(Alliance News) - Shaftesbury PLC on Tuesday reported a widened interim loss as lockdowns crippled activity in London's West End, but the property landlord's outlook was upbeat following the easing of virus restrictions.
It held off on a full dividend payout for now, however.
Net property income fell 43% to GBP26.5 million in the six months to March 31 from GBP46.2 million a year before, due to occupier support, reduced rent collections, and increased vacancy in the period, with rental income down 19% on a like-for-like basis. Shaftesbury's pretax loss widened to GBP338.5 million from GBP287.6 million.
Shaftesbury is a real estate investment trust focused on London's West End shopping and theatre district.
EPRA net tangible assets per share were GBP5.83 at the period-end, down 22% from GBP7.43 at the end of September and 34% from GBP8.78 at the end of March a year ago.
However, Shaftesbury said that, following 15 months of disruption, the phased lifting of virus restrictions is already resulting in a return of confidence and activity. Footfall and spending are recovering, it said, while hospitality and retail businesses have reopened.
"Since the start of re-opening on 12 April, we are seeing an encouraging increase in demand for space and lettings and a return of footfall and spending across our locations. Forecasts point to a sharp rebound in the UK economy, but there remains the risk that the recovery could encounter delays and setbacks in the period ahead," said Chief Executive Brian Bickell.
He added: "As the global pandemic recedes, we are confident that the unique appeal and features of London and the West End will continue to attract businesses and visitors on a scale matched by few other cities, underpinning the long-term resilience and prospects of our portfolio."
Shaftesbury said its EPRA vacancy rate stood at 11.9% on March 31, improving to 11.3% six weeks later. Space under offer also has improved, from 3.5% at the end of March to 4.1% more recently.
Shaftesbury declared an interim dividend of 2.4p, versus nothing a year ago. It said this small payment was to fulfil its property income distribution requirements as a tax-exempt REIT for the financial year that ended September 30, 2020.
A return to more generous payouts will need to wait.
"While macro uncertainty persists, and our operating cash inflows are reduced, we will continue to prioritise the preservation of liquidity. However, our intention is to resume dividend payments as soon as we consider prudent, in line with our policy of sustainable dividend growth over the long term," the firm said.
In financial 2019, Shaftesbury paid a total of 17.7p.
Andy Murphy, a director at research house Edison Group, said Shaftesbury's half-year results were "sub optimal".
"A rebound is expected, but there are still risks that the recovery may not happen as quickly as Shaftesbury would like," Murphy said.
Shaftesbury shares were down 0.6% to 595.00 pence early Tuesday, while the wider FTSE 250 index was up 0.3%.
By Tom Waite; thomaslwaite@alliancenews.com
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