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British Land Company PLC Full Year Results

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idpickering
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British Land Company PLC Full Year Results

#415199

Postby idpickering » May 26th, 2021, 7:23 am

Performance summary

· Financial performance reflects the impact of Covid-19

· Underlying profit reduced 34.3% primarily reflecting an increase in provisions for rent receivables

· 83% of FY21 rent collected. 99% Offices; 71% Retail

· Portfolio value down 10.8%; Offices down 3.8%, with moderate decline of 0.8% in the second half; Retail down 24.7% with the rate of decline slowing in Retail Parks; Developments broadly flat

· EPRA Net Tangible Assets (NTA) reduced 16.3% to 648p

· Strong and flexible balance sheet

· £556m retail assets sold since April 2020, 7.0% ahead of book value

· £643m of standalone offices sold, 5.2% ahead of book value

· £1.8bn undrawn facilities and cash with no requirement to refinance until early 2025

· LTV down 200bps at 32%; 46% headroom to Group debt covenants

· FY21 dividend of 15.04p per share, representing 80% of underlying EPS, in line with our new policy

· Fitch Ratings affirmed unsecured credit rating at 'A'

And later;

Outlook & dividend

In October, we announced a new dividend policy, setting the dividend at 80% of Underlying EPS. This policy ensures dividends reflect the impact of development completions, acquisitions, disposals and trading conditions as they change over time and maximises future strategic and financial flexibility. We are pleased to announce a full year dividend of 15.04p with the payment of our final dividend in August 2021.

In October we announced the intention to resume paying dividends semi-annually, calculated at 80% of Underlying EPS based on the most recently completed six-month period. Applying this policy, the Board are proposing a final dividend for the year ended 31 March 2021 of 6.64p per share. Payment will be made on Friday 6 August 2021 to shareholders on the register at close of business on Friday 25 June 2021. The dividend will be a Property Income Distribution and no SCRIP alternative will be offered.


https://www.investegate.co.uk/british-l ... 00067998Z/

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Re: British Land Company PLC Full Year Results

#415212

Postby funduffer » May 26th, 2021, 8:13 am

So at 15.04p for the year, and a share price of £5.196, I make that a yield of 2.9%, and an approximate halving of the dividend since pre-pandemic days.

Not really a HYP share any more is it?

None of the other REIT's stand out as particularly high yield either, perhaps not surprising after the pandemic.

I shall probably continue to hold and see if it can generate some dividend increases next year, and maybe add another REIT, as the BLND holding is pretty small in my HYP. Maybe have a look at the current HYP favourites - PHP & BBOX, or something else in this sector.

FD

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Re: British Land Company PLC Full Year Results

#415378

Postby Gengulphus » May 26th, 2021, 6:19 pm

funduffer wrote:So at 15.04p for the year, and a share price of £5.196, I make that a yield of 2.9%, and an approximate halving of the dividend since pre-pandemic days.

Not really a HYP share any more is it?

It's still in my HYP, having been bought when its yield was high enough, so it's still a HYP share by this board's definition.

But I think you mean something like "No longer a candidate for a new holding in a HYP, is it?", and that's something I would agree with.

Gengulphus

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Re: British Land Company PLC Full Year Results

#416177

Postby Wizard » May 30th, 2021, 9:34 am

funduffer wrote:So at 15.04p for the year, and a share price of £5.196, I make that a yield of 2.9%, and an approximate halving of the dividend since pre-pandemic days.

Not really a HYP share any more is it?

None of the other REIT's stand out as particularly high yield either, perhaps not surprising after the pandemic.

I shall probably continue to hold and see if it can generate some dividend increases next year, and maybe add another REIT, as the BLND holding is pretty small in my HYP. Maybe have a look at the current HYP favourites - PHP & BBOX, or something else in this sector.

FD

This is a company for which the pandemic may well have a long term impact, rather than it being a short term blip. IIRC there are also rules that govern the level of dividend and limit the ability of Directors to choose the dividend level. If the dividend is down it is, in this case ar least, a true reflection of the pandemic's impact and not just a change hiding behind the dividend. Maybe it will mark a step down in business value or maybe it won't, at this stage I am holding on to see how it pans out longer term.

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Re: British Land Company PLC Full Year Results

#416195

Postby Arborbridge » May 30th, 2021, 10:45 am

Wizard wrote:This is a company for which the pandemic may well have a long term impact, rather than it being a short term blip. IIRC there are also rules that govern the level of dividend and limit the ability of Directors to choose the dividend level. If the dividend is down it is, in this case ar least, a true reflection of the pandemic's impact and not just a change hiding behind the dividend. Maybe it will mark a step down in business value or maybe it won't, at this stage I am holding on to see how it pans out longer term.



