Land Securities Results

[idpickering]

Financial results
 Revenue profit(1)(2) down 6.3% to £414m
 Revenue profit(1)(2) down 1.1% to £437m before provisions related to 2020/21 rent
 Loss before tax for the year of £837m (2019: loss of £123m)
 Adjusted diluted earnings per share(1)(2) down 6.4% to 55.9p
 No final dividend; full year dividend down 49.1% to 23.2p per share
 Combined Portfolio(1)(2) valued at £12.8bn, with a valuation deficit(1)(2) of £1,179m or 8.8%(3)
 EPRA net tangible assets per share(1) down 11.6% to 1,192p
 Ungeared total property return(4) of -4.5%
 Total business return(1) of -8.2%

And later re the dividend;

As a result of the significant uncertainty surrounding Covid-19, the Board took the difficult decision in
early April to cancel the third interim dividend. With limited change in the situation since then, the Board is
also not proposing the payment of a final dividend. We recognise that this is disappointing as income is
an important component of our return for shareholders and are committed to resuming dividends at an
appropriate level as soon as conditions stabilise.

https://landsec.com/sites/default/files ... 202020.pdf

[Dod101]

The usual waffle about no final dividend but given their numbers it is not in the least surprising. Like its cousin British Land, Land Secs are in an uncomfortable position.

Dod

[idpickering]

The usual waffle about no final dividend but given their numbers it is not in the least surprising. Like its cousin British Land, Land Secs are in an uncomfortable position.

Dod

Agreed Dod, on both counts. I have no regrets dumping both.

Ian.

[Wizard]

Revenue down £400m, losses up £700m. That does not sound a great relationship. But as I don’t own and don’t plan to buy I am not minded to pick through what is going on in detail.

[dealtn]

The usual waffle about no final dividend but given their numbers it is not in the least surprising. Like its cousin British Land, Land Secs are in an uncomfortable position.

Dod

Well you need to be careful, in that to maintain REIT status (surely an assumption you should make), it is the revenue profit from qualifying activities that matters, not the accounting profit.

There is a 12 month period after each accounting year end to satisfy this.

See page 16 of the announcement, but to maintain REIT status, the year to March 2020 requires an additional dividend before March 2021. So whilst it is sensible from a cash flow perspective, given the uncertainty, to cancel the next 2 dividends, you must assume it will return before too long. Depending on how the revenue profit looks from this point (and it is hard to see it turning negative), will guide as to the quantum and frequency of the dividend when it returns.

Obviously the same will apply to BLND too.

[idpickering]

It seems some BLND share holders are carrying out a pre-emptive strike before their results due out tomorrow. The share is down nearly 10%, and LAND down 15%, as I type. Both these REITS are not wanted currently apparently. A narrow escape on my part selling both the other day.

Ian.

[Dod101]

The usual waffle about no final dividend but given their numbers it is not in the least surprising. Like its cousin British Land, Land Secs are in an uncomfortable position.

Dod

Well you need to be careful, in that to maintain REIT status (surely an assumption you should make), it is the revenue profit from qualifying activities that matters, not the accounting profit.

There is a 12 month period after each accounting year end to satisfy this.

See page 16 of the announcement, but to maintain REIT status, the year to March 2020 requires an additional dividend before March 2021. So whilst it is sensible from a cash flow perspective, given the uncertainty, to cancel the next 2 dividends, you must assume it will return before too long. Depending on how the revenue profit looks from this point (and it is hard to see it turning negative), will guide as to the quantum and frequency of the dividend when it returns.

Obviously the same will apply to BLND too.

Yes I am aware that like an IT, REITs will always have a minimum amount that they must distribute in order to maintain the tax benefits and of course I am aware also that that is based on revenue income and not the rather specious 'profit' from any uplift in property values. I am not sure why you are counselling me to 'be careful', about what? In any case I do not hold either B Land or Land Secs. I can quite see why they would want to hold on to cash for as long as possible, given the disarray that many of their tenants, particularly on the retail side, are in.

