C&R’s secure income a ‘comfort’

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.