(Alliance News) - Shaftesbury PLC on Tuesday reported a severe swing to a loss for its most recently ended financial year, highlighting the economic damage inflicted on London's West End by the Covid-19 pandemic.
Shares in Shaftesbury were down 4.6% at 524.00 pence on Tuesday in London, the second worst performer in the FTSE 250 index of mid-caps.
For the year to the end of September, the London West End-focused real estate investment trust reported a pretax loss of GBP699.5 million, compared to a profit of GBP26.0 million the year before.
This was due to a deficit on the net revaluation on investment properties of GBP698.5 million, widened from GBP15.3 million the prior year.
In addition, net property income dropped by 24% year-on-year to GBP74.3 million from GBP98.0 million, resulting from a 3.5% like-for-like decrease in rental income, and added charges for expected credit losses and impairments of GBP21.9 million.
Shaftesbury reported a net asset value per share of GBP7.43 as at September 30, down 24% on GBP9.82 a year ago. The firm said its portfolio valuation decreased on a like-for-like basis by 18% to GBP3.1 billion over the year.
In late September, Shaftesbury had said that, due to its current trading conditions and the risk of further restrictions in the coming months as Covid-19 cases start rising again, it would not declare a final dividend for the year.
Shaftesbury paid no interim dividend for the year either, meaning that the group made no annual payout, compared to 17.7 pence per share the year before.
Looking ahead, Shaftesbury said pandemic control measures are likely to remain for most of 2021, however the impact is reducing, with a gradual return of local and domestic footfall as confidence returns.
On Monday, that suffered a setback, however, when the UK government announced that London, parts of Essex and Hertfordshire will enter Tier 3 restrictions from Wednesday, following "very sharp, exponential rises" in cases.
Shaftesbury said it anticipates "further measures to support our occupiers will be required as trading conditions will be severely impacted during the important period leading up to Christmas and over the New Year, having already been disrupted by the second lockdown."
The company said rent collections have been significantly below normal levels, with cash collections in the second half of its financial year representing only 53% of contracted income.
"Rarely in history has the world seen such widespread disruption to normal patterns of life. Only now are we seeing the first positive signs that conditions will begin to improve in the year ahead," said Chief Executive Brian Bickell.
"The pandemic has had a significant impact on our performance, particularly during the second half of the financial year, depriving our hospitality and retail occupiers of footfall and trade and resulting in reduced rent collections, increased vacancy, reduced occupier demand and a fall in property valuations. Our key priority has been, and continues to be, supporting our occupiers through this period of disruption," Bickell added.
Also on Tuesday, Shaftesbury said it has appointed Ruth Anderson as non-executive director with effect on Monday next week.
Anderson is currently non-executive director at thread manufacturer Coats Group PLC. Her most recent executive role was as a partner at accounting firm KPMG, leaving as vice chair in 2009.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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