LONDON, UNITED KINGDOM--(Marketwired - Nov 10, 2015) -  Land Securities Group PLC (LSE: LAND) (OTC PINK: LSGOF)


Forward-looking statements

These half-yearly results, our annual results, the Annual Report and the Land Securities' website may contain certain "forward-looking statements" with respect to Land Securities Group PLC and the Group's financial condition, results of operations and business, and certain of Land Securities Group PLC and the Group's plans, strategy, objectives, goals and expectations with respect to these items and the economies and markets in which the Group operates.

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Half-yearly results for the six months ended 30 September 2015

10 November 2015

"Land Securities continues to deliver the right space at the right time, and it's paying off. Our Retail Portfolio is performing well and leasing levels in our London developments remain strong," said Chief Executive Robert Noel.

"In Retail, our portfolio is focused around our core themes of dominance, experience and convenience. Since the start of the financial year, we have sold selectively, recycling capital into the redevelopment of Westgate, Oxford, and other development opportunities. Operationally we are strong, with retailer sales and footfall up in our shopping centres and voids down.

"In London, we continue to benefit from our well-timed development programme delivering schemes into today's supply constrained market. So far this financial year, a further 500,000 sq ft has been let or is in solicitors' hands. We're focused on completing and letting up the remainder of our committed projects while progressing a future pipeline.

"Our strategy is working and we are well positioned for the future. We have better assets, with higher quality income, and our balance sheet is stronger than ever. We are delivering for our customers, our communities and our shareholders and look forward to the second half of the year with confidence."

Results summary

    30 September 2015   31 March 2015   Change
Valuation surplus(1)   £519.3m   n/a   Up 3.8%(2)
Basic NAV per share   1,416p   1,343p   Up 5.4%
Adjusted diluted NAV per share(3)   1,367p   1,293p   Up 5.7%
Group LTV ratio(1)   26.5%   28.5%    
    6 months ended
30 September 2015
  6 months ended
30 September 2014
Profit before tax   £707.9m   £1,031.1m    
Revenue profit(1)   £184.2m   £170.0m   Up 8.4%
Basic EPS   89.7p   130.6p    
Adjusted diluted EPS(1)   23.2p   21.4p   Up 8.4%
Dividend   16.3p   15.8p   Up 3.2%

1. Including our proportionate share of subsidiaries and joint ventures, as explained in the notes to the financial statements included within the half-yearly results.
2. The % change for the valuation surplus represents the increase in value of the Combined Portfolio over the six month period, adjusted for net investment.
3. Our key valuation measure.


  • £17.2m of development lettings
  • £17.0m of investment lettings
  • Acquisitions, development and refurbishment expenditure (including trading properties) of £317.3m
  • Disposals (including trading properties) of £406.5m
  • Supported 85 disadvantaged people into sustainable jobs in the communities where we operate through our Community Employment Programme


  • Ungeared total property return 5.9%, underperforming the IPD Quarterly Universe at 6.8%
  • Total business return (dividends and adjusted diluted NAV growth) of 7.0%
  • Combined Portfolio valued at £14.6bn, with a valuation surplus of 3.8%
  • Valuation surplus of properties in the development programme of 6.8%
  • Revenue profit £184.2m, up 8.4%
  • Voids in the like-for-like portfolio remain low at 2.8% (31 March 2015: 3.2%)


  • Group LTV ratio at 26.5%, based on adjusted net debt of £4.0bn
  • Weighted average maturity of debt at 8.3 years
  • Weighted average cost of debt at 4.6%
  • Cash and available facilities of £1.4bn
  • First half dividend of 16.3p, up 3.2%


  • 1.4m sq ft being delivered in London over the next 12 months
  • 0.8m sq ft Westgate, Oxford, due to open in October 2017
  • 1.4m sq ft of retail development and extension opportunities including Ealing Filmworks, Selly Oak, Birmingham, Buchanan Galleries, Glasgow, and White Rose, Leeds
  • 1.2m sq ft future London pipeline including 21 Moorfields, EC2, Nova East, SW1, 1 Sherwood Street, W1 and Portland House, SW1


  • Winner of the Business in the Community Work Inclusion Award
  • Maintained EPRA gold status for sustainability reporting and membership of FTSE4Good and the Dow Jones Sustainability Index
  • Achieved ISO 50001 certification for energy management
  • Re-certification of ISO 14001 for environmental management

All measures above are presented on a proportionate basis, as explained in the notes to the financial statements included within the half-yearly results

Chief Executive's statement

We have continued to execute our strategy, achieving good progress on lettings in London, enhancing our Retail Portfolio and strengthening the balance sheet.

