Sir Robert Finch, Chairman of Liberty International, commented: "The interim results to 30 June 2005 show Liberty International to be in vibrant good health with a portfolio of first class assets, the market leadership in the UK's regional shopping centre industry, a promising development programme and a skilled and experienced management team at all levels.
These are the first results we have produced under International Financial Reporting Standards ('IFRS') which change the presentation and format of the Interim Results; however they have no impact on the cash flows of the business or its present strategic direction. Looking at the underlying picture, we have extended our track record of consistent growth and, with a further positive revaluation in the period, the aggregate value of our property investments has increased from £5.3 billion to £6.2 billion."
Financial highlights for the six months ended 30 June 2005
- Investment and development properties increased from £5.3 billion to £6.2 billion with over £700 million of net additions in the six month period, particularly the £653 million acquisition of interests in Manchester Arndale and The Mall at Cribbs Causeway, Bristol.
- Revaluation surplus of £196 million, with the market value of completed investment properties increasing by 3.2% in the six month period an underlying 5.1% increase adjusted for the withdrawal in the period of disadvantaged area relief from stamp duty land tax.
- Net assets (diluted, adjusted) increased from £3.61 billion to £3.82 billion. Net assets (IFRS basis) increased from £2.53 billion to £2.59 billion.
- Net assets per share (diluted, adjusted) increased from 1025p to 1085p in the six month period, amounting to a 7.3 per cent total return. Adjusting for the £108.5 million (32p per Liberty International share) one-off impact of the withdrawal in the period of disadvantaged area relief from stamp duty land tax, the total return would have been 10.7% for the six months.
- Net rental income increased by £18.8 million from £125.0 million to £143.8 million, with £6.7 million of the increase (5.5%) coming from underlying rental growth, particularly rent reviews at Braehead, Renfrew, and the balance from completed developments and acquisitions.
- Underlying profit before tax excluding valuation items, exceptionals and trading profits increased by 6.3% from £50.6 million to £53.8 million.
- Profit before tax in IFRS Income Statement of £130.1 million (30 June 2004 - £277.3 million), reducing basic earnings per share from 62.4p to 28.8p, impacted by the £114.3 million decrease in fair value of derivative financial instruments (30 June 2004 increase of £46.8 million). These movements result from Liberty International predominantly financing itself by floating rate debt with interest rate exposure reduced by interest rate swaps; substantially all interest payments on existing debt and in respect of committed capital expenditure are fixed for the next ten years.
- Adjusted earnings per share of 13.3p (30 June 2004 - 13.9p, year ended 31 December 2004 27.1p), reflecting lower trading profits in the first half of 2005 of £0.6 million (six months ended 30 June 2004 - £6.8 million). Further trading profits are anticipated in the second half of 2005.
- Investment properties are valued after deducting notional purchasers' costs including stamp duty land tax amounting to £272 million, equivalent to 77p per Liberty International share, on the theoretical assumption that assets are sold individually on the open market, without taking account of the structures through which assets are held.
- Regional shopping centres amount to 86% of aggregate investment properties and retail overall amounts to 93%.
Development programme
- 530,000 sq.ft. Chapelfield, Norwich, development scheduled for September 2005 opening with lettings agreed or solicitors instructed for 91% of anticipated income.
- Manchester Arndale Northern Extension, increasing the size of the centre from 850,000 sq.ft. to
