Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Capital & Regional PLC (FRA:XC2R, Financial) reported a successful first half of 2024 with 48 leases signed, an increase in both deal count and total rent secured compared to the previous year.
- Occupancy rates improved to 93.9% from 93.4% in December, indicating strong leasing efforts.
- Rent collection reached a record high of 99.2%, showcasing the vibrancy and profitability of their locations.
- Adjusted profit increased from GBP7 million to GBP8.2 million, leading to a 3.6% increase in the first half dividend.
- The company successfully integrated the Argyle acquisition, resulting in a 17.1% growth in both NRI and adjusted profit.
Negative Points
- Despite the overall positive performance, adjusted profit per share saw a reduction of 12.1%, indicating potential dilution effects.
- Interest costs increased due to the repricing of debt following the end of a previous interest rate swap in March.
- External management fees fell due to the sales of Redditch and Luton during 2023, impacting revenue streams.
- The company faced increased food costs and impacts from the Wilko administration, affecting financial performance.
- There is a noted challenge in the retail-to-residential conversion market due to rising construction costs and increased carrying costs.
Q & A Highlights
Q: Can you provide details on the ERV growth reported in the half year?
A: James Ryman, our Investment Director, noted that ERV growth has been supported by several transactions and CapEx plans, which have been integrated into cash flows. The growth is generally conservative and stable.
Q: Hemel Hempstead has shown significant like-for-like uplift this half year. What contributed to this?
A: Lawrence Hutchings, CEO, explained that the uplift is largely due to the B&M leasing, which has positively impacted the valuation.
Q: What are the lease lengths for the recent lettings, and were there any significant rent-free periods?
A: Lawrence Hutchings stated that the leases are generally 10-year terms with modest incentive packages. The focus was on securing appropriate rents, aligning with the value retailer's focus on occupational costs.
Q: Is there evidence of growth in rent reviews?
A: Lawrence Hutchings confirmed that there is evidence of growth in rent reviews, particularly where there is tension in the center or specific spaces. However, outcomes can vary depending on whether leases fall inside the 1954 act.
Q: Are there any further questions from the webcast?
A: There were no additional questions from the webcast. Lawrence Hutchings concluded by emphasizing the solid foundation, strategy, and management team that position the company well for continued operational momentum.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
