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British Land NAV way ahead of forecasts after strong letting performance

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Staff Writer | May 17, 2017
British Land
British Land   The negative property valuation movement

British Land reported a stronger year-end net asset value than the market was expecting but despite its confident talk of generating better returns, investors got the wobbles over its talk of "uncertainty" and the reining back of speculative developments.

British Land recorded an EPRA NAV almost flat at 915p, with net assets at £9.5bn at its 31 March year end, down from £9.6bn over the year. The consensus estimate for NAV was 853p.

With £1.5bn of disposals were made over the year, including the sale of its 50% interest in the Leadenhall Building for a 26%-above-book-value £575m which is expected to complete post year end in May, the value of the portfolio weakened 1.4%, eased by a 1.6% gain in the second half.

The negative property valuation movement in the year meant at the reported level IFRS profit before tax fell 85% from £1.3bn to £195m.

But the leasing performance was strong, with 1.7m square feet of lettings and renewals across the portfolio, 8.0% ahead of estimated rental value, adding £22m of rent in the year.

Despite the huge structural changes in the retail sector, the group's retail lettings were made at 10.8% ahead of ERV and offices 1.4% ahead.

This helped lift underlying profit 7.4% to £390m and underlying earnings per share 10.9% to 37.8p.

Using some of the £363m cash generated, a final quarterly dividend of 7.3p was declared, up 3% on the same period last year and lifting the full year payout 3% to 29.2p.

For the 2017/18 financial year, the board has proposed increasing this by 3% again for a total dividend of 30.08p per share, with 7.52p in the first quarter.


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