Land Securities Results

[idpickering]

Half-yearly results for the six months ended 30 September 2017

14 November 2017

"Landsec reports a strong operational performance in the first half, with our highest levels of leasing activity since the global financial crisis, opportunistic buying and profitable disposals. We've continued the active management of our balance sheet, returning £475m of capital to shareholders and also lowering our cost of debt and lengthening its duration", said Landsec's Chief Executive, Robert Noel.



"Revenue profit is up 5.2% and adjusted diluted earnings per share are up 5.8%. While the valuation of the Combined Portfolio is little changed, adjusted diluted net asset value per share is up 1.1% as the cost of debt management has been more than offset by the effect of the 15 for 16 share consolidation accompanying the return of capital.



"In London, the sale of 20 Fenchurch Street, EC3 at an exceptional price demonstrated our disciplined approach to managing capital. The sale crystallised a 170% profit on cost and significant value for shareholders. At 21 Moorfields, EC2, the quality of our product, our reputation for delivery and the strength of our partnership approach saw us secure a significant pre-let in the City of London, with Deutsche Bank committing to a minimum of 469,000 sq ft.

https://www.investegate.co.uk/land-sec- ... 00033778W/

[PinkDalek]

Also includes (my bold):

Dividend

We will be paying a second quarterly dividend of 9.85p per share on 5 January 2018 to shareholders registered at the close of business on 1 December 2017. This will be paid wholly as an ordinary dividend. Taken together with the first quarterly dividend of 9.85p per share, paid wholly as a Property Income Distribution on 6 October 2017, our first half dividend will be 19.7p per share (six months ended 30 September 2016: 17.9p), representing a total payment of £151m (six months ended 30 September 2016: £141m). This 10.1% increase in the half-year dividend is a reflection of last year's 10.1% increase in the total dividend and should not be viewed as a forecast of how this year's total dividend might change.

[Gengulphus]

Also includes (my bold):

Dividend

We will be paying a second quarterly dividend of 9.85p per share on 5 January 2018 to shareholders registered at the close of business on 1 December 2017. This will be paid wholly as an ordinary dividend. ...

As I happen to have looked at this just yesterday in order to sort out some demo HYP records, paying the Q2 dividend entirely as an ordinary dividend has become a habit of Land Securities - having paid only PIDs for several years, they paid the Q2 dividend partially as an ordinary dividend in their 2014/15 financial year, then entirely as one in their 2015/16 and 2016/17 years, and now in the 2017/18 one as well. It's presumably their way of dealing with the REIT quid pro quo: they escape Corporation Tax on their REIT-qualifying profits, but must pay out at least 90% of them as PIDs, which are more highly taxed in the hands of taxpayer shareholders (*) than ordinary dividends. So when the amount of cash available to pay out is more than that 90% minimum, it's better to pay the excess out as ordinary dividends - and presumably it only matters that the 90% minimum is met for the year as a whole, so it simplifies things to concentrate each of PIDs and ordinary dividends in single payments as far as possible, rather than have each payment split into PID and ordinary components.

For full details of past payments back to around 2003, see https://landsec.com/investors/sharehold ... nformation and the dividend history PDF that it links to.

(*) There is of course no taxation difference for non-taxpayer shareholders such as ISAs and SIPPs.

Gengulphus

[idpickering]

This from TMF yesterday;

Why I’d buy Land Securities Group plc for its 4%+ dividend yield

Defensively positioned

Landsec (LSE: LAND) today reported a 5.2% hike in underlying profit in its first-half, following high levels of leasing activity and healthy rental contribution of recent acquisitions and newly completed developments.

The company, formerly known as Land Securities, has a good track record of developing and managing its assets. But looking ahead, it warned about the impact of Brexit headwinds on the economy. Rental values have already weakened slightly in the London office market, and worse may still be to come.

But despite the uncertain macro backdrop, the company is seeing only a slight uptick in its vacancy rate — it rose by just 0.1 percentage points to a still-low 2.9% in the first half of 2017. And going forward, the group is defensively positioned, as demand for higher-value properties has historically been resilient throughout the cycles.

http://www.fool.co.uk/investing/2017/11 ... end-yield/