Capital & Regional has posted a 6% increase in net asset value to 54p a share and returned to the black.
In its full year results to the end of December 2013, the co-investing asset manager delivered a pre-tax profit of £9.3m compared with a prior year loss of £12.7m.
The group’s recurring profit fell from £17m to £14m reflecting the sale of The Junction and X-Leisure businesses during the period which contributed recurring pre-tax profit of £2.7m in 2012.
It also takes in the loss of income from the sale of three Mall Fund assets in 2012 and 2013 which include The Pavilions, Uxbridge and The Gracechurch Centre, Sutton Coldfield. Proceeds from these sales were used to repay debt within the Mall.
The group completed 56 new lettings adding £5m of revenue and 31 lease renewals adding £1.5m at a combined 0.7% ahead above ERV although annual rental income was down slightly from £68.5m at the end of 2012 to £67m.
Footfall outperformed the national index by 1.2%, excluding the Lincoln Centre – which is under development – falling by 2.5% against a national average of -3.7%.
Occupancy was up in the second half, standing at 96.3% compared with 95.4% in June.
The company’s board has decided to resume dividend payments after five years said “in view of the group’s significantly improved financial position and in anticipation of the The Mall’s ability to recommence distributions” according to chairman John Clare.
It has recommended an interim dividend of 0.25p a share, and a second interim dividend of 40p making a total dividend of 65p a share for 2013.
Looking ahead, C&R said it plans to “deliver value from an agreed £40m asset management programme across its core portfolio of 8 UK shopping centres”.
It plans to accelerate the disposal of its €404m German portfolio held in a joint venture with Ares Management and complete further disposals of “other non-core assets”.
Updating on the refinancing of The Mall Fund – in which it now owns a 29.26% stake – it said detailed negotiations are ongoing with a number of interested parties and expects the €379m CMBS to refinance by the time of its interim results.
Clare said: “During the course of the year, the group continued to make significant progress in the execution of its strategy and I am pleased to report that this was reflected by a 6% increase in NAV per share from 2012, a return to profitability, with profit before tax for the year of £9.3 million, and the resumption of dividend payments. With a much strengthened financial position, we will now be focusing our financial resources and management skills on investing in and actively managing a portfolio of dominant UK community shopping centres, building on our proven track record of recycling capital to consolidate our position as a leading UK retail property company.”
Chief executive Hugh Scott-Barrett added: “We are now seeing a clear uptick in economic conditions which, in turn, has had a positive effect on retailer and consumer confidence. These factors, combined with a much-improved investment market, are providing a very supportive background for our UK shopping centre business. We have benefited from an active programme of asset management during the year, which has enhanced our operating performance and valuations towards the end of 2013.”
bridget.oconnell@estatesgazette.com
