. Fast track designation ramps up the development of a drug to fill an unmet need.
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Wednesday's Shareholder Meetings
Beeks Financial Cloud Group PLC - AGM
Henderson Eurotrust PLC - AGM
Exillon Energy PLC - EGM re stock listing cancellation
Avingtrans PLC - AGM
Rainbow Rare Earths Ltd - AGM
Origin Enterprises PLC - AGM
Countrywide PLC - GM re proposed recapitalisation
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By Tom Waite; thomaslwaite@alliancenews.com
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