Landsec dips into the red
Landsec has dropped into the red, posting a £251m loss and a 1% drop in its adjusted diluted NAV, which fell to 1,403p a share in the year ended 31 March 2018.
Chief executive Rob Noel said the company had “worked on both sides of our balance sheet during the year, returning £475m to shareholders and refinancing over £1.5bn of our bonds, which reduced our weighted average cost of debt to 2.6% and lengthened its duration to 13.1 years.”
He said it was the cost of this refinancing that “was behind both our loss for the year of £251m and the slight reduction in adjusted diluted net asset value per share.”
Landsec has dropped into the red, posting a £251m loss and a 1% drop in its adjusted diluted NAV, which fell to 1,403p a share in the year ended 31 March 2018.
Chief executive Rob Noel said the company had “worked on both sides of our balance sheet during the year, returning £475m to shareholders and refinancing over £1.5bn of our bonds, which reduced our weighted average cost of debt to 2.6% and lengthened its duration to 13.1 years.”
He said it was the cost of this refinancing that “was behind both our loss for the year of £251m and the slight reduction in adjusted diluted net asset value per share.”
Revenue profit increased by 6.3% to £406m and adjusted diluted earnings per share rose by 9.9% to 53.1p.
Landsec has adopted a cautious approach to development in London, despite having largely built out its pipeline.
Last year, Noel said the developer’s markets were “pausing for breath”. Commenting on the results this morning, he admitted demand from office occupiers was “somewhat stronger than expected” but said anticipated demand from retailers was weaker.
The company currently has vacant space of 2.4%.
Noel said he could see speculative development becoming “an attractive option” again.
“While our current development activity is based on prelettings, with the UK’s exit from the EU likely to lead to fewer construction commitments, speculative development will become an attractive option in due course,” he said.
Over the past year, shares in Landsec have fallen by 14.4%.
The company recommended a final dividend to 14.65p, increasing the dividend for the year by 14.7%.
It put the rise down to the “successful leasing of our speculative development programme, combined with the increase in adjusted diluted earnings per share”.
Landsec has also announced the appointment of Cressida Hogg as chair. She was formerly global head of infrastructure at the $350bn Canada Pension Fund Investment Board, managing a portfolio of investments worth around £16bn.
She will succeed Dame Alison Carnwath, who retires after 14 years on the board and nine years as chairman.
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