LONDON (ShareCast) - (Sharecast News) - Capital & Counties Properties reported on an "active year" on Wednesday, with equity attributable to the owners of the parent standing at ?2.5bn, down from ?2.7bn.
The FTSE 250 company said its EPRA net asset value per share was 293p per share at 31 December, which was a decrease of 10%, driven primarily by valuation movements on Earls Court and Covent Garden.

Its total property value stood at ?2.8bn, which was down 1.7% on a like-for-like basis, while its underlying earnings per share standing at 1p per share, rising from 0.9p per share.

The board proposed a final 2019 dividend of 1p per share, resulting in a full-year dividend of 1.5p per share, as the firm's total shareholder return stood at 14% for 2019.

Capco said it had a "strong" balance sheet with "significant" financial flexibility, noting the sale of its interests in Earls Court for ?425m, which the board said enhanced its financial flexibility and positioned the firm to capitalise on investment opportunities.

Its current group loan-to-value ratio was 16%, before the receipt of deferred consideration for Earls Court, down from 18% year-on-year, while group cash and undrawn facilities rose to ?895m from ?854m.

Group net debt stood at ?442m, narrowing from ?573m, with capital commitments standing at ?14m, down from ?53m.

Capco's weighted average debt maturity was 4.9 years, down from six years, and its weighted average cost of debt was 2.97%, up slightly from 2.92%.

The board stated its intention to grow its dividend distributions in line with progression in underlying earnings, as well as its return of capital of up to ?100m through a share buyback programme in the current year.

At Covent Garden, Capco reported an "active year" across the estate, average sales and footfall continuing to trend upwards.

It reported continued growth in net rental income there, up 1.8% on a like-for-like basis and 7% in absolute terms.

The company said it saw "robust demand" across all uses, with 92 new leases and renewals, representing ?17.4m in contracted income transacted at 1.3% above 31 December 2018 estimated rental value.

A total of 13 new brands opened across the estate, including Lacoste, Polo Ralph Lauren, VyTA and Glossier.

It also saw the expansion and investment by global brands, including the upsizing of Bucherer and the extension of Apple's lease.

Capco reported high occupancy, renewal rates and strong demand for offices and residential uses.

Looking at its performance, the company said London's West End had proved to be "more resilient" than the wider UK market, but added that it was not unaffected.

Total property value stood at ?2.6bn, which was a decrease of 1.4% on a like-for-like basis, which was apparently driven by positive performance across the estate, offset by negative adjustments at Long Acre and James Street.

Its estimated rental value was "broadly stable", falling 0.1% on a like-for-like basis to ?108m, while its equivalent yield was up six basis points to 3.65%.

Capco's initial yield moved from 2.4% to 2.5%, as the reversionary potential continued to be captured, while its EPRA vacancy remained stable at 3%, with a "small number" of units available for letting.

The firm also highlighted its track record of investment activity, noting its accretive investment and aggregation of ownership of the Covent Garden estate, generating ?1.2bn of value since 2010.

It said its Floral Court residential new-build apartments were fully sold for ?100m of cumulative proceeds, and added that more than ?70m was invested in 2019 through targeted acquisitions on the southern side of the estate, with pipeline of additional opportunities under review.

Looking at its other investments, Capco noted the sale of its interests in Earls Court for ?425m, in line with its long-term strategy, and added that deferred consideration of ?210.4m from the sale would be received over the next two years .

Lillie Square second phase completion and handover remained on track for 2020, with over 80% pre-sold, representing around ?100m of sales proceeds.

"Capco looks forward to the next phase of growth, with a strategic focus on the West End and Covent Garden, where we have created a world-class estate," said chief executive officer Ian Hawksworth.

"As a strongly capitalised REIT, with access to substantial liquidity, Capco is well-positioned to take advantage of investment opportunities whilst also offering resilience during periods of economic uncertainty.

"Our creative approach to leasing and asset management continues to contribute to increased footfall and tenant sales at Covent Garden, giving us confidence in the long-term prospects of the business to deliver superior total returns to our shareholders."

At 1117 GMT, shares in Capital & Counties Properties were down 2.67% at 226.2p.

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