British Land is back in profit after hard years
THE company which owns Drake Circus, The Barcode and a huge part of Plymouth city centre had bounced back into profit, after losses topped £2.5 billion in the previous three years.
British Land has announced a profit of £960 million after the economy recovered and shoppers returned to stores following coronavirus pandemic-enforced shutdowns.
However, the property firm – which owns the block which includes Plymouth’s House of Fraser store as well as Drake Circus mall and The Barcode leisure and entertainment development – said its out-of-town retail parks were faring better than city-centre malls, and it warned that the year ahead will be hit by “heightened macroeconomic and geopolitical uncertainty”, including the war in Ukraine and mounting inflation.
Chief executive Simon Carter was cautious but optimistic as he said: “We are mindful of current elevated economic and geopolitical uncertainties, but our strategic advantage in sectors with pricing power means we can look ahead with confidence.”
British Land made losses of £1.083bn, £1.114bn, and £320m in 2021, 2020 and 2019, respectively, but its newly published full year results to the end of March 2022 reveal it has turned these losses into an after-tax profit of £960m, with its underlying profit rising 24.9% to £251m. The value of its portfolio has risen by 6.8% to £10.467bn.
In its report to investors, the company said: “After a challenging few years reflecting the structural shift to online and impact of Covid-19, there were signs of a pick-up in activity in retail occupational markets. Activity has been skewed towards retail parks, which are more affordable, and where footfall and sales are near pre-pandemic levels, and in some cases ahead.”
It stressed that retail parks are more likely to prosper, adding: “As we move into a more inflationary environment, consumers will be more focused on value and occupiers will need to mitigate the impact of higher input costs. This will focus attention on the affordability of retail space which plays to the retail park proposition.”
British Land said the UK economy had responded well to the lifting of Covid-19 restrictions, expanding by 7.4% in the calendar year and by March was 1.2% above pre-Covid levels. But it stressed that the combination of Covid, Brexit and rising energy prices has reduced capacity in the economy.
The company also said: “Consumer confidence has weakened since the summer, with concerns around rising prices and the prospect of a real income squeeze weighing on sentiment, but unemployment has quickly recovered to pre-pandemic levels at under 4%. Most forecasters are still expecting growth for the 2022 calendar year but with risks to the downside if the economic impact of the war in Ukraine worsens.”
‘Our strategic advantage in sectors with pricing power means we can look ahead with confidence’ SIMON CARTER