Indeed - we have yet to see which way this property "thing" goes. There are arguments and noises in both directions, but at present it seems that too much office space may be available for the near future. However, there is copious office invesment going on , rather surprisingly, of which around 50% is in refurbishments.
Brit Land will hopefully adapt its offering to the new landscape (smaller, more appropriate types of space), and I am also pretty sure that we haven't seen the end of people wanting to work together in a group, face to face. That depends to whom one listens - some bosses reckon their staff function better working from home, others are saying the opposite.

As I've said before, although a sector might have life, it does not mean that one's particular company will succeed. So we are right to hedge our bets and invest in other shares - eg PHP, BBOX and perhaps a company letting small offices. And the rumour of the death of real shopping is premature, so there's another property angle.

Arb.

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Re: British Land Company PLC Full Year Results

#416204

Postby Wizard » May 30th, 2021, 11:31 am

Arborbridge wrote:
Wizard wrote:This is a company for which the pandemic may well have a long term impact, rather than it being a short term blip. IIRC there are also rules that govern the level of dividend and limit the ability of Directors to choose the dividend level. If the dividend is down it is, in this case ar least, a true reflection of the pandemic's impact and not just a change hiding behind the dividend. Maybe it will mark a step down in business value or maybe it won't, at this stage I am holding on to see how it pans out longer term.



Indeed - we have yet to see which way this property "thing" goes. There are arguments and noises in both directions, but at present it seems that too much office space may be available for the near future. However, there is copious office invesment going on , rather surprisingly, of which around 50% is in refurbishments.
Brit Land will hopefully adapt its offering to the new landscape (smaller, more appropriate types of space), and I am also pretty sure that we haven't seen the end of people wanting to work together in a group, face to face. That depends to whom one listens - some bosses reckon their staff function better working from home, others are saying the opposite.

As I've said before, although a sector might have life, it does not mean that one's particular company will succeed. So we are right to hedge our bets and invest in other shares - eg PHP, BBOX and perhaps a company letting small offices. And the rumour of the death of real shopping is premature, so there's another property angle.

Arb.

I also am somewhat comforted by the fact surplus office space could be converted to residential under permitted development rights, so there is a potential exit route for any surplus office space.

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Re: British Land Company PLC Full Year Results

#416229

Postby Gengulphus » May 30th, 2021, 1:41 pm

Wizard wrote:IIRC there are also rules that govern the level of dividend and limit the ability of Directors to choose the dividend level.

There are certainly rules that limit the ability of directors to choose the level of the PID element of the dividend. But REITs can also pay ordinary non-PID dividends and many do - for example, Segro's habit is to pay an ordinary interim and a PID final, and British Land's has been to pay mainly PIDs, but occasionally pay its final as half ordinary, half PID.

I'm not aware of anything that limits the ability of REIT directors to choose the level of the non-PID element of the dividend, beyond the general limit that applies to all companies of not distributing more than their distributable reserves to shareholders. I may have missed something, of course, but unless I have, that means that REIT directors are subject to a lower limit on their total dividends but no more subject to upper limits than directors of other companies.

Gengulphus

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Re: British Land Company PLC Full Year Results

#417407

Postby Charlottesquare » June 4th, 2021, 9:39 pm

Wizard wrote:
Arborbridge wrote:
Wizard wrote:This is a company for which the pandemic may well have a long term impact, rather than it being a short term blip. IIRC there are also rules that govern the level of dividend and limit the ability of Directors to choose the dividend level. If the dividend is down it is, in this case ar least, a true reflection of the pandemic's impact and not just a change hiding behind the dividend. Maybe it will mark a step down in business value or maybe it won't, at this stage I am holding on to see how it pans out longer term.



Indeed - we have yet to see which way this property "thing" goes. There are arguments and noises in both directions, but at present it seems that too much office space may be available for the near future. However, there is copious office invesment going on , rather surprisingly, of which around 50% is in refurbishments.
Brit Land will hopefully adapt its offering to the new landscape (smaller, more appropriate types of space), and I am also pretty sure that we haven't seen the end of people wanting to work together in a group, face to face. That depends to whom one listens - some bosses reckon their staff function better working from home, others are saying the opposite.

