Capital & Regional dividend growth limited by retailer CVAs

(Sharecast News) - Capital & Regional saw the net asset value of its seven shopping centres dip in the first half of the year and said it expects full year dividend growth to be at the low end of its target range.Valuation of the group's wholly-owned portfolio of £883.4m at 30 June was 0.4% lower in the six months from December, with net asset value per share of 66p, which was down 2.9% over six months.The dip in the value of the portfolio led to a total revaluation loss, net of capex and joint ventures, of £12.4m, resulting in a near halving of IFRS profit for the period to £6.7m from £12.1m.But Capital & Regional, which owns shopping malls in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green and has a 20% joint venture share of the Kingfisher Centre in Redditch, said if you excluded property revaluations and exceptional items, adjusted profits were up 6.9% to £15.5m, with adjusted earnings per share up 4.4% to 2.15p.Net rental income on its seven core centres of £26.0m was £1m higher than the same period a year ago, thanks to like for like rental growth of 1.3%. Contracted rent of £62.3m was little changed from a year ago, as 44 new lettings and renewals were completed in the period at a combined average premium of 3.4% to previous passing rent and a 3.3% premium to estimated rental value.The board hiked the interim dividend 5.2% to 1.82p per share and chief executive Lawrence Hutchings said that given the short-term impact of recent profile retail wobbles, CVAs and administration, the board expects full year dividend growth in 2018 to be at the low end of its medium-term target range of 5-8% per year."We remain confident that the combination of our in-house expertise and the strength and affordability of our underlying assets will enable us to successfully remerchandise and evolve our centres to maintain positive momentum," said Hutchings, adding that his cost efficiency programme was "on track" to meet the 2016 target of at least £1.8m of annualised savings by the end of this year.