Segro confident despite tough conditions

23rd Aug 2011 07:24

Real estate group Segro posted a 56.6% drop in half year pre-tax profit while rental income fell 6.1% as occupier markets recover slowly.Pre-tax profit fell to £64.6m in the six months ended 30 June 2011 from £148.9m the same a year earlier. Net rental income fell to £135.5m during the period from £144.3m before.Like for like net rental income increased by 5.1% while customer retention rate improved from 58% to 74%.Chief executive David Sleath said, "Against a backdrop of slowly recovering occupier markets, our key priority has remained operational delivery, focused on customer retention, leasing, cost control and pre-let development.""We remain mindful of the broader economic and financial risks currently affecting markets and continue to take a prudent approach to managing the business."Group vacancy rate reduced to 11.4% at 30 June 2011 from 12% at 31 December 2010 and 14% at 30 June 2010.While the broader economic environment remains unsettled and difficult to predict the group said it remains well placed to make further operational progress. "The vast majority of our portfolio is located in or around the major cities such as London, Paris and Dusseldorf, or in growth markets like Poland and a strong, largely pre-let, development programme underway, " it said in a company statement.An interim dividend of 4.9p per share has been offered, up from 4.7p last time.CJ