As I've said before, although a sector might have life, it does not mean that one's particular company will succeed. So we are right to hedge our bets and invest in other shares - eg PHP, BBOX and perhaps a company letting small offices. And the rumour of the death of real shopping is premature, so there's another property angle.

Arb.

I also am somewhat comforted by the fact surplus office space could be converted to residential under permitted development rights, so there is a potential exit route for any surplus office space.


Exit route for some, surely, not all, I doubt everything can be changed to residential.

We reviewed our more tertiary market portfolio last year and made a list of our properties where that might be the exit route and those where it was not tenable, whilst the quoted beasties have larger concentrations which may make such changes more possible I doubt everything they own is located in the correct place, with required local infrastructure etc, to permit such change of use.

Whilst our rents held up pretty well last year (far better than reported above) there was a vast amount of central government support that fed tenants, I do suspect retraction in demand re offices, retail and maybe some leisure, certainly smaller units are likely the future (our sector), the key, not yet known, is how much reduction in demand there will actually be?

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Re: British Land Company PLC Full Year Results

#417417

Postby Dod101 » June 5th, 2021, 12:41 am

I think it is wise to keep well away from retail/office property for now, and that means British Land and Land Securities amongst others. Just step back for the next couple of years at least. Let it play out. They need to be there; that is their business. We do not.

Dod

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Re: British Land Company PLC Full Year Results

#417501

Postby Wizard » June 5th, 2021, 5:17 pm

Dod101 wrote:I think it is wise to keep well away from retail/office property for now, and that means British Land and Land Securities amongst others. Just step back for the next couple of years at least. Let it play out. They need to be there; that is their business. We do not.

Dod

Is that just advice not to buy in, or do you think current holders should sell out?

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Re: British Land Company PLC Full Year Results

#417515

Postby Dod101 » June 5th, 2021, 7:30 pm

Wizard wrote:
Dod101 wrote:I think it is wise to keep well away from retail/office property for now, and that means British Land and Land Securities amongst others. Just step back for the next couple of years at least. Let it play out. They need to be there; that is their business. We do not.

Dod

Is that just advice not to buy in, or do you think current holders should sell out?


That is not advice! I must say that it sounds like it though. That was not my intention as I am not in the least qualified to give any sort of advice. However, to the point. I do not hold B Land or Land Securities and in fact I think my only property holdings are Primary Health Properties and Segro, both in rather more specialist areas. Even before the pandemic disruption I was not into these big generalist property companies and when I was some years back, I was never able to make any money from them. I suppose one positive factor is that the successful fund manager Brookfield from Toronto has a stake in B Land and they own half of Canary Wharf and of it was very recently reported that they had bought what used to be called Plantation House in the City, so they obviously see a future for London property and I would not dismiss them lightly.

I am taking my own advice; it is up to others to do what they think best.

Dod

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Re: British Land Company PLC Full Year Results

#417614

Postby TUK020 » June 6th, 2021, 8:53 am

Dod101 wrote:
Wizard wrote:
Dod101 wrote:I think it is wise to keep well away from retail/office property for now, and that means British Land and Land Securities amongst others. Just step back for the next couple of years at least. Let it play out. They need to be there; that is their business. We do not.

Dod

Is that just advice not to buy in, or do you think current holders should sell out?


That is not advice! I must say that it sounds like it though. That was not my intention as I am not in the least qualified to give any sort of advice. However, to the point. I do not hold B Land or Land Securities and in fact I think my only property holdings are Primary Health Properties and Segro, both in rather more specialist areas. Even before the pandemic disruption I was not into these big generalist property companies and when I was some years back, I was never able to make any money from them. I suppose one positive factor is that the successful fund manager Brookfield from Toronto has a stake in B Land and they own half of Canary Wharf and of it was very recently reported that they had bought what used to be called Plantation House in the City, so they obviously see a future for London property and I would not dismiss them lightly.

I am taking my own advice; it is up to others to do what they think best.

Dod

For some time retail has been a slow motion car crash (effect of Amazon et al) and about 3 years ago I decided that this would feed through into retail property. I moved out of British Land, and into Land Securities (more office focused) and SEGRO (warehouses and industrial). Some time back I read an interview with Bernard Looney (CEO BP) where he said that he couldn't see BP going back to a pre-pandemic normal in office usage, and as a result BP were revising downwards their future office requirement forecasts. I made a decision then, and unloaded LANDX in the following week. Looking back now, I am comfortable with both decisions, even though I am light in property in my stocks portfolio.


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