Capital return to profit

23rd Mar 2011 11:56

Capital & Regional Properties returned to profit in 2010 thanks to a positive contribution from associates and joint ventures. Associates and joint ventures loss £106.8m in 2009 but they contributed £45.2m in 2010. This led to a swing from a loss of £113.4m to a pre-tax profit of £46.4m. This enabled net assets per share to recover from 37p to 50p. The EPRA equivalent has risen by one-fifth to 57p a share.However, recurring pre-tax profit fell from £17.5m to £14.9m. This is classed as earnings from Capital & Regional's own businesses plus its share of net rental income on properties, whether wholly owned or owned by joint ventures.Underlying group net debt was £49.8m at the end of 2010. The revolving credit facility of £58m is not being used at the moment. There is off balance sheet net debt of £414.9m. Capital & Regional specialises in the retail sector and it recently completed the purchase of Waterside Shopping Centre in Lincoln. The strategy is to take meaningful stakes alongside joint venture partners and to generate asset management and performance fees. Retail property valuations have been resilient because investors are keen on retail property. However, retailers are still finding trading tough. Management believes that Germany is an attractive market.