Land Securities ups 1H profits and dividend

Property giant Land Securities saw profits rise in the first half, driven mainly by increased rental income.

The company said it was benefitting from the financial strength of its main customer base, large corporates.

"Many of these businesses reorganised successfully during the downturn, are performing well in the current challenging conditions and have demonstrated a willingness to invest in their businesses," it said.

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"This is flowing through into occupational requirements, both in London offices and in retail."

Underlying pre-tax profit rose to £159.3m, a 17% rise on the first six months of 2010.

Adjusted diluted earnings per share went up 16.5% over the comparative period to 20.5p.

The firm said rental values were up 1.6% across the like-for-like portfolio since March 2011.

It added that its valuation surplus of £211.5m in the six months represented a 2.1% increase in the value of its portfolio since March 2011.

However, this was a big drop on the £314.1m valuation surplus reported the previous year.

Land said it would pay a second quarterly dividend of 7.2p per share. Taken together with the first quarterly dividend of 7.2p, this makes a first half dividend of 14.4p per share.

Its shopping centre portfolio in the period saw footfall down 0.2% on the same period in the prior year, although this compared favourably with the national benchmark which was down 1.7%.

Chief executive Francis Salway said his firm was "alive to the potential effects of economic uncertainty and changeable sentiment in capital markets".

"We have consistently stated that we did not expect to see a straight-line recovery in our market, rather that it would be interspersed with ripples and we see no reason to adjust this outlook," he said.

The firm said it would watch the markets carefully for acquisition opportunities.

Its net debt decreased by £10.0m to £3,3bn in the first half.