REG - British Land Co PLC - Final Results

British LandAnnouncement

22/05/2024 07:00

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RNS Number : 3720P  British Land Co PLC  22 May 2024

22 May 2024

strategy delivering: strong rental growth, STABLE values in H2

 

Simon Carter, CEO said:

 

"Our strategy of focusing on campuses, retail parks and London urban logistics
is delivering.

ERV growth accelerated to 5.9%, exceeding our guidance in all sectors. We
outperformed the MSCI benchmark by 300 basis points and values were stable in
the second half. Our operational momentum continues with high occupancy,
strong leasing and good cost discipline driving Underlying Profit growth of
2%.

 

We have achieved much this year - the surrender and joint venture of 1 Triton
Square, the commitment to 2 Finsbury Avenue following the record breaking
pre-let to Citadel, and the sale of Meadowhall are all good examples of our
active approach to capital recycling. As a result, 93% of our portfolio is now
in our chosen markets.

 

Although the geopolitical and economic landscape remains uncertain, with a
portfolio net equivalent yield over 6%, 3-5% forecast rental growth and
development upside, we expect to generate attractive future returns."

 

Financial

•    Underlying Profit of £268m up 2%

•    EPRA cost ratio 16.4% vs 19.5% in FY23

•    Underlying earnings per share of 28.5p up 1%

•    Dividend per share of 22.8p up 1%

 

Balance sheet

•    EPRA Net Tangible Assets per share of 562p down 4.4% in the year

•    Pro forma Loan To Value 34.6%(1) and FY24 Loan To Value at 37.3%
(FY23 36.0%)

•    Pro forma Group Net Debt to EBITDA(1) 6.4x and FY24 Group Net Debt
to EBITDA 6.8x (FY23 6.4x)

•    Fitch Senior Unsecured credit rating at 'A' with stable outlook
(affirmed August 2023)

•    £1.9bn undrawn facilities and cash, with £1bn of financing
activity in the year

•    Interest rate on our debt fully hedged for FY25 and 86% hedged on
average over the next five years

 

CAPITAL ACTIVITY

•    Disposal proceeds in FY24 of £410m, 11% above book value on average

•    Sale of 50% stake in Meadowhall Shopping Centre to Norges for
£360m, expected to complete in July 2024

•    Acquisition of Westwood Retail Park, Thanet for £55m at a net
initial yield of 8.1%

 

operational metrics

•    Portfolio occupancy 97%(2): Campuses 96%(2), Retail Parks 99%,
London Urban Logistics 100%

•    Leased 3.3m sq ft, 15.1% ahead of ERV

•    Campus leasing 679,000 sq ft, 8.7% ahead of ERV; a further 316,000
sq ft signed since 31 March 2024, 13.1% ahead of ERV

•    Campus under offers as of 17 May 2024, 544,000 sq ft, 9.3% ahead of
ERV, with a further 806,000 sq ft in negotiations

•    Retail & London Urban Logistics leasing 2.6m sq ft, 17.8% ahead
of ERV, and 493,000 sq ft under offer, 17.9% ahead of ERV

 

Portfolio VALUATION

•    ERV growth of 5.9%: Campuses 5.4%, Retail Parks 7.2%, London Urban
Logistics 10.0%

•    NEY(3) +33bps to 6.2%: Campuses +50 bps to 5.5%, Retail Parks +12
bps to 6.7%, London Urban Logistics +24 bps to 4.9%

•    Values -2.6%: Campuses -5.3%, Retail Parks +2.7% and London Urban
Logistics +3.7%

•    H2 values -0.2%: Campuses -1.5%, Retail Parks +2.5% and London Urban
Logistics +3.1%

•    Outperformed MSCI All Property total return benchmark by 300 bps,
and 800 bps on a sector weighted basis

 

Sustainability

•    GRESB rating of 5* for both Standing Investments and Developments

•    58% of the portfolio rated EPC A or B, up from 45% at FY23, and we
expect to increase to around 64% in FY25(4)

•    New 2030 Social Value Target to generate £200m of direct value of
which 50% is social and 50% is economic

 

Outlook

•    FY25 ERV guidance of 3-5% growth in each of our markets

•  Comfortable with market expectations for FY25 Underlying EPS of 27.9p

•    Expect committed and recently completed developments(5) to deliver
4.5p of EPS, of which 2.6p will be in FY26

 

Summary performance

 Year ended                                            31 March    31 March    % Change

2024

                                                                    2023
 INCOME STATEMENT
 Underlying Profit(6)                                  £268m       £264m       2%
 Underlying earnings per share(6)                      28.5p       28.3p       1%
 IFRS profit (loss) after tax                          £1m         £(1,039)m
 IFRS basic earnings per share                         (0.1)p      (112.0)p
 Dividend per share                                    22.80p      22.64p      1%
 Total accounting return(6)                            (0.5)%      (16.3)%