Dod

[dealtn]

The usual waffle about no final dividend but given their numbers it is not in the least surprising. Like its cousin British Land, Land Secs are in an uncomfortable position.

Dod

Well you need to be careful, in that to maintain REIT status (surely an assumption you should make), it is the revenue profit from qualifying activities that matters, not the accounting profit.

There is a 12 month period after each accounting year end to satisfy this.

See page 16 of the announcement, but to maintain REIT status, the year to March 2020 requires an additional dividend before March 2021. So whilst it is sensible from a cash flow perspective, given the uncertainty, to cancel the next 2 dividends, you must assume it will return before too long. Depending on how the revenue profit looks from this point (and it is hard to see it turning negative), will guide as to the quantum and frequency of the dividend when it returns.

Obviously the same will apply to BLND too.

Yes I am aware that like an IT, REITs will always have a minimum amount that they must distribute in order to maintain the tax benefits and of course I am aware also that that is based on revenue income and not the rather specious 'profit' from any uplift in property values. I am not sure why you are counselling me to 'be careful', about what? In any case I do not hold either B Land or Land Secs. I can quite see why they would want to hold on to cash for as long as possible, given the disarray that many of their tenants, particularly on the retail side, are in.

Dod

Because you said, with respect to the dividend, the passing was "not in the least surprising".

If the situation as it stands continues then "the usual waffle" and the "numbers" will be the same, but the outcome won't be a passed dividend but a restored one. So I was cautioning care about a lazy causation between "the usual waffle" and passing of the dividend continuing as that won't be the case because of the overriding REIT status.

That may be clear to you, but isn't in your post, nor might it be obvious to others.

[Dod101]

Yes I am aware that like an IT, REITs will always have a minimum amount that they must distribute in order to maintain the tax benefits and of course I am aware also that that is based on revenue income and not the rather specious 'profit' from any uplift in property values. I am not sure why you are counselling me to 'be careful', about what? In any case I do not hold either B Land or Land Secs. I can quite see why they would want to hold on to cash for as long as possible, given the disarray that many of their tenants, particularly on the retail side, are in.

Dod

Because you said, with respect to the dividend, the passing was "not in the least surprising".

If the situation as it stands continues then "the usual waffle" and the "numbers" will be the same, but the outcome won't be a passed dividend but a restored one. So I was cautioning care about a lazy causation between "the usual waffle" and passing of the dividend continuing as that won't be the case because of the overriding REIT status.

That may be clear to you, but isn't in your post, nor might it be obvious to others.[/quote]

Thanks. Maybe I was being careless, but surely everyone understands that a REIT has got a floor on its dividend in the similar way that an IT has so whether it is a mopping up of undistributed PID income from the year being reported on or income derived from the new financial year, it is in the nature of a REIT that there will nearly always be a distribution/dividend in any year.

Dod

[Arborbridge]

It seems some BLND share holders are carrying out a pre-emptive strike before their results due out tomorrow. The share is down nearly 10%, and LAND down 15%, as I type. Both these REITS are not wanted currently apparently. A narrow escape on my part selling both the other day.

Ian.

Pity about the dividend, otherwise getting ripe for a topup. There will be a future after C-19 for BLND.

Arb.

[idpickering]

It seems some BLND share holders are carrying out a pre-emptive strike before their results due out tomorrow. The share is down nearly 10%, and LAND down 15%, as I type. Both these REITS are not wanted currently apparently. A narrow escape on my part selling both the other day.

Ian.

Pity about the dividend, otherwise getting ripe for a topup. There will be a future after C-19 for BLND.

Arb.

Wise words indeed Arb. You’re a braver chap than me to consider topping these pair up. I get that none of us can tell the future, but for me, ‘once bitten, twice shy’ and all that. There are better shares than these two out there imho.

Ian.

[NeilW]

London property will always deliver a premium over the medium term.

[Arborbridge]

It seems some BLND share holders are carrying out a pre-emptive strike before their results due out tomorrow. The share is down nearly 10%, and LAND down 15%, as I type. Both these REITS are not wanted currently apparently. A narrow escape on my part selling both the other day.

