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Land Securities Group plc

Land Securities Group PLC Increased focus on London with a growing development pipeline

Land Securities Group PLC (LON:LAND), today announced annual results for the year ended 31 March 2019

Chief Executive Robert Noel said:

“We’ve had a strong year operationally, maintaining high occupancy, expanding our development pipeline and delivering new products and services, including our Myo flexible offer. This is against the backdrop of political gridlock and the well-publicised difficulties in the retail market.

The actions we took both this year and last have delivered an increase in revenue profit of 8.9% to £442m. Adjusted diluted earnings per share were up 12.4% to 59.7p. Weaker retail markets account for an overall 4.1% fall in the value of our assets and a 4.6% reduction in EPRA net assets per share to 1,339p.

Our business continues to evolve. 65% of our assets by value and our entire £3.0bn pipeline of development opportunities are now in London and over the coming years the business will be more concentrated in the capital. Outside London, we’ll continue to reduce our exposure, maintaining our focus on experience-led destinations.

Landsec is in a healthy financial position. We have a clear sense of where current and future opportunities lie and are well placed to address our customers’ changing needs, and deliver sustained value creation for our shareholders. This is an exciting time for real estate companies with the insight and capabilities needed to create the spaces for tomorrow’s businesses and communities.”

Results summary

31 March 2019

31 March 2018(1)

Change

Revenue profit(2)(3)

£442m

£406m

Up 8.9%

Valuation deficit(2)(3)

£(557)m

£(91)m

Down 4.1%(4)

Loss before tax

£(123)m

£(43)m

Basic loss per share

(16.1)p

(5.8)p

Adjusted diluted earnings per share(2)(3)

59.7p

53.1p

Up 12.4%

Dividend per share

45.55p

44.2p

Up 3.1%

Net assets per share

1,341p

1,404p

Down 4.5%

EPRA net assets per share(2)

1,339p

1,403p

Down 4.6%

Group LTV ratio(2)(3)

27.1%

25.8%

Robust operational performance

– Revenue profit(2)(3) up 8.9% to £442m with net rental income up and costs down

– Loss(1) for the year of £119m (2018: £(44)m)

– Adjusted diluted earnings per share(2)(3) up 12.4% to 59.7p

– Full year dividend up 3.1% to 45.55p

– Combined Portfolio(2)(3) valued at £13.8bn, with a valuation deficit(2)(3) of £557m or 4.1%(4) impacted by weak retail markets

– EPRA net assets per share(2) down 4.6% to 1,339p

– Like-for-like net rental income up £10m or 1.9%

– London Portfolio up £20m or 7.9%

– Retail Portfolio down £10m or 3.6%

– Maintaining low like-for-like voids(5) at 2.7% (31 March 2018: 2.3%)

– Ungeared total property return(5) 0.4%

– London Portfolio 3.5% (MSCI Quarterly Universe 4.8%)

– Retail Portfolio (3.4)% (MSCI Quarterly Universe (6.8)%)

– Total business return(2) (1.2)%

Healthy financial position

– Group LTV ratio(2)(3) at 27.1% (31 March 2018: 25.8%)

– Adjusted net debt(2)(3) of £3.7bn (31 March 2018: £3.7bn)

– Weighted average cost of debt at 2.7% (31 March 2018: 2.6%)

– Weighted average maturity of debt at 12.3 years (31 March 2018: 13.1 years)

– Cash and available facilities(3) of £1.6bn

Increasing development pipeline

– London development opportunities increased to 3.6 million sq ft with an estimated total development cost of £3.0bn

– Good progress on site at 21 Moorfields, EC2, with Deutsche Bank confirmed for the whole building

– One Sherwood St, W1 under way, enabling works commenced at Nova East, SW1 with 105 Sumner St, SE1 starting later in the year

– 1.6 acre site at 25 Lavington Street, SE1 acquired during the year

– Planning applications being prepared for Portland House, SW1; Red Lion Court, SE1; Finchley Road, NW3; and Shepherd’s Bush, W12

– Master planning of Lewisham town centre, SE13 under way

Sustainability leadership

– Achieved a 39.8% reduction in carbon intensity and an 18.2% reduction in energy intensity compared with 2014 baseline

– CDP A-list ranking for carbon performance and climate disclosure, UK sector leader for both the Global Real Estate Sustainability Benchmark (GRESB) and the Dow Jones Sustainability Index.

– Winner of the 2019 edie Sustainability Leaders Award for the Built Environment

– Signatory to the UN Global Compact, publicly committing to deliver on universal sustainability principles of human rights, ethical labour, environment and anti-corruption