Yahoo Finance

• Like-for-Like Net Rental Income Growth: Increased by 3.4%.

• Return on Equity: Increased to 3.9% for the six months ending September.

• EPS Guidance: Increased for the full year.

• Acquisition: GBP120 million stake in Bluewater at an 8.5% yield.

• Occupancy: London portfolio virtually full; retail occupancy higher than pre-COVID levels.

• Gross Rental Income: Reduced by GBP21 million to GBP302 million.

• EPRA Earnings: GBP186 million, at the top end of expectations.

• Interim Dividend: Up 2.2%.

• Net Debt to EBITDA: 7.4 times.

• Loan-to-Value (LTV): 34.9%.

• Portfolio Valuation: Up 0.9%.

• NTA per Share: Up 1.4%.

• Total Retail Sales: Up 2.2%.

• ERV Growth: 2.2% in Central London; 1.7% in major retail.

• Administrative Expenses: Reduced by 10%.

• Finance Costs: Increased by GBP3 million.

• New Myer Locations: Four new locations opened.

• Residential Pipeline: Potential to deliver over 6,000 homes by 2030.

• Warning! GuruFocus has detected 5 Warning Signs with LDSCY.

Release Date: November 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Land Securities Group PLC (LDSCY) reported a 3.4% increase in like-for-like net rental income, reflecting strong operational performance.

• The company increased its EPS guidance for the full year, indicating confidence in future earnings growth.

• Occupancy rates have improved, with the London portfolio nearly full and retail occupancy higher than pre-COVID levels.

• Land Securities Group PLC (LDSCY) has a strong balance sheet with a low net debt to EBITDA ratio and a 34.9% loan-to-value, providing room for growth.

• The company has a clear strategic focus on major retail and residential sectors, with plans to invest over GBP1 billion in residential development by 2030.

Negative Points

• Gross rental income decreased by GBP21 million due to non-core asset sales and reduced surrender premiums.

• The cost of completing the Timber Square project increased by GBP31 million, partly due to subcontractor insolvency.

• The mixed-use assets saw a 3.7% decline in value, driven by yield softening in regional offices.

• The company faces potential challenges from higher taxes and political risks, which could impact business sentiment.

• There is a risk of increased long-term interest rates affecting the pace of recovery in the investment market.

Q & A Highlights

Q: Paul May from Barclays asked about Land Securities' leverage compared to US peers and the potential use of equity for expansion. A: Mark Allan, CEO, emphasized managing leverage effectively, focusing on net debt-to-EBITDA and loan-to-value ratios. Vanessa Simms, CFO, highlighted maintaining net debt-to-EBITDA below 8 times and leveraging capital recycling. Allan noted equity issuance would only be considered for scarce, earnings-accretive assets.