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Capital & Regional PLC on Thursday reported sharply lower interim profit, though revenue grew on the back of improved occupancies and higher rent collection. Releasing its latest first-half financial results, the company also said it has agreed to buy the Gyle Shopping Centre in Edinburgh for £40 million, excluding acquisition costs. The deal will be financed through existing funds held by the company, a new debt facility of £16 million and about £25 million of gross proceeds from a fully underwritten open offer. The London-based real estate investment trust focused on community shopping centres plans to raise around £23.4 million from an open offer of 46.3 million new shares at 54 pence per share on the basis of 4 new shares for every 15 existing shares held. In a separate statement on Thursday, Growthpoint Properties Ltd said it had underwritten Capital & Regional’s share offer and will fund its commitment from its existing debt facilities. Shares in Capital & Regional were 0.7% lower at 56.69 pence on Thursday morning in London. They were flat at R 13.25 in Johannesburg. Growthpoint was up 0.3% at R 13.05 in Johannesburg. For the six months that ended June 30, Capital & Regional said pretax profit plunged to £4.9 million from £18.9 million a year before. Profit on ordinary activities before financing was just £8.7 million, down steeply from £22.6 million previously. Revenue rose by 7.7% to £30.7 million from £28.5 million. Like-for-like net rental income increased by 13%, driven primarily by improved occupancy and rent collection. But total net rental income fell by 4.9% to £11.7 million from £12.3 million, reflecting the like-for-like improvement largely offsetting the loss of income from the sale of Blackburn in August 2022. The occupancy rate improved to 94.5% as at June 30 from 93.8% a year before. At December 31, occupancies stood at 94.1%. Rent collection was in line with historic pre-Covid levels, with 98.4% collected for the first half of 2023. Capital & Regional declared an interim dividend of 2.75p, down 10% from 2.50p a year before. As at June 30, net asset value per share was 106p, 10% down from 118p. ‘Our community strategy’s focus on value orientated, non-discretionary and needs based retail and services has driven another period of robust operational performance for the company, against an uncertain and inflationary economic backdrop,’ Capital & Regional Chief Executive Lawrence Hutchings said. The property firm said the Gyle shopping centre acquisition presented it with a number of asset management opportunities, including refining the tenant mix, a renewed focus on leasing to improve occupancy and income, while enhancing the centre’s appeal to the growing and affluent catchment in south western Edinburgh. Capital & Regional said it would continue to explore selective opportunities like the Gyle to grow its business. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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