Wrap Text
Year end results to 30 December 2019 and final dividend declaration
CAPITAL & REGIONAL PLC
(Incorporated in the United Kingdom)
(UK company number 01399411)
LSE share code: CAL JSE share code: CRP
LEI: 21380097W74N9OYF5Z25
ISIN: GB0001741544
(“Capital & Regional” or “the Company” or “the Group”)
SHORT FORM ANNOUNCEMENT: YEAR END RESULTS TO 30 DECEMBER 2019 AND
FINAL DIVIDEND DECLARATION
Capital & Regional (LSE: CAL), the UK focused REIT with a portfolio of dominant in-town community
shopping centres, today announces its full year results to 30 December 2019.
Lawrence Hutchings, Chief Executive, comments:
“2019 was a critical year of progress for Capital & Regional. Having completed the transaction with
Growthpoint in December 2019 the business is on a sound footing with the support of a significant and
well respected international business, enabling Capital & Regional to continue the roll out of our community
centre asset management strategy and providing a platform for potential growth.
In an environment that is not without its challenges, we have continued to make good progress
operationally. Across the year we completed 66 new lettings and renewals which have on average been
secured at premiums to both previous rents and ERV, underscoring the appeal of our centres to retailers
attracted to our convenience and necessity focus, as well as the affordability of our rents. Once again our
footfall has consistently outperformed the national index. Major lettings have been secured to Matalan
and Pure Gym at Maidstone and in Luton since the year end we have exchanged deals on c 16,000 sq ft
of previously vacant office space and agreed terms on the introduction of a new supermarket into the
scheme. Mindful of the ongoing pressures that retail property valuations have placed on leverage we
continue to actively realise value from alternative use and residential opportunities. Shortly after the y ear
end we received £5 million from the completion of the sale of non-core land at Wood Green and are
working closely with a preferred partner for our residential plans at Walthamstow, with a view to
crystallising the value of this opportunity around the end of the year. Of course, these types of opportunities
will also benefit the centres in the future by increasing catchment and footfall.
I remain confident that our focus on needs based, non-discretionary merchandise and the urban bias of
our real estate, with its close proximity to people and transport nodes provide an attractive opportunity for
us to create additional value through mixed use development working alongside experienced partners.
This ensures we are well positioned as a business to evolve, adapt and grow in tune with the rapidly
evolving retail landscape.”
HIGHLIGHTS
Robust leasing performance against tough operating backdrop
• 66 new lettings and renewals at a combined average premium of 20.9%1 to previous passing rent and
a 7.3%(1) premium to ERV
• Net Rental Income (NRI) down £2.6 million or 5.0% to £49.3 million (December 2018: £51.9 million) as
the positive leasing momentum was offset by a c. £3.0 million impact of CVAs and retailer
restructurings
• Adjusted Profit(2) down 10.2% to £27.4 million (December 2018: £30.5 million)
• Stable occupier demand reflected in high occupancy at 97.2% (December 2018: 97.0%)
• There were 74.3 million shopper visits across the portfolio in 2019, reflecting a like-for-like decline of
3.2%(3), substantially ahead of the national index, which was down by 4.9%
Significantly improved balance sheet security
• New equity injection of £77.9 million (before costs) reduced net LTV to 46% (December 2018: 48%)
leaving the Group with significantly improved covenant headroom. This being against the backdrop of
a 15.0% decline in our property values over 2019
• Basic and EPRA NAV per share, at 361 pence and 364 pence respectively (December 2018: 596
pence and 591 pence), reflecting the fall in property valuations and IFRS loss for the period of £121.0
million (2018: Loss of £25.6 million)(5)
• £5 million sale of non-core land at Wood Green completed in early 2020 and potential to crystallise
value from Walthamstow around the end of 2020
• Group cost of debt of 3.26% with average debt maturity of 5.4 years(4)
• Proposed Final Dividend of 11 pence reflecting approximately 90% of second half Adjusted Profit
(December 2018: 6 pence(5)) in line with both the policy stated in the prospectus supporting the
Growthpoint transaction and the Company’s REIT requirements.
2019 2018
Net Rental Income £49.3m £51.9m £(2.6)m (5.0)%
Adjusted Profit1 £27.4m £30.5m £(3.1)m (10.2)%
Adjusted Earnings per share (1, 5) 36.7p 42.3p (5.6)p (13.2)%
£(121.0)m £(25.6)m £(95.4)m
IFRS Loss for the period
Basic Earnings per share (5) (162)p (35)p (127)p
Total dividend per share (5) 21p 24.2p -3.2p (13.2)%
Net Asset Value (NAV) per share (5) 361p 596p -235p (39.4)%
EPRA NAV per share (5) 364p 591p -227p (38.4)%
Group net debt £336.9m £411.1m £(74.2)m (18.0)%
46% 48% (2) pps
Net debt to property value
Growthpoint Transaction
In September 2019, the Company announced that it was in discussions with Growthpoint Properties
Limited (“Growthpoint”), the largest real estate investment trust primary listed on the Johannesburg
Stock Exchange, to make a substantial investment in the Company. A formal offer to acquire a majority
stake was confirmed in October 2019 and approved by shareholders at a General Meeting on 26
November 2019.
