Capital & Regional trims losses as valuations stabilise

Capital & Regional posted reduced annual losses on Tuesday, despite a dip in annual revenues, after the property firm completed a wide-reaching restructuring and valuations began to stabilise.
Revenues eased to £70.0m in the 12 months 30 December, from £72.7m a year previously, while net rental income fell to £29.0m from £34.1m.

Adjusted earnings per share were 6.8p compared to 10.2p a year previously.

The net asset value was £168.4m, against £167.1m previously, while net debt was cut from £345.1m to £185.3m and the loss for the period narrowed to £26.4m from £203.9m.

Like most in the sector, Capital & Regional – a real estate investment trust that specialises in in-town shopping centres – was hit hard by the pandemic.

However, chief executive Lawrence Hutchings said: “The completion of our Refocus, Restructure and Recapitalisation at the end of 2021 brought some hard-fought stability to our business following a challenging period where we, and the wider retail industry, faced the combined impact of the pandemic and the restrictions that came with it, as well as the associated acceleration of structural changes impacting physical retailing.”

The firm said occupancy had begun to recover and now stood at 93% compared to 90% at the interim stage and 92% in December 2020. There were a total of 47.7m visits across the portfolio during the year.

Looking to the current year, Hutchings said: “For the first time in four years, we have had six months of stable valuations and this, supported by a marked increase in investment market activity as investors return to the sector, coupled with our robust income and occupancy performance, is cause for further optimism.”

The group is not paying a final dividend, “to further mitigate debt levels”, but said it planned to resume payouts in the second half of 2022.

As at 1230 GMT, shares in Capital & Regional – which operates eight shopping centres in locations including Wood Green, Luton and Maidstone – were ahead 1% at 56.80p.

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