SHB.L Share News (SHB)

(Sharecast News) - West End landlord Shaftesbury scrapped its final dividend as it said almost half of rents due for the second half had been waived or were still due amid the Covid-19 crisis.
The company which owns 16-acres of prime shopping and retail property in the heart of the capital, said £13m in rent had been waived for the six months to September 28, with a further £15.1 outstanding by September 11 as the Covid-19 lockdowns hit revenue.

Commercial landlords have been hit hard by the pandemic, with shops shuttered between late-March and mid-June. New restrictions were introduced by the government this week amid fears that a second full lockdown could be imminent.

Most of Shaftesbury's 611 restaurants, cafes, pubs and shops had now reopened, with the company adding that 41% of rent due had been collected and another 10% was expected to be subject to deferred collection arrangements.

Shaftesbury's EPRA vacancy rate at August 31 was 9.7% of rental value, compared to 4.8% at the end of March.

Residential was "unusually high", accounting for 46% of the increase, as occupiers from overseas returned to their countries of origin and demand from long-stay international business and leisure travellers halted.

Shaftesbury said UK international business and leisure visitor numbers were not expected to recover to pre-pandemic levels until 2024, due to their greater reliance on long-haul markets.

"The improvement since July was initially due to a return of local and domestic day visitors, and has been supplemented by the recent gradual return of the local office-based workforce," it said on Friday.

"Daily visits to the West End, which are currently approaching 50% of normal pre-pandemic volumes on the busiest days, are concentrated in the lunchtime to early evening period. It is too early to assess the impact of recently announced restrictions on the progress we have seen to date."

Shaftesbury's chief executive Brian Bickell said the course of the pandemic in the short and medium term would continue to dictate the level of restrictions imposed by the UK and other governments, with implications for the global economy and the pace of recovery.

"As an international destination, local trading conditions in the West End will inevitably be affected by these macro uncertainties," he added.

Analysts at Liberum slashed their target price on the stock to 610p from 760p and lowered earnings estimates, citing a slower recovery in revenue than anticipated.

"We had simplified the revenue charge of waived rent by reducing full-year 2020 like-for-like revenue by 13%, or £16m vs £13m (in) contracted rents waived so far," they said in a note to clients.

"We now assume no 'bounce-back' of this amount in full-year 2021. This combination reduces our 2021 and 2022 earnings per share by 20% and 17% to 14.0p and 16.1p, respectively."