(Alliance News) - British Land Co PLC on Wednesday posted an interim loss and declared a much reduced dividend, the property developer's first payout since the start of the Covid-19 pandemic.
British Land shares were 3.7% lower at 492.30 pence each in London on Wednesday morning, one of the worst blue-chip performers.
British Land said its EPRA net tangible assets fell 10% to 693p at September 30 from 773p at March 31.
British Land posted a widened pretax loss of GBP757 million for the half-year to September 30 from GBP440 million a year ago. Revenue came in 22% lower year-on-year at GBP255 million from GBP328 million.
"Today, despite the unprecedented situation brought about by Covid, our business is more financially resilient, our focus on mixed use London campuses is clear and we have an unrivalled pipeline of opportunities. We are closer to our customers and our expertise in creating and managing space that reflects their needs has never been more important," said Chief Executive Officer Chris Grigg
Grigg departs from the role on Wednesday, replaced by finance chief Simon Carter.
British Land's portfolio value dropped 7.5% to GBP10.32 billion from GBP11.16 billion at the end of March, with occupancy dipping to 95.1% from 96.6%.
Most of the British Land's assets are in the office and retail sectors, among those worst-hit by stay-at-home measures implemented due to Covid-19.
"The value of the offices portfolio was down 3.1%, primarily due to concerns about future occupier demand, given the uncertainty of economic outlook and potential changes due to Covid-19," British Land explained.
Its retail portfolio had a valuation drop of 15%, driven by tumbling consumer sentiment and rises in company voluntary arrangements and administrations.
More positively, the company confirmed it will be resuming dividend payments with an interim payout of 8.4p. British Land back in March decided to suspend dividend payments, given the uncertain outlook, but said it has been "reassured" by the productivity of its assets when restrictions were relaxed.
The 8.4p payout is, however, a 47% chop from 15.97p a year earlier.
British Land said it had resumed dividend payments on the basis of a fixed percentage payout of underlying earnings. Underlying earnings per share declined 35% to 10.5p in the first half from 16.1p a year before. Underlying profit fell 30% to GBP107 million from GBP152 million.
Also promising was a largely upward trend in rent collection levels. For the September quarter, which has rent due until November 10, British Land has received 77% - 97% from its office assets and 62% in retail.
For the June quarter, it received 81% and in the March quarter, it received 68%.
"Our first half results naturally reflect the challenges in retail. Against this backdrop, we remain focused on active asset management, working to maximise rent collection and keeping our units occupied with successful retailers. There is a clear preference from shoppers and retailers for out of town, open air retail parks. Our approach and attractive asset mix means that prior to the November lockdown, we were delivering significant outperformance on footfall and retailer sales and a steady improvement in rent collection levels," said incoming CEO Carter.
He added: "Investors are increasingly taking a similar long term perspective, looking through Covid, to acquire prime London offices at pricing close to pre-pandemic levels."
Also on Wednesday, the company said it completed the sale of Clarges Mayfair to Deka for GBP177 million, 7.6% above the September valuation.
The central London site, bought in 2012 before being redeveloped in 2017, had 50,000 square feet of office space, 34 "super prime" residential apartments and 15,000 square feet of retail.
"It is an excellent example of creating value through the strength and depth of our capabilities, across planning, development, asset management, leasing and investment," British Land said.
By Eric Cunha; ericcunha@alliancenews.com
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British Land (BLND)