London property specialist Capital and Counties Properties (Capco) has continued to drive performance across its estates during 2012, resulting in increased profit and a reduction to net debt.
In particular, a strong performance at Covent Garden boosted results, with a 4.5% increase in valuation (on a like-for-like basis) to £856m (Dec 2011 - £808m) driven by retail and residential repositioning and a 9.4% increase in new lettings above December estimated rental value.
Underlying earnings of £6.1m were consistent with those achieved in the first half of 2011. As anticipated, net rental income fell from £36.7m to £34.1m, but was offset by a reduction in underlying finance costs, from £18.5m to £14.1m.
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An increase in the weighted average shares on issue, the result of the capital raising in May 2011, accounts for the slightly lower per share earnings for the first half of 2012 of 0.9p (2011: 1.0p). Profit before tax remained stable at £8.0m.
Ian Hawksworth, Chief Executive of Capco, said: "This is another strong set of results from Capco as we work to unlock value from our prime central London assets. The creative regeneration of Covent Garden is driving growth, there is positive momentum at Earls Court and Seagrave Road, and our successful recycling of capital gives us a strong balance sheet and the ability to capitalise on future opportunities across our estates.
"The Covent Garden estate offers the potential for continued growth through the further evolution of the retail and F&B tenant mix, together with the residential opportunity on the upper floors. Given the performance over the past two years, long-term plans for more significant intervention in certain parts of the estate are being evaluated and planning applications may be submitted in due course.
"Whilst mindful of the continued uncertain macroeconomic environment, Capco's estates are strongly positioned within central London which is firmly established as an important global city. We continue to make good progress towards realising our longer term goals."
The firm also reported a 4.8% increase in total property value on a like-for-like basis to £1.6bn (Dec 2011 - £1.6bn).
Cash at the end of the period fell from £89.6m to £53.3m year-on-year.
The share price rose 0.38% to 210.50p by 10:04.
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