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Short form announcement: Half year results to 30 June 2019
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: HALF YEAR RESULTS TO 30 JUNE 2019
Capital & Regional, the UK focused REIT with a portfolio of dominant in-town community shopping
centres, today announces its half year results to 30 June 2019.
Lawrence Hutchings, Chief Executive, comments:
“The business has again produced a robust set of operational results in what remains a challenging period
for UK retail. We remain confident that with our Community Centre strategy, focussed on providing non-
discretionary and needs based products and services, we are well placed to continue this trend and to evolve
with the ongoing structural changes in the retail sector, as evidenced by our high occupancy, resilient
income metrics and strong leasing performance.
We have been making solid progress to strengthen the balance sheet and provide additional liquidity given
the fall in valuations, due primarily to the impact of CVAs and retailer administrations and market yield
shift, which has increased net LTV to 52%. In August we conditionally exchanged on the sale of non-core
land at Wood Green which is due to realise £5 million. We have also reached an advanced stage in the
identification of a preferred development partner to fully fund and build out the c.450 apartment scheme at
Walthamstow that was consented in the second half of 2018. This creates the potential to realise, subject
to planning, a capital receipt of approximately £20 million during 2020 and has provided further confidence
and read through to the residential opportunity at Ilford which we believe could be in excess of the 200
apartment scheme currently consented. Furthermore, we have agreed terms on a 12 month amendment to
our Luton facility which provides greater headroom. This follows the previous amendments to our Hemel
Hempstead and Group Revolving Credit Facilities earlier in the year to support ongoing capex projects.
The Board has also announced today that it is in discussions with Growthpoint Properties Limited
(“Growthpoint”), the largest real estate investment trust primary listed on the Johannesburg Stock
Exchange, about Growthpoint acquiring a majority stake in the Company through a combination of a partial
offer in cash for Capital & Regional shares and an injection of capital to support the Company’s strategy
through a subscription for new Capital & Regional shares. As a consequence of this, the Board has decided
to defer a decision on the level of the interim dividend until such process has concluded.”
Further information concerning the discussions with Growthpoint is set out in the Company’s separate
announcement which was released today.
HIGHLIGHTS
Strong leasing momentum delivering robust performance against tough operating backdrop
• 44 new lettings and renewals in the period at a combined average premium of 31.2%^ to previous
passing rent and a 6.9%^ premium to ERV
• Contracted rent robust at £61.1 million down 1.9% (June 2018: £62.3 million) with new letting
activity partially offsetting impact of CVAs and administrations
• Net Rental Income (NRI) down £0.8 million or 3.1% to £25.2 million (June 2018: £26.0 million)
due to CVAs and retailer restructurings, which impacted by approximately £1.1 million
• Adjusted Profit1 down 4.5% to £14.8 million (June 2018: £15.5 million)
• IFRS Loss for the period of £55.4 million due primarily to a fall in property valuations (June 2018:
Profit of £6.7 million), driven by negative sentiment towards retail assets and income impact of
CVAs and retailer administrations, offsetting Adjusted Profit
• Continuing occupier demand reflected in high occupancy at 96.8% (30 June 2018: 96.9%)
• Footfall significantly outperformed the national index with our three London centres increasing by
0.6%. There were 37.2 million visits across the wider portfolio, reflecting a decline of 1.8%,
substantially ahead of the national index, which was down by 3.6%.
Focus on maintaining balance sheet headroom
• Group cost of debt of 3.26% with average debt maturity of 5.9 years*
• Basic and EPRA NAV per share, at 51p and 52p respectively (December 2018: 60p and 59p
respectively), impacted by fall in property valuations of our regional assets
• Net LTV increased to 52% (December 2018: 48%)
• £5 million sale of non-core land at Wood Green conditionally exchanged with proceeds anticipated
in Q4 2019.
• Identification of preferred development partner at Walthamstow at advanced stage enabling
potential for significant capital receipt in 2020
• Decision on level of Interim Dividend 2019 deferred until conclusion of discussions with
Growthpoint Properties Limited. A dividend of 1.82p per share was paid out for the six month
period ended 30 June 2018.
6 months to 6 months to Year to
June 2019 June 2018 Dec 2018
Net Rental Income £25.2m £26.0m £51.9m
Adjusted Profit# £14.8m £15.5m £30.5m
Adjusted Earnings per share# 2.04p 2.15p 4.23p
Headline Earnings per share 1.24p 2.46p 4.23p
Basic Earnings per share (7.63)p 0.93p (3.55)p
IFRS (Loss)/Profit for the period £(55.4)m £6.7m £(25.6)m
Net Asset Value (NAV) per share 51p 66p 60p
EPRA NAV per share 52p 65p 59p
Group net debt £413.1m £406.4m £411.1m
Net debt to property value 52% 46% 48%
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 Half-Year Results to 30 June 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 https://capreg.com/media/2919/interim-results-
2019-press-release-11-september-final.pdf and via the JSE at
https://senspdf.jse.co.za/documents/2019/jse/isse/crpe/hy2019.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.
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 ‘Alternative Performance Measures’ (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:
All metrics are for wholly-owned portfolio unless otherwise stated.
# 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 6 to the condensed financial statements.
^ 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.
* As at 30 June 2019, assuming exercise of all extension options.
By order of the Board,
L. Hutchings S. Wetherly
Chief Executive Group Finance Director
11 September 2019
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 c. £0.8 billion 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: 11/09/2019 08:00:00
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