Following this 311,451,258 new Capital & Regional shares were issued to Growthpoint at 25 pence per
share on 9 December 2019 resulting in gross proceeds of approximately £77.9 million being received by
the Company. On 23 December 2019 Growthpoint completed a partial offer to acquire a further
219,786,924 existing Capital & Regional plc shares at 33 pence per share for approximately £72.5
million resulting in a total investment of £150.4 million. The two transactions combined have resulted in
Growthpoint holding 51.1% of the issued share capital of the Company.
Use of Alternative Performance Measures (APMs)
Throughout the results statement we use a range of financial and non -financial measures to assess our performance. A number
of the financial measures, including Adjusted Profit, Adjusted Earnings per share and the industry best practice EPRA (European
Public Real Estate Association) performance measures are not defined under IFRS, so they are termed APMs. Management use
these measures to monitor the Group’s financial performance alongside IFRS measures because they help illustrate the
underlying performance and position of the Group. All APMs are defined in the Glossary and further detail on their use is provided
within the Financial Review.
Notes
1 For lettings and renewals (excluding development deals) with a term of five years or longer and which did not include a turnover
element or service charge restriction.
2 Adjusted Profit and Adjusted Earnings per share are as defined in the Glossary. Adjusted Profit incorporates profits from
operating activities and excludes revaluation of properties and financial instruments, gains or losses on disposal, exceptional
items and other defined terms. A reconciliation to the equivalent EPRA and statutory measures is provided in Note 5 to the
condensed financial statements.
3 Excludes Walthamstow from 22 July 2019 given impact of fire.
4 As at 30 December 2019, assuming exercise of all extension options.
5 Per share amounts are adjusted to reflect the impact of the 10 for 1 share consolidation that completed on 15 January 2020.
Dividend
As outlined in the Prospectus published on 7 November 2019, the Company agreed to adopt a policy of
distributing on a semi-annual basis (in the approximate proportions of 45 / 55 and in that order in respect
of each financial year) not less than approximately 90% of the Company’s EPRA earnings.
The Board is proposing a final dividend of 11 pence per share, based on approximately 90% of earnings
for the second half of 2019. This will be paid as 100% property income distribution.
This will make the full-year dividend, adjusting the interim dividend of 1 pence for the impact of the recent
10 for 1 share consolidation, to 21 pence per share (December 2018: equivalent to 24.2 pence per share).
The key dates proposed in relation to the payment of the 2019 final dividend are:
• Confirmation of ZAR equivalent dividend Tuesday, 24 March 2020
• Last day to trade on Johannesburg Stock Exchange (JSE) Tuesday, 31 March 2020
• Shares trade ex-dividend on the JSE Wednesday, 1 April 2020
• Shares trade ex-dividend on the London Stock Exchange (LSE) Thursday, 2 April 2020
• Record date for LSE and JSE Friday, 3 April 2020
• Annual General Meeting Wednesday, 20 May 2020
• Dividend payment date Tuesday, 26 May 2020
A scrip alternative will not be offered for this dividend payment. South African shareholders are advised
that the final dividend will be regarded as a foreign dividend. Further details relating to withholding tax for
shareholders on the South African register will be provided within the announcement detailing the currency
conversion rate on Tuesday, 24 March 2020. Share certificates on the South African register may not be
dematerialised or rematerialised between Wednesday, 1 April 2020 and Friday, 3 April 2020, both dates
inclusive. Transfers between the UK and South African registers may not take place between Tuesday,
24 March 2020 and Friday, 3 April 2020, both dates inclusive .
About this announcement:
This short-form announcement is the responsibility of the Directors of the Company. It is only a
summary of the information contained in the full Year End Results to 30 December 2019
announcement and does not contain full or complete details.
Any investment decision by investors and/or shareholders should be based on consideration of
the full announcement available on the Company’s website at www.capreg.com and can be
accessed using the following JSE link:
https://senspdf.jse.co.za/documents/2020/jse/isse/crpe/FY2019.pdf
The full announcement is also available at our registered office and our sponsor’s office for
inspection, at no charge, during office hours. Copies of the full announcement may be requested
by emailing capinfo@capreg.com.
By order of the Board,
L. Hutchings S. Wetherly
Chief Executive Group Finance Director
5 March 2020
JSE sponsor
Java Capital
Notes to editors:
About Capital & Regional plc
Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate
their catchment, serving the non-discretionary and value orientated needs of the local communities. It has
a strong track record of delivering value enhancing retail and leisure asset management opportunities
across a portfolio of in-town shopping centres.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton,
Maidstone, Walthamstow and Wood Green. Capital & Regional manages these assets through its in-house
expert property and asset management platform.
Capital & Regional is listed on the main market of the London Stock Exchange (LSE) and has a secondary
listing on the Johannesburg Stock Exchange (JSE)
For further information see capreg.com/
Date: 05-03-2020 09:00:00
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