Disposals hit Land Securities' earnings

Real estate investment trust kingpin Land Securities claimed to have put in a resilient first half performance though earnings were hit by the group's disposals programme.

Resilient is one of those terms used when growth is subdued or negative, and such is the case with Land Securities, where adjusted diluted net asset value (NAV) per share edged up over the reporting period by a penny to 864p, while profit before tax was down by just under two-thirds to £131.4m from £378.8m at the interim stage of last year.

Revenue profit of £143.7m was down 9.8% year-on-year (2011: £159.3m) following disposals and development starts

Adjusted diluted earnings per share fell 10.2% to 18.4p from 20.5p the year before, despite which the interim dividend has been lifted by 2.8% to 14.8p from 14.4p.

The group's loan to value ratio eased to 36.2% at the end of September from 38.0% at the end of March.

Unlet uhits and tenants going bust are a worry for all property companies, but Land Securities seems to be keeping a lid on things on this front. Like-for-like voids - unlet properties - were down to 2.6% at the end of September from 2.9% at the end of March, with Retail voids improving to 3.1% from 3.4%. London continues to outperform the rest of the country, with voids of 2.0%, down from 2.4% at the end of March. Units in administration were down in Retail at 1.8% from 2.8% six months earlier, with London unchanged at 0.1%.

"We continue to deliver on a clear plan, and this is driving high levels of activity across the business. Having reduced our vacancy rates, and with encouraging interest in our developments, we have added more schemes to our development programme," revealed Robert Noel, Chief Executive of Land Securities.

"In challenging market conditions, we remain confident in our position and in our ability to deliver," he added.

JH