Capital & Counties drops 4% despite weathering Brexit fall-out
Despite London-based property group Capital & Counties (CapCo), which is also listed on the JSE, weathering a difficult 2017 and managing to maintain its dividend growth amid fall-out from Brexit, proposed investors were unimpressed at the lack of dividend growth, and the company’s share price had fallen 4% by late trade on Tuesday.
CapCo proposed a final 2017 dividend of 1p per share resulting in a full-year dividend of 1.5p per share, according to financial results for the year to December 2017. This represented no dividend growth for the second year in a row.
Speaking on the sidelines of the release of the financial results, CEO Ian Hawksworth said its Covent Garden estate, which now represents more than 70% of its portfolio, was experiencing strong trade in the heart of London. It balanced the company’s performance because its other asset, a residential Earl’s Court property, lost value after the Brexit vote, slipping from £1.14bn to £989m because of "economic and political uncertainty", according to Hawksworth.
Naeem Tilly of Catalyst Fund Managers said Earl’s Court valuations were impacted by the price of comparable sales of land in London. "There is also political risk at the site with calls for more affordable housing to be added. [The] Earl’s Court’s valuation is now about 30% down since its peak."
But Covent Garden was a strong performer. "Covent Garden, now valued at more than £2.5bn, delivered another strong year of rental and value growth ... securing a record £15m of rental income at a premium of 10% to December 2016’s estimated rental value," said Hawksworth.
Hawksworth said the Earl’s Court’s redevelopment was on track. The 31ha site in west London, where the old Earl’s Court exhibition centres originally stood, is scheduled for redevelopment but has suffered a number of devaluations since 2015, when it was valued at £1.4bn.