Land Securities PLC (LON:LAND) has reversed to a big full-year loss reflecting the costs of a major refinancing, while the property group saw the London office market and the retail sector stagnate.
For the year ended 31 March 2018, the FTSE 100-listed firm posted a pre-tax loss of £251mln, down from a £112mln profit a year earlier, leading to a reduction in its adjusted diluted net asset value per share to 1,403p from 1,417p.
READ: Land Securities weighs in with a resilient performance against a tough economic backdrop
The real estate investment trust saw its revenue profit increase by 6.3% to £406mln, while adjusted diluted earnings per share rose by 9.9% to 53.1p.
The group noted that it worked on both sides of its balance sheet during the year, returning £475mln to shareholders and refinancing over £1.5bn of its bonds, the costs of which was behind the headline loss.
The group recommended a final dividend of 14.65p, which increased the total payout for the year by 14.7% to 44.2p.
Land Securities’ chief executive, Robert Noel commented: "The business is in a strong position. Our portfolio is well let and adaptable to changing customer expectations.
“In a market facing short-term uncertainty, we have conservative gearing, market-leading debt facilities and a growing pipeline of opportunities for the future."
New chairwoman named
The firm also announced the appointment of Cressida Hogg a its non-executive chairman with effect from completion of its annual general meeting on 12 July 2018.
Hogg will succeed Alison Carnwath who will retire from the board on that date
In early trading, Land Securities shares were around 1% lower at 959.4p.
In a note to clients, analysts at Liberum Capital commented: “FY NAV was just below our forecasts with property values softer, but the income profile continued to improve as refinancing activity delivered enhancement. Softer London Office and Retail valuations are unlikely to change management's cautious approach with respect to the deployment of risk.”
“However,” the added, “the shares already price a marked downturn, a 1.4m sqft development pipeline provides some options for growth and low financial leverage provides firepower to capitalise on any market dislocation.”
Liberum repeated a ‘buy’ rating and 1,125p price target on Land Securities shares.