British Land Co PLC (BRLAF) (H1 2025) Earnings Call Highlights: Resilient Performance Amid ...

GuruFocus News
4 min read

In This Article:

  • Underlying Profit: GBP143 million, up 1%.

  • Earnings Per Share (EPS): 15.3p, up 1%.

  • Dividend: 12.24p per share, up 1%.

  • Net Tangible Assets (NTA): 567p per share, up 1%.

  • Pro Forma Loan-to-Value (LTV): 37.8%.

  • Pro Forma Group Net Debt to EBITDA: 7.4 times.

  • Gross Rental Income: Down 3% due to disposals.

  • Net Rental Income Margin: 91.6%.

  • Administrative Expenses: Decreased to GBP41 million.

  • Net Finance Costs: Down GBP10 million.

  • Like-for-Like Growth: 3.8% on campuses, 2% in retail and logistics.

  • Retail Park Occupancy: 99%.

  • Property Valuations: Retail parks up 5%, campuses down 1.7%.

  • Equity Placing: GBP301 million, 3.6% discount to share price.

  • Development Pipeline: 1.9 million square feet in urban logistics.

  • Capital Activity: GBP3.7 billion over four years, including GBP2.1 billion disposals and GBP1.1 billion acquisitions.

  • Interest Rate: Weighted average at 3.5%.

  • Total Accounting Return: 2.8% for the period.

Release Date: November 20, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • British Land Co PLC (BRLAF) reported a 1% increase in underlying profit to GBP143 million, demonstrating resilience despite significant development activity.

  • The company achieved a high occupancy rate of 99% in retail parks, driving ERV growth of 3.7% in the first half.

  • British Land Co PLC (BRLAF) has successfully reshaped its portfolio, with 93% now in preferred sectors, following GBP3.7 billion of capital activity over the last four years.

  • The company has a strong development pipeline, with GBP1.8 million square feet of best-in-class workspace set to deliver over the next three years.

  • British Land Co PLC (BRLAF) maintains a robust balance sheet with GBP1.6 billion of undrawn facilities and cash, ensuring no refinancing is needed until early 2027.

Negative Points

  • Gross rental income decreased by 3% due to the disposal of Meadowhall and the surrender of a lease at Triton Square.

  • Pro Forma LTV increased by 50 basis points to 37.8%, indicating a rise in leverage.

  • Property operating expenses increased by GBP5 million compared to the previous year.

  • The company faces potential covenant risks in retail, as highlighted by the administration of Carpetright.

  • Despite positive earnings growth, the total accounting return was 2.8%, below the target range of 8% to 10%.

Q & A Highlights

Q: Why is the Thurrock site considered a longer-term development potential rather than short-term? A: Kelly Cleveland, Head of Real Estate and Investment, explained that Thurrock is a retail park with alternate use potential. The company is evaluating options and has the flexibility to decide on timing for development.

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