Capital & Regional falls after reducing its dividend

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Capital & Regional falls after reducing its dividend

Published Date: 2019-03-15 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Capital & Regional falls after reducing its dividend

The real estate investment trust wants to preserve cash to fund investment while maintaining its distribution requirements.

Capital & Regional's shares fell sharply yesterday after the UK shopping centre owner swung to a loss for 2018 and said it was adjusting its dividends.

The real estate investment trust (REIT) blamed the decline on negative sentiment towards regional retail assets, partly offset by positive valuation gains across its London portfolio. Over the period, the group faced a number of company voluntary arrangements due to stress in the retail sector. This shaved £1.5 million off its net rental income. Still, total net rental income increased by 0.6% to £51.9 million for the year to December. It said rental income had proven to be resilient, in spite of a steady flow of retail failures. These included British Home Stores, which was a major tenant. Footfall at its centres also continued to rise, outperforming the relevant national index.

Under International Financial Reporting Standards, the group reported a £25.6 million loss for the year to end-December, down from profit of £22.4 million a year earlier. However, adjusted profit rose 4.8% up at £30.5 million. Adjusted earnings per share increased by 3.2% to 4.23p.

Its net asset value fell 11% to 60p per share with the value of its portfolio declining by 3.5% to £855.2 million at the end of December. It's cut its total dividend by 33.5% to 2.42p per share and said dividends for the short to medium-term were expected to be around the same level as it preserves cash to fund investment while maintaining its REIT distribution requirements.

The REIT's shares ended 9.4% down at R5.30 on the JSE.





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