 As at                                                 31 March    31 March

2024
2023
 BALANCE SHEET
 Portfolio at valuation (proportionally consolidated)  £8,684m     £8,898m     (2.6)% (7)
 EPRA Net Tangible Assets per share(6)                 562p        588p        (4.4)%
 IFRS net assets                                       £5,312m     £5,525m
 Net Debt to EBITDA (Group)(8,9)                       6.8x        6.4x
 Loan to value (proportionally consolidated)(9, 10)    37.3%       36.0%
 Senior Unsecured credit rating                        A           A

 Year ended                                            31 March    31 March

2024
2023
 OPERATIONAL STATISTICS
 Lettings and renewals over 1 year                     2.8m sq ft  2.6m sq ft
 Total lettings and renewals                           3.3m sq ft  3.4m sq ft
 Committed and recently completed developments         2.8m sq ft  1.8m sq ft
 SUSTAINABILITY PERFORMANCE
 MSCI ESG                                              AAA rating  AAA rating
 GRESB (Standing Investments / Developments)           5* / 5*     4* / 5*

 

1. Proportionally consolidated LTV and Group Net Debt to EBITDA pro forma for
the sale of our 50% stake in Meadowhall Shopping Centre contracted to complete
in July 2024

2. Occupancy excludes recently completed developments at Norton Folgate and 3
Sheldon Square

3. Net Equivalent Yield

4. Measured by ERV

5. Committed (including post period end commitment of 2 Finsbury Avenue) and
completed developments including near term development of 1 Triton Square

6. See Note 2 to the condensed financial statements for definition and
calculation

7. Valuation movement during the year (after taking account of capex) of
properties held at the balance sheet date, including developments (classified
by end use), purchases, sales and surrender premium received at 1 Triton
Square

8. Net Debt to EBITDA on a Group basis excludes non-recourse and joint venture
borrowings and includes distributions and other receivables from non-recourse
companies and joint ventures

9. See Note 2 to the condensed financial statements for definition,
calculation and reference to IFRS metrics

10. EPRA Loan to value is disclosed in Table E of the condensed financial
statements

 

BOARD

During the year we have had a series of changes to the Board. William Rucker
has been appointed as Chair Designate to succeed Tim Score who will step down
after the 2024 AGM after 10 years on the Board and five years as Chair. I
would like to thank Tim for his excellent advice and support during his tenure
as Chair and welcome William, whose experience and insights will be very
valuable as we continue to execute our strategy.

We would like to extend a warm welcome to Amanda Mackenzie, Mary Ricks and
Amanda James who have been appointed as independent Non-Executive Directors.
The Board will benefit hugely from the depth and breadth of their experience.
We would also like to thank Laura Wade-Gery for her significant contribution;
she will step down as Non-Executive Director in July at the 2024 AGM after
nine years on the Board and we wish her well in her future endeavours. Amanda
Mackenzie will become Chair of the Remuneration Committee at the conclusion of
the 2024 AGM.

 

Dividends

Our dividend is semi-annual, and in line with our dividend policy, is
calculated at 80% of Underlying EPS based on the most recently completed
six-month year. Applying this policy, the Board are proposing a final dividend
for the year ended 31 March 2024 of 10.64p per share. Payment will be made on
Friday 26 July 2024 to shareholders on the register at close of business on
Friday 21 June 2024. The dividend will be a Property Income Distribution. A
Dividend Reinvestment Plan (DRIP) is provided by Equiniti Financial Services
Limited which enables the Company's shareholders to elect to have their cash
dividend payments used to purchase the Company's shares. More information can
be found at www.shareview.co.uk/info/drip.

 

full unedited text

In accordance with DTR 6.3.5 (1A), the full unedited final results for the
year ended 31 March 2024 will shortly be available to download from the
National Storage Mechanism. A copy is also available on the Company's website:
https://britishland.com/news/press-releases/full-year-results-2024
(https://url.uk.m.mimecastprotect.com/s/pD5VCBBENTv1N4zszvo2i?domain=britishland.com)
and
here: http://www.rns-pdf.londonstockexchange.com/rns/3720P_1-2024-5-21.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3720P_1-2024-5-21.pdf)

 

Results Presentation and Investor Conference Call

A presentation of the results will take place at 8.30am on Wednesday 22 May
2024 at Peel Hunt, 100 Liverpool Street, Broadgate and will be broadcast live
via webcast (www.britishland.com (http://www.britishland.com) ) and conference
call. The details for the conference call and weblink are as follows:

 

UK Toll Free Number:        0800 358 1035

International:                      +44 20 3936 2999

Access code:                      238950

Click for access:                 Audio weblink
(https://streamstudio.world-television.com/927-1254-39337/en)

A dial in replay will be available later in the day for 7 days. The details
are as follows:

 

Replay number:                   020 3936 3001

Passcode:                            867542

 

Accompanying slides will be made available at Britishland.com just prior to
the event starting.

For Information Contact

 

Investors

Sandra Moura, British
Land
07989 755535

 

Media

Charlotte Whitley, British Land
           07887 802535

Guy Lamming/Gordon Simpson, FGS Global                   020 7251
3801

BritishLand-UK@fgsglobal.co

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