LONDON, UNITED KINGDOM--(Marketwired - May 15, 2014) - Land Securities Group PLC (
These Annual Results, our Annual Report and the Land Securities website may contain certain "forward-looking statements" with respect to the Land Securities Group PLC and the Group's financial condition, results of its operations and business, and certain of Land Securities Group PLC's and the Group's plans, strategy, objectives, goals and expectations with respect to these items and the economies and markets in which Land Securities Group operates.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", "due", "could", "may", "should", "will", "would", "expects", "believes", "intends", "plans", "targets", "goal" or "estimates" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are not guarantees of future performance. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many of these assumptions, risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely. There are a number of such factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the legal, regulatory and competition frameworks in which the Group operates; changes in the markets from which the Group raises finance; the impact of legal or other proceedings against or which affect the Group; changes in accounting practices and interpretation of accounting standards under IFRS, and changes in interest and exchange rates.
Any written or verbal forward-looking statements, made in these Annual Results, our Annual Report, or the Land Securities website or made subsequently, which are attributable to Land Securities Group PLC or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Each forward-looking statement speaks only as of the date it is made. Except as required by its legal or statutory obligations, Land Securities Group PLC does not intend to update any forward-looking statements.
Annual results for the year ended 31 March 2014
"Land Securities is reaping the reward of its bold strategy to develop early and speculatively in central London. Our buildings are coming to the London market in the right locations, when competition is low and occupiers are actively planning to move. This strategy, together with a resurgent London market, has led to significant valuation gains, while our near fully-let retail portfolio has delivered strong cash flow and increased revenue profit.
"20 Fenchurch Street, one of our most financially successful developments yet, has so far delivered a valuation surplus of £137.2m. The combination of location, timing, form and function mean the building is now 87% let with an average lease length of 17 years. The solar glare issue last summer illustrates the risk associated with development but we now have planning permission for an external solution which we will commence fitting this month. Further west, at the emerging Crossrail/Thameslink hub, since the year end we have pre-let the entirety of 2 New Ludgate to Mizuho Group on a 20 year lease.
"Our balance sheet discipline is also making the business stronger. Development expenditure and acquisitions have been funded by recycling capital from sales. As a result, the increase in valuation of our portfolio coupled with more recent sales has reduced our loan-to-value ratio further, to 32.5%.
"In London, our building programme will continue apace as we seek to maximise the benefits from favourable market conditions, though any additional commitments in the near term will require pre-lets. We expect to see a shortage of Grade A space until at least late 2016. The market balance beyond that will depend on the general development response to improving market conditions.
"In retail, economic growth has returned and we are now seeing a real rise in wages which is welcome news for retailers, but rental growth will be limited to the best locations. Our strategy is to ensure we have the right properties in the right locations and to anticipate and accommodate retail trends. Unless we see buying opportunities that satisfy these requirements, our focus will remain on developing retail assets which fit this strategy and selling assets that do not.
"Overall, market conditions for property are positive and Land Securities is well positioned. Our strategy is clear, our people focused, our activity relentless and our business stronger. I am confident of continued good performance." said Land Securities' Chief Executive Robert Noel.
|31 March 2014||31 March 2013||Change|
|Valuation surplus (1)||£763.8m||£217.5m||Up 7.1%|
|Basic NAV per share||1,069p||959p||Up 11.5%|
|Adjusted diluted NAV per share (2)||1,013p||903p||Up 12.2%|
|Group LTV ratio (1)||32.5%||36.9%|
|Profit before tax||£1,108.9m||£533.0m|
|Revenue profit (1)||£319.6m||£290.7m||Up 9.9%|
|Adjusted diluted EPS||40.5p||36.8p||Up 10.1%|
1. Including our proportionate share of subsidiaries and joint ventures. The % change for the valuation surplus represents the valuation movement as a percentage of the market value of the combined portfolio at the beginning of the year.
2. Our key valuation measure.
A year of action....
- £26.6m of development lettings
- £23.6m of investment lettings
- Sales(1) of £920.4m
- Acquisitions of £209.9m including X-Leisure
- Development and refurbishment expenditure(1) of £366.6m
- Further developments committed with total development costs of £551.0m
- Ungeared total property return 12.8%, underperforming the IPD Quarterly Universe at 13.6%
- Total business return (dividends and adjusted diluted NAV growth) of 15.5%
- Combined portfolio valued at £11.86bn, with a valuation surplus of 7.1%
- Valuation surplus on properties in the development programme of 22.3%
- Revenue profit £319.6m, up 9.9%
- Profit before tax £1,108.9m, up from £533.0m
- Voids in the like-for-like portfolio up from 2.0% to 2.1%
Strong financial structure
- Group LTV ratio at 32.5%, based on adjusted net debt of £3.9bn
- Weighted average maturity of debt at 9.3 years
- Weighted average cost of debt at 5.0%
- Cash and available facilities of £1.1bn
- Recommended increase in final dividend to 7.9p (from 7.6p)
1. Includes trading properties.
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