Ian.

Pity about the dividend, otherwise getting ripe for a topup. There will be a future after C-19 for BLND.

Arb.

Wise words indeed Arb. You’re a braver chap than me to consider topping these pair up. I get that none of us can tell the future, but for me, ‘once bitten, twice shy’ and all that. There are better shares than these two out there imho.

Ian.

I have to admit to being a bit tongue in cheek, but if conditions were right, I would consider topping up - although just now is too early. We need to see some results first, and as Terry commented with regard to BT, maybe more than one set.

I'm not inclined to panic over any of the none payers for the moment and for those with a healthy cash pile, coming back to the market gradually in the next year is good option. Looking back, we will wonder how we missed so many bargains - as always it's the failure of courage which grips us.

Arb.

[Arborbridge]

London property will always deliver a premium over the medium term.

That's why I have faith in BLND. At the moment there is, however, some extra doubt which makes be less enthusiastic than normal: namely, will those offices all be in full swing again, or will people get addicted to working at home?

I'm giving them some slack on being a cutter - they want to have better visibility over earnings, and that's reasonable. Who wants to own unoccupied office blocks in a ghost city? Well, surely it won't come to that.

Arb.

[idpickering]

I have to admit to being a bit tongue in cheek, but if conditions were right, I would consider topping up - although just now is too early. We need to see some results first, and as Terry commented with regard to BT, maybe more than one set.

I'm not inclined to panic over any of the none payers for the moment and for those with a healthy cash pile, coming back to the market gradually in the next year is good option. Looking back, we will wonder how we missed so many bargains - as always it's the failure of courage which grips us.

Arb.

Fair enough Arb. In fact I'm not saying never. If the circumstances with either share were more favourable, I'd toy with dipping my toes again, but not currently. As for missing bargains, that's why I bit the bullet with my RDSB and BP. top ups this year. imho, both are screaming buys for a long term hold currently. I wouldn't say the same for these two REITs though I think. But what do I know.....

Ian.

[idpickering]

It seems some BLND share holders are carrying out a pre-emptive strike before their results due out tomorrow. The share is down nearly 10%, and LAND down 15%, as I type. Both these REITS are not wanted currently apparently. A narrow escape on my part selling both the other day.

Ian.

Just for clarification, I need to correct what I said in my above comment regarding BLND results being out today. I was wrong it seems, and they're being announced on 27 May 20. See; https://www.britishland.com/investors/r ... sults/2020
I was misinformed myself as I'd got that information from a financial diary here. https://www.lse.co.uk/share-prices/fina ... 3-May-2020. They have rectified their site too it seems, as BLND has gone. Sorry if I mislead anyone.

Ian.

[Breelander]

... I need to correct what I said in my above comment regarding BLND results being out today. I was wrong it seems...

Understandable if you looked up that date any time before 29 April. On that day BLND changed the date.

The British Land Company PLC ("the Company") announces a revised date for the publication of its preliminary results for the year ended 31 March 2020. Results will now be published on 27 May 2020, two weeks later than the previously planned date of 13 May.

https://www.investegate.co.uk/british-l ... 09062889L/

[Dod101]

... I need to correct what I said in my above comment regarding BLND results being out today. I was wrong it seems...

Understandable if you looked up that date any time before 29 April. On that day BLND changed the date.

The British Land Company PLC ("the Company") announces a revised date for the publication of its preliminary results for the year ended 31 March 2020. Results will now be published on 27 May 2020, two weeks later than the previously planned date of 13 May.

https://www.investegate.co.uk/british-l ... 09062889L/

The change of date fooled the IC as well since in its recent edition it announced today as the day for its Finals. Not I expect that they will contain very exciting news.

Dod

[Breelander]

The change of date fooled the IC as well since in its recent edition it announced today as the day for its Finals.

There should be many other examples, a lot of companies have done the same. As BLND said: "This follows recent guidance from the FCA on corporate reporting timetables in light of covid-19."

[Dod101]

London property will always deliver a premium over the medium term.

Are you a soothsayer?

Dod