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 EBITDA1
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%
•
NEY3 +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 FY254
•
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
developments5 to deliver 4.5p of EPS, of which 2.6p will
be in FY26
Summary performance
Year ended
|
31 March
2024
|
31
March
2023
|
%
Change
|
|
INCOME STATEMENT
|
|
|
|
|
Underlying
Profit6
|
£268m
|
£264m
|
2%
|
|
Underlying earnings per
share6
|
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
return6
|
(0.5)%
|
(16.3)%
|
|
|
|
|
|
|
|
As at
|
31 March
2024
|
31
March
2023
|
|
|
BALANCE SHEET
|
|
|
|
|
Portfolio at valuation
(proportionally consolidated)
|
£8,684m
|
£8,898m
|
(2.6)%
7
|
|
EPRA Net Tangible Assets per
share6
|
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
2024
|
31
March
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
and here: 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)
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
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