(Alliance News) - Great Portland Estates PLC on Wednesday reported lower annual profit as trading property revenue more than halved and gross rental income declined.
The FTSE 250 property investor reported a GBP51.6 million pretax profit for its year ended 31 March, down 8.8% from GBP56.6 million, as revenue fell 8.9% to GBP102.4 million from GBP112.4 million.
Most of this revenue drop consisted of a plunge in trading property revenue to GBP6.4 million from GBP14.4 million and a smaller 2.7% drop in gross rental income to GBP80.7 million from GBP82.9 million.
A final dividend of 7.9 pence per share has been declared, flat year-on-year, lifting the total annual dividend by 3.3% to 12.6p.
Chief Executive Toby Courtauld said: "As we examine the implications for our business, it is clear that we must plan for a recession with an increase in unemployment, leading to reduced occupational demand for space, implying falling rental and capital values. Key to our market's performance will be both the depth of the downturn and the shape of the recovery. Given this uncertainty, we are pausing the provision of guidance on rental value movements until the picture becomes clearer. "
He added: "We have positioned [Great Portland Estates] for any market eventuality; our low leverage is both defensive and gives us significant capacity for growth; our portfolio is virtually fully let, off low rents and has material upside potential from our extensive development pipeline; and our talented team with its deep market knowledge, combined with our financial strength, gives us the ability to choose our path to deliver on all our ambitions."
The company also made a number of other announcements on Wednesday, including that French investment bank Exane SA has pre-let office space at Great Portland's development at 1 Newman Street and 70/88 Oxford Street, W1 in London's West End.
Exane will occupy the fifth, sixth, and seventh floors as well as basement space on three separate 15-year leases.
Great Portland also said it had created a Covid-19 community fund, to which its board and executive committee have contributed.
"The fund will be seeded with more than GBP280,000 raised through a combination of board director bonus reductions and fee waivers to the equivalent of at least 20% of salary or fees for 3 months, along with significant contributions from all the other [Great Portland Estates] executive committee members, and group matching," the firm explained.
On top of this, Great Portland has committed to achieving net zero carbon by 2030. This will involve reducing its energy and carbon intensity at all occupied properties, as well as the embodied carbon in all of its developments, fit-outs and refurbishments.
Shares in Great Portland Estates were down 2.7% at 624.00p in London in morning trading.
By Anna Farley; annafarley@alliancenews.com
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