C&R’s se­cure in­come a ‘com­fort’

The Star Early Edition - - COMPANIES - Roy Cokayne

CAP­I­TAL & Re­gional (C&R), the UK-fo­cused real es­tate in­vest­ment trust with a se­condary list­ing on the JSE, has ex­pressed “great com­fort” over the se­cu­rity of its in­come.

Lawrence Hutch­ings, the chief ex­ec­u­tive, said yes­ter­day that the in­terim div­i­dend of 1.73p (R0.30) for the six months to June, rep­re­sent­ing a 6.8 per­cent in­crease on the prior year, re­flected their strong feel­ing of con­fi­dence in the fu­ture growth prospects of the busi­ness.

“With the sec­ond half of the year set to com­par­a­tively ben­e­fit from sev­eral ma­jor let­tings com­ing on stream and the tim­ing of re­cent ac­qui­si­tions and dis­pos­als, we ex­pect the full year 2017 div­i­dend will be at the top end of our tar­geted growth range of at least 5 per­cent to 8 per­cent per an­num,” he said.

C&R owns a port­fo­lio of dom­i­nant in-town com­mu­nity shop­ping cen­tres in the UK, in­clud­ing seven shop­ping cen­tres in Black­burn, Hemel Hemp­stead, Il­ford, Maid­stone, Waltham­stow and Wood Green. It also has a 20 per­cent joint ven­ture in­ter­est in the King­fisher Centre in Red­ditch.

Its port­fo­lio was val­ued at £879.8 mil­lion (R15.36 bil­lion) at end-June.

Hutch­ings said that while el­e­ments of the re­tail sec­tor might face chal­lenges, the con­tin­ued strong oc­cu­pier de­mand for their cen­tres and the lo­cal and con­ve­nient na­ture of their as­sets, which catered for the non dis­cre­tionary and value ori­en­tated needs of their shop­pers, gave them great com­fort over the se­cu­rity of their in­come.

“This, al­lied with our proven track record of driv­ing in­come and de­liv­er­ing re­sults through se­lec­tive but sig­nif­i­cant cap­i­tal ex­pen­di­ture in­vest­ment, un­der­pins the fu­ture growth po­ten­tial of the busi­ness,” he said.

Hutch­ings said they also saw an op­por­tu­nity to fur­ther en­hance prof­itabil­ity by seek­ing greater ef­fi­ciency in their oper­at­ing plat­form and stream­lin­ing their struc­ture through var­i­ous ini­tia­tives. He said some of these were al­ready de­liv­er­ing tan­gi­ble re­sults and they were ini­tially tar­get­ing an­nu­alised sav­ings of at least £1.8m by next year.

Ad­justed prof­its, which ex­cludes reval­u­a­tion of prop­er­ties and fi­nan­cial in­stru­ments, gains or losses on dis­pos­als, ex­cep­tional items and other de­fined terms, in­creased by 6.6 per­cent to £14.5m from £13.6m.

Shares in C&R rose 2.53 per­cent on the JSE yes­ter­day to close at R9.74.

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