Land Securities (LSE: LAND) faced a mild contraction in profits as it reported a widened pre-tax loss of £193 million for the six months ending September 30, compared to the £192 million reported a year prior. While the figures reveal economic challenges, the FTSE 100 commercial property developer remains optimistic about future investment prospects.
Revenue for the same period showed growth, increasing from £394 million to £412 million. However, the net deficit on the revaluation of investment properties expanded to £371 million from £331 million, reflecting the impact of global economic factors, including inflation and interest rate fluctuations.
Acknowledging economic challenges, Land Securities noted the material impact of inflation and interest rates on asset values across various sectors. Despite a marked decrease in inflation from recent highs, the company expressed caution about the persistence of relatively high inflation in the UK. It emphasised the uncertainty surrounding interest rates, stating that assuming a sharp decline in the near future appears overly optimistic.
As of September 30, diluted net asset value per share in EPRA NTA terms stood at 893 pence, reflecting a 4.6% decrease from the 936p reported on March 31. In response to the challenging financial climate, Land Securities declared a dividend of 18.2 pence per share, demonstrating a slight increase from the 17.6p dividend reported a year ago.
Looking ahead, the company anticipates a potential improvement in investment activity in 2024, as interest rates stabilise.
Land Securities’ shares remained flat on Tuesday morning in London. Year to date, the shares have declined over 5%, with a 3% decrease year over year.
