LONDON (Alliance News) - Capital & Counties Properties PLC Friday reported a fall in profit for the first half due to lower valuation gains on its portfolio.
The London-focused property investor and developer posted pretax profit of GBP139.8 million for the six months ended June 30, down from GBP211.1 million a year earlier. The company said valuation gains were GBP134.4 million during the period, compared with GBP187.9 million a year earlier. Its results in the previous year were also boosted by GBP6.4 million in profit from its share of joint ventures which did not reoccur in 2014.
Revenue crept up to GBP54.2 million, from GBP51.1 million, as rental income rose to GBP51.4 million from GBP42.2 million a year earlier.
Capco's strategy is focused on growing and creating value at its two major London assets, in Earls Court and Covent Garden. Revenue for the Covent Garden estate fell to GBP25.1 million, from GBP30.6 million a year earlier, however, this was offset by an increase in revenue for the Earls Court portfolio to GBP9.9 million, from GBP6.1 million.
The Covent Garden estate was valued at GBP1.33 billion, up from GBP1.16 billion in December, while the Earls Court estate was valued at GBP522 million compared with GBP453 million at the end of December.
At an operating level, Capco said it signed 38 lettings representing GBP5.8 million of rental income a year at its Covent Garden estate.
The company said demand for retail space is strong from both existing and new tenants, while the residential estate continues to make strides. A total of six new properties were added to the Covent Garden estate for a total cash consideration of GBP76 million.
At Earl's Court, the company said its redevelopment masterplan for the site is moving forward and several milestones have been achieved in the context of the scheme.
The re-development of Earls Court is currently one of the most high-profile property schemes in London. The scheme, which could take a decade or more to complete, involves the redevelopment of the Earls Court 1 and 2 exhibition centres, as well as a much broader area around the centres.
In May, the group entered into a GBP130 million four year construction facility to fund its Lillie Square development near West Brompton tube station.
Once completed, Lillie Square will be one of the largest residential developments in London, transforming what is currently a 7.5 acre car park on Seagrave Road into 808 high-end homes set around a new garden square.
The first phase of Lillie Square, which comprises 237 apartments, was launched in March and over 90% of this phase is now exchanged or reserved.
Despite a fall in profit the company maintained its interim dividend at 0.5 pence per share.