Shaftesbury Capital (LON:SHC) Announces Earnings Results

Key Points

• Strong first-half results: Like-for-like property values increased 3.4% to £5.6 billion, underlying earnings rose 8% to £44 million, and EPRA NTA grew 3.9% to £2.23 per share. The interim dividend was raised 16% to 2.2 pence per share.
• Leasing remained robust: The company completed 226 transactions at rents above both estimated rental values and prior passing rents, while portfolio vacancy stayed low at 2.6%. Management maintained its 5%-7% rental-growth outlook, supported by strong demand and limited supply.
• Financial position is strong, but costs may rise: Net debt was below £800 million, loan-to-value stood at 16%, and liquidity is expected to exceed £800 million after refinancing actions. Management said modest tenant failures and a higher expected cost of debt are manageable risks.

Shaftesbury Capital (LON:SHC - Get Free Report) issued its quarterly earnings results on Wednesday. The company reported GBX 2.40 earnings per share for the quarter, Digital Look Earnings reports. Shaftesbury Capital had a return on equity of 8.78% and a net margin of 141.28%.

Here are the key takeaways from Shaftesbury Capital's conference call:

• Strong first-half performance: Like-for-like property value rose 3.4% to £5.6 billion, EPRA NTA increased 3.9% to £2.23 per share, and underlying earnings grew 8% to £44 million. The interim dividend increased 16% to 2.2 pence per share.
• Leasing momentum remained robust, with 226 transactions completed at rents 5% above ERV and 18% above previous passing rents. Portfolio vacancy was just 2.6% at mid-year, with management citing strong demand, limited supply, and continued support for its 5%-7% rental-growth targets.
• The balance sheet provides substantial capacity for investment, with net debt below £800 million, loan-to-value of 16%, and more than £800 million of liquidity expected after repaying maturing private placement notes. The company invested £31 million in acquisitions and capital expenditure while disposing of the non-core Lillie Square asset.
• Management highlighted significant embedded income growth, including contracted rent, refurbishment projects, and under-rented space, with most contracted and refurbishment income expected to contribute over the next 12 months. However, capturing the broader 28% income reversion will depend on the pace of the leasing cycle.
• Expected credit loss provisions increased modestly after a small number of tenant failures, including an office tenant in Carnaby, while refinancing the £163 million private placement note is expected to increase the weighted average cost of debt. Management characterized both issues as manageable and not indicative of a broader deterioration.

Shaftesbury Capital Trading Down 1.4%

Shares of SHC traded down GBX 2 during mid-day trading on Wednesday, reaching GBX 144. 5,320,812 shares of the stock traded hands, compared to its average volume of 18,303,268. The company has a market cap of £2.63 billion, a price-to-earnings ratio of 7.78 and a beta of 0.96. Shaftesbury Capital has a 1 year low of GBX 124.10 and a 1 year high of GBX 162.90. The firm has a fifty day moving average price of GBX 137.21 and a 200 day moving average price of GBX 138.37.

Insider Activity

In other Shaftesbury Capital news, insider Jonathan Nicholls acquired 100,000 shares of the company's stock in a transaction that occurred on Thursday, May 14th. The stock was bought at an average price of GBX 129 per share, with a total value of £129,000. Company insiders own 0.65% of the company's stock.

Analyst Upgrades and Downgrades

Several brokerages have issued reports on SHC. Royal Bank Of Canada cut their price target on Shaftesbury Capital from GBX 210 to GBX 200 and set a "buy" rating on the stock in a report on Monday, June 15th. Deutsche Bank Aktiengesellschaft reissued a "buy" rating and issued a GBX 185 price target on shares of Shaftesbury Capital in a research report on Friday, May 15th. Jefferies Financial Group restated a "buy" rating and set a GBX 176 price target on shares of Shaftesbury Capital in a research note on Friday, May 15th. Finally, Berenberg Bank reaffirmed a "hold" rating and issued a GBX 151 price objective on shares of Shaftesbury Capital in a research note on Wednesday. Four analysts have rated the stock with a Buy rating and one has given a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of GBX 180.40.

Shaftesbury Capital Company Profile

Shaftesbury Capital PLC ("Shaftesbury Capital") is the leading central London mixed-use REIT and is a constituent of the FTSE-250 Index. Our property portfolio under management, valued at £5.4 billion, extends to 2.8 million square feet of lettable space across the most vibrant areas of London's West End. With a diverse mix of shops, restaurants, cafés, bars, residential apartments and offices, our destinations include the high footfall, thriving neighbourhoods of Covent Garden, Carnaby, Soho and Chinatown.

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