Annual Results Year Ended 31 March

Wednesday, 16 May 2012

"Land Securities has made good progress in a year impacted by rising economic uncertainty. We have maintained focus on delivering against our plan and enter the new financial year on a strong financial footing."


Results summary


31 March 2012

31 March 2011



Valuation surplus (1)





Basic NAV per share  




Up 4.1%

Adjusted diluted NAV per share (2)



Up 4.5%


Group LTV ratio (1)





Profit before tax



Down 58.0%


Revenue profit (1)



Up 9.0%


Basic EPS



Down 58.4%


Adjusted diluted EPS (3)



Up 8.5%





Up 2.8%


1. Including share of joint ventures

2. Our key valuation measure

3. Now excludes profits on disposal of trading properties and long-term development contracts. The comparative has been adjusted accordingly.

Resilient performance in uncertain markets

  • Total business return (dividends and adjusted NAV growth) of 7.9%
  • Ungeared total property return 7.7%, outperforming IPD Quarterly Universe at 6.3%
  • Combined portfolio valued at £10.3bn, with a valuation surplus of 2.0% in the year
  • Valuation surplus on properties in the development programme of 8.2%
  • Property disposals of £905.7m at an average of 4.3% above March 2011 valuation
  • Rental values up 1.2% across total like-for-like portfolio since March 2011
  • Revenue profit up 9.0% to £299.4m
  • Recommended increase in final dividend to 7.4p (from 7.2p)

Asset management strengthening portfolio

  • £39.1m of investment lettings in the year, £1.2m of conditional lettings and £10.2m in solicitors' hands
  • Voids in like-for-like portfolio reduced to 3.1% (4.1% at 31 March 2011)
  • Since 2010, we have created 47,700 sq m of new space for Primark, the John Lewis Partnership and Sainsbury's
  • Longer weighted average unexpired lease term across the like-for-like portfolio, completed developments and acquisitions of 9.2 years (31 March 2011: 8.9 years)

Well managed development pipeline

  • £12.8m of development lettings in the year and £3.9m in solicitors' hands
  • 110 Cannon Street, EC4 and Arundel Great Court, WC2 sold
  • Residential apartments at Wellington House, SW1 100% pre-sold
  • Joint venture formed on Victoria Circle, SW1
  • Trinity Leeds development 72.0% pre-let or in solicitors' hands and 185-221 Buchanan Street, Glasgow 91.8% pre-let
  • On site at 102,200 sq m of development schemes in Retail, with a further 153,100 sq m of future developments with planning consents obtained or planning applications submitted
  • On site at 111,180 sq m of development schemes in London, with a further 175,370 sq m of future developments with planning consents obtained or planning applications submitted

Strong financial structure

  • Group LTV ratio including share of joint ventures at 38.0%, which will reduce to 33.4% on receipt of proceeds from disposals already recognised
  • Successful refinancing of £1.1bn revolving credit facility
  • Interest cover of 2.5 times
  • Dividend cover of 1.3 times
  • Cash and undrawn facilities of £1.2bn

Commenting on the results, Land Securities Chief Executive Robert Noel, said:

"We have a clear strategy allied to a clear plan based on a realistic outlook. Despite economic uncertainty impacting the second half of the year, we have maintained our focus, building on our strength and our proposition.

"We have a deep knowledge of our core markets and an expert, focused team. The outlook remains uncertain but we will continue to use the competitive advantage offered by our financial resources to deliver on our plans and exploit opportunities as they arise."

North East regional perspective:

Gerald Jennings, portfolio director at Land Securities, owners of the Bridges, said: "The centre has had a good start to the year with more than six million shoppers passing through our doors already.

"Our priority as a property owner is to ensure we have the right space and environment for our retailers to trade in and we deliver the right mix of retailers for our shoppers so we can sustain footfall in the centre.

"Looking further ahead into 2012 I am confident that it will be a good year for the Bridges. We're thrilled that Superdry has decided to open a store in Sunderland for the very first time. The 4,655 sq ft shop will open this summer and it is a real confidence boost for Sunderland as a whole as it demonstrates the potential that a leading high street fashion brand sees in the city.

"The construction of our £15million, 60,000sq ft Primark expansion is making tremendous progress and we look set to hand over the development to Primark for the shop fit, on schedule, this summer. When the expansion is complete it will transform the Bridges and positively impact a key part of the city centre.

"Topshop and Topman is currently undergoing a massive transformation into a much larger 8,000sq ft store which is due to open shortly. This again is testament to the centre's loyal shoppers and how committed we are as a landlord to ensuring our retailers have the space and location they need to trade well now and are best placed for the future.

"We do need to acknowledge that it's not going to be plain sailing for retailers this year but there are currently a number of really positive talks with new, leading high street retailers and we look forward to announcing new deals shortly.

"There's a lot of positivity in Sunderland at the minute. Take for example the fact that the bridge is now going to become a reality thanks to the Department for Transport confirming the £82.5million grant towards the cost earlier this year. Five construction firms are now lined up to bid for the chance to build the bridge and the new crossing could be open to traffic as early as 2015. It is estimated that it will unlock 6,000 jobs and return £4 to every £1 it costs to build.

"We've also had the fantastic news that Nissan will be building the new Invitation model in Sunderland. The investment is a boost for jobs at Nissan's plant as well as the wider supply chain and it goes a long way to demonstrate the business confidence in Sunderland and the level of inward investment that is taking place.

"Also just today plans have been announced to transform the city's derelict fire station into a multimillion-pound arts venue in the heart of Sunderland. Plus we have world-class artists like Coldplay and Bruce Springsteen lined up to play gigs at the Stadium of light and we mustn't forget the annual Sunderland Air Show. Now in its 24th year it is widely recognised as one of the largest free events of its kind.

"There are great things happening in the city. Land Securities is excited to be here and very proud to be in a position to expand and continually improve the retail mix within our centre which all helps help bring future prosperity and jobs to Sunderland."