Once again, we funded high levels of activity by recycling capital rather than increasing debt. This approach is providing us with better assets, higher quality income and lower financial gearing as we move through the cycle. Over the six months, we invested £317.3m in acquisitions, development and refurbishment and completed disposals of £406.5m.

Our actions during the half-year enabled us to build on last year's exceptionally strong performance. We increased revenue profit by 8.4% compared to the same period last year. Adjusted diluted NAV per share was up 74p at 1,367p - an increase of 5.7%. The second quarterly dividend is 8.15p, making the first half dividend 16.3p - up 3.2% on the comparative period. Total business return for the six months was 7.0%.

In Retail, we have continued to shape the portfolio to suit changing customer expectations, pursuing our strategic themes of dominance, experience and convenience. In the first half we started construction of our development at Westgate, Oxford. This 800,000 sq ft shopping centre, being built in joint venture with The Crown Estate, will open in October 2017. We made progress on potential developments at Ealing Filmworks and Selly Oak, Birmingham. We completed £43.6m of disposals in the period and, since 1 October, we have exchanged contracts to sell a further £273.6m of non-core assets.

In London, we have continued to deliver exceptional work environments into a supply-constrained market. At the beginning of the financial year, we had 1.1m sq ft of space to let in our development schemes. 500,000 sq ft of that space is now let or in solicitors' hands and the remainder is well matched to customer demand. We made one acquisition, purchasing the 50% interest we did not already own at 6-17 Tottenham Court Road, W1, and £362.9m of disposals including Times Square, EC4. We also exchanged contracts to sell Haymarket House, SW1, for £155.2m and this sale will complete in the second half. We continue to progress a pipeline of future development opportunities in the capital.

Operationally, it is a busy time for the business, with over 3,000 people working on our construction sites. I am pleased to report that our highly acclaimed Community Employment Programme has so far enabled 668 of London's most disadvantaged people to train for a trade on and around our sites, and subsequently enter the construction industry. In July, this was recognised with the 2015 Business in the Community award for 'Work Inclusion'. We are now replicating the programme at Westgate, Oxford.

In the second half, we expect rental value growth to remain positive for our assets. We continue to track and assess new development opportunities both inside and outside our current portfolios but, as we have previously indicated, we will not commit to further developments without substantial pre-lets. We are likely to be net disinvestors in the second half of the year as a result of some £565m of disposals we have agreed but not yet completed. For these reasons, both operational gearing as measured by the amount of speculative space we have to let, and financial gearing as measured by loan-to-value, are likely to be lower in March 2016. 

Robert Noel
Chief Executive

Financial review

Overview and headline results

Over the six months ended 30 September 2015, we delivered a profit before tax of £707.9m, compared with £1,031.1m for the same period last year, primarily due to a reduction in the valuation surplus from £880.2m to £519.3m (including our proportionate share of subsidiaries and joint ventures). Basic earnings per share were 89.7p compared with 130.6p. Underlying earnings were up; revenue profit was £184.2m compared with £170.0m in the comparative period and adjusted diluted earnings per share increased to 23.2p from 21.4p.

Our Combined Portfolio increased in value from £14.0bn at 31 March 2015 to £14.6bn principally as a result of our valuation surplus of £519.3m. Net assets per share increased by 5.4% to 1,416p at 30 September 2015. Adjusted diluted net assets per share were up by 5.7% over the six months, increasing from 1,293p to 1,367p. This 74p increase in adjusted diluted net assets per share together with the dividends paid in the period represents a 7.0% total business return.

Presentation of financial information

A number of our financial measures include the results of our joint ventures and subsidiaries on a proportionate basis. Measures that are described as being presented on a proportionate basis include the Group's share of joint ventures on a line-by-line basis, and are adjusted to exclude the non-owned elements of our subsidiaries. This is in contrast to the Group's statutory financial statements, where the Group's interest in joint ventures is presented as one line on the income statement and balance sheet, and all subsidiaries are consolidated at 100% with any non-owned element being adjusted as a non-controlling interest or redemption liability, as appropriate. Our joint operations are presented on a proportionate basis in all financial measures.

Revenue profit

Revenue profit is our measure of underlying pre-tax profit, which is used internally to assess the Group's income performance. It excludes all items of a capital nature, such as valuation movements and profits and losses on the disposal of investment properties, as well as one-off items. A full definition of revenue profit is given in the glossary. The main components of revenue profit are presented on a proportionate basis in the table below and a more detailed reconciliation of revenue profit to our IFRS profit before tax is included in note 3 to the financial statements.

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