|
 Financial Results
Financing and Capital Structure
Banking Finance
Financing statistics
Securitisations
US Dollar Private Placement 2015
Dividend
Cash Flow
|
Financial Results
Gross rental income for the six months to September
2003, including our share of joint ventures, increased by
1.7% to £270.6 million (2002: £266.2 million). Group gross
rents increased £13.7 million (6.4%), whereas our share of
joint venture gross rents declined by £9.3 million (17.4%)
reflecting the active property disposal programme in the
joint ventures. Group net rental income for the period rose
4.6% to £209.4 million (2002: £200.1 million) mainly as a
result of rent reviews and new lettings.
British Land’s share of joint venture operating profits
reduced by 14.1% to £39.1 million, again reflecting the
disposals of joint venture properties.
Profit before tax increased by £21.8 million to £87.1
million (2002: £65.3 million). Profits on sale of fixed assets
in the six months amounted to £15.9 million (2002:
£3.1 million) and trading profits £6.0 million (2002: £nil).
Underlying profits before tax, excluding these items,
increased by 4.8% to £65.2 million (2002: £62.2 million).
|
 |
|
 |
Langlands & Bell
Opening/Capture, 2003 – Triton Square
Ben Langlands and Nikki Bell encourage public involvement in
their art with this double-spiral stone bench. Its sculptural form
both exposes and encloses, its sinuous shape counterbalancing
the angularities of its city-square setting.
|
|
The tax charge for the six months is £11.5 million, an
effective rate of 13.2% (2002: £12.8 million, 19.6%).
Adjusted diluted earnings per share increased to
15.5 pence (2002: 10.5 pence).
Adjusted diluted net assets per share increased by
5.8% from 30 September 2002 and by 1.2% from 31 March
2003 to 870 pence, from 860 pence.
Back to Top 
|
Financing and Capital Structure
Approximately 50% of the Group’s property value is
financed by borrowings from a variety of sources and with
a spread of maturity dates. The Group’s financial risk
management policy is to maintain approximately 85% of
debt at fixed and capped rates with debt taken out under a
range of maturities, including long-term facilities in order
to match the Group’s income profile from its long lease
lengths. These policies concentrate economic exposure to
the property market and our portfolio’s performance, and
minimise exposure to short to medium-term interest rate
movements. The Group borrows using fixed and floating
rate debt and uses interest rate derivatives to produce the
desired interest rate profile for the Group’s finances.
At 30 September 2003 net debt is £4,344.5 million
(31 March 2003: £4,361.4 million). Securitised debt of
£2,832.7 million (31 March 2003: £2,878.2 million) is ringfenced
with no recourse to other Group companies
or assets.
The Group’s mortgage ratio remains unchanged at
49%. The mortgage ratio including the Group’s share of
joint venture debt is 52% (31March 2003: 52%).
The Group’s weighted average interest cost is 6.26%,
of which 83% is at fixed or capped rates of interest,
with a weighted average debt maturity of 18.0 years
(31 March 2003: 18.0 years). This long-term debt maturity
profile balances the Group’s average unexpired lease term
of 17.0 years.
|
|
|
 |
Edward Hodges Bailey
The Battle of St Vincent, 1797 – Triton Square
Found to be ‘surplus to requirements’ for the decoration of the
original Marble Arch created in 1826, this marble frieze has
now found a home in Regent’s Place. Depicting Nelson’s
victory at Cape St Vincent in 1797, this is the first time it has
been displayed for over 170 years, its new home means that
it is now secured for the Nation.
|
|
At 30 September 2003 the market value of net
debt and interest rate derivatives was £467.1 million more
than their book values. The decrease of £19.6 million
from 31 March 2003 largely reflects higher underlying interest
rates, offset to some extent by reductions in our credit
spreads.
Back to Top
Banking Finance
The Company took the initiative during the period to
update the standard banking covenant package it offers its
wide range of bank lenders. The Company has bilateral
and syndicated facilities from 60 banks – in aggregate
these amount to £1.7 billion, of which £0.8 billion is committed,
available and undrawn – and all these facilities
continue to be provided on the basis of a similar document
incorporating the same financial covenants. The new
covenant replaced the provisions limiting secured debt at
50% of adjusted capital and reserves with a new limit
of unsecured debt to unencumbered assets of 70%.
The overall gearing limit of 175% of adjusted capital and
reserves was not changed. The revision was agreed and
documented on all bank facilities.
The financial arrangements with our banks provide a
sound basis for future funding with all important flexibility
to maintain our opportunistic business model.
A five-year syndicated loan facility was successfully
completed over the summer incorporating the
new covenant package and was oversubscribed raising
£285 million. We have since agreed new and renewed
bilateral facilities of £155 million.
Back to Top
| Financing statistics (Group) |
30 September
2003 |
31 March
2003 |
 |
| Net debt |
£4,344.5m |
£4,361.4m |
| |
Weighted average debt maturity |
18.0 years |
18.0 years |
| |
Weighted average interest rate |
6.26% |
6.31% |
| |
% of net debt at fixed or capped interest rates |
83% |
83% |
| |
% of debt ringfenced with no recourse to other companies or assets in the Group |
63% |
64% |
| |
| Interest cover (net rents/net interest) |
1.53x |
1.60x |
| |
| Cash and available committed facilities |
£1,779.1m |
£1,635.4m |
| |
of which drawn |
£907.6m |
£899.0m |
|
Back to Top
Securitisations
On 14 April 2003 the Group issued a further £50 million
of Notes securitising the rental income stream from
Meadowhall. This is in addition to the £825 million of Notes
issued in December 2001. The weighted average interest
rate of the issues is 5.5% and the weighted average
maturity is currently 19.9 years.
On 7 July 2003 the Group paid £73.5 million to
redeem the outstanding Class D Fixed/Floating Rate
Unsecured Notes 2014 issued as part of the Broadgate
Securitisation. These Notes, which had a coupon of
7.1107% and a weighted average maturity of less than two
years, were redeemed at a premium of £1.7 million.
On 6 October 2003 the Group issued a further
£75.5 million of Notes securitising the rental income
stream of certain Sainsbury’s Supermarkets raising
proceeds of £84 million at an effective rate of 5.8%. The
weighted average interest rate of the total issue is 6.77%.
The current weighted average maturity is 15.1 years.
Back to Top
US Dollar Private Placement 2015
On 3 October 2003 British Land issued US$154 million
6.30% Senior Notes due 2015 as a further US private
placement to institutional debt investors. A cross-currency
swap was simultaneously executed, effectively converting
the issue into Sterling at a fixed rate of 5.999% for
the term.
Back to Top
Dividend
The directors declare an interim dividend of 4.43 pence
per share payable on 20 February 2004. This represents
an increase of 8.0% over the 2002 interim dividend
of 4.1 pence per share and is in line with our policy of
progressive dividend growth.
Back to Top
Cash Flow
Profits after interest, tax and working capital movements,
generated a positive operating cash flow for the six months
of £65.9 million (2002: £20.3 million).
Property and investment disposals by the Group
and cash returns from joint ventures realised cash of
£137.7 million. Property acquisitions, developments
and investment expenditure by the Group amounted to
£132.3 million.
Graham Roberts Finance Director
25 November 2003
Back to Top
| 
