Land Securities Group PLC (LSE:LAND) shares fell as much as 4.8% after it reported first-half profit that fell short of expectations as it lost money on property disposals.
The group, which owns, operates and develops a portfolio of offices, retail and mixed-use assets, reported a 3.2% rise in EPRA (operational) EPS 3.2% to 25.8p, supported by 5.2% like-for-like income growth and lower overhead costs. IFRS profit before tax was £98 million, down 60% and below market expectations, after disposals led to a £67 million loss on sale.
Landsec said EPRA occupancy increased to 97.7%. Office like-for-like income grew 6.8% and retail like-for-like income rose 5%. Pro-forma LTV was 38.9% following disposal activity.
Max Harper, analyst at Third Bridge, said the weaker-than-expected profit should be partly balanced by solid rental growth and some guidance upgrades.
"The miss mainly reflects capital recycling of low-return assets and losses on disposals," Harper said. "Rental income was decent, rising 5.2%, while occupancy ticked up to 97.7%, close to a ten-year high."
The company raised guidance for FY26. It now expects like-for-like income growth of around 4–5% and EPRA EPS growth at the top end of the 2–4% range. Potential FY30 EPRA EPS was increased to around 62p.
Chief executive Mark Allan said: "We continue to see clear positive momentum across every part of our business, notwithstanding the wider economic environment. Owning the right real estate has never been more important, so we continue to benefit from our proactive portfolio repositioning over the last few years, and our entire business is also benefiting from a sharper focus on sustainable EPS growth as our primary performance objective, providing greater clarity in terms of priorities and decision-making.
"This gives us the confidence to raise both our near-term EPS guidance and medium-term EPS growth potential. With a best-in-class portfolio, effective capital allocation, and a clarity of purpose, priorities and objectives, our business is well positioned to build on our strong performance momentum."
Landsec's shares retraced some of their losses to trade 22p down at 625p.
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