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(Alliance News) - Capital & Regional PLC on Thursday reported sharply lower interim profit, though revenue grew on the back of improved occupancies and higher rent collection.
Releasing its latest first-half financial results, the company also said it has agreed to buy the Gyle Shopping Centre in Edinburgh for GBP40 million, excluding acquisition costs.
The deal will be financed through existing funds held by the company, a new debt facility of GBP16 million and about GBP25 million of gross proceeds from a fully underwritten open offer.
The London-based real estate investment trust focused on community shopping centres plans to raise around GBP23.4 million from an open offer of 46.3 million new shares at 54 pence per share on the basis of 4 new shares for every 15 existing shares held.
In a separate statement on Thursday, Growthpoint Properties Ltd said it had underwritten Capital & Regional's share offer and will fund its commitment from its existing debt facilities.
Shares in Capital & Regional were 0.7% lower at 56.69 pence on Thursday morning in London. They were flat at ZAR13.25 in Johannesburg. Growthpoint was up 0.3% at ZAR13.05 in Johannesburg.
For the six months that ended June 30, Capital & Regional said pretax profit plunged to GBP4.9 million from GBP18.9 million a year before.
Profit on ordinary activities before financing was just GBP8.7 million, down steeply from GBP22.6 million previously. Revenue rose by 7.7% to GBP30.7 million from GBP28.5 million.
Like-for-like net rental income increased by 13%, driven primarily by improved occupancy and rent collection. But total net rental income fell by 4.9% to GBP11.7 million from GBP12.3 million, reflecting the like-for-like improvement largely offsetting the loss of income from the sale of Blackburn in August 2022.
The occupancy rate improved to 94.5% as at June 30 from 93.8% a year before. At December 31, occupancies stood at 94.1%.
Rent collection was in line with historic pre-Covid levels, with 98.4% collected for the first half of 2023.
Capital & Regional declared an interim dividend of 2.75p, down 10% from 2.50p a year before.
As at June 30, net asset value per share was 106p, 10% down from 118p.
"Our community strategy's focus on value orientated, non-discretionary and needs based retail and services has driven another period of robust operational performance for the company, against an uncertain and inflationary economic backdrop," Capital & Regional Chief Executive Lawrence Hutchings said.
The property firm said the Gyle shopping centre acquisition presented it with a number of asset management opportunities, including refining the tenant mix, a renewed focus on leasing to improve occupancy and income, while enhancing the centre's appeal to the growing and affluent catchment in south western Edinburgh.
Capital & Regional said it would continue to explore selective opportunities like the Gyle to grow its business.
By Artwell Dlamini, Alliance News reporter
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