Annual Financial Report

RNS Number : 9440P

British Land Co PLC

11 June 2015

 



Annual Financial Report and Annual General Meeting

The British Land Company PLC (the Company) announces that in accordance with Listing Rule 9.6.1, copies of the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

1.   Annual Report and Accounts 2015 (the Annual Report);

2.   Notice of 2015 Annual General Meeting (the AGM Notice);

3.   Form of proxy;

4.   Form of direction for participants in The British Land Share Incentive Plan; and

5.   Notification of availability of the Annual Report and the AGM Notice on the Company's website.

The above documents have been posted or otherwise made available to shareholders. In accordance with DTR 6.3.5R(3), the Annual Report and the AGM Notice will also be available on the Company's website at www.britishland.com shortly.

The Company's AGM will be held at 11.00 am on Tuesday 21 July 2015 at The Montcalm London Marble Arch, 34-40 Great Cumberland Place, London, W1H 7TW.

The information below, which is extracted from the Annual Report, is provided in compliance with DTR 6.3.5R. It should be read in conjunction with the Company's Final Results announcement issued on 14 May 2015. The Annual Report and the Final Results announcement are available at www.britishland.com. This announcement and the Final Results announcement together constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the Annual Report. Page numbers and cross-references in the extracted information below refer to sections in the Annual Report.

Chairman's statement

We have continued to ensure our portfolio comprises attractive, well located assets focused around the way people work, shop and live. Our decision to increase our exposure to London and invest in the continued reshaping of our retail portfolio has enabled us to benefit from strong markets, and our business has continued to do well.

Over the year, we undertook £2.4 billion of gross investment activity, increasing our weighting in London and the South East from 50% five years ago to 64% today. Activity included the recent acquisition of One Sheldon Square, a strategic piece of Paddington Central, which brings our total investment at the campus to 800,000 sq ft. We continued to reshape our retail portfolio, reducing our investment in superstores to under 7% of the portfolio and increasing our investment in assets we like, such as multi-let shopping parks in the South.

We had an exceptional period for leasing with 2.4 million sq ft of lettings and renewals across the business taking our overall occupancy to 98%.

We also progressed our development programme. At the Leadenhall Building, we completed one of London's most iconic buildings. The letting up of the building was one of the highlights of the year. We decided early on to focus on the lower floors, holding back the higher floors until the building was completed. This strategy has paid off; the Leadenhall Building is now 84% let at record rents. We completed a new restaurant re-development at Broadgate Circle, delivered extensions on almost 200,000 sq ft of retail assets, and pre-sold over half of the apartments at Clarges Mayfair, our super-prime residential development. At Paddington, we are now on site at 4 Kingdom Street constructing a further 147,000 sq ft of office space.

Successful property companies today need to be more than just good investors; they need to really understand the needs of occupiers and their end users. Our strategic focus to create Places People Prefer kept us busy and is the reason our properties are in demand and are virtually fully let.

The market is constantly changing and we need to ensure we keep pace and respond to some of the key macro trends including urbanisation, and the transformational impact of technology. This is having a profound effect on the way people live and the way they use real estate. We have made significant efforts in recent years to understand the people who visit our properties and have repositioned our portfolio to serve their needs and to reflect the way the market is changing.

Creating environments is what British Land does best and where we have a real competitive advantage. This continued focus is delivering attractive long term returns for our shareholders. Underlying pre-tax profit was up 5.4% to £313 million. The value of our portfolio now stands at £13.6 billion and NAV was up 20.5% to 829 pence per share. The Board has recommended a fourth quarter dividend of 6.92 pence per share making a total of 27.68 pence for the year. The total accounting return was 24.5%.

Our social and environmental initiatives make a real and positive difference, adding value to our assets. Our activities are valued by our occupiers and the communities in which we operate and are integral to our approach to doing business. Our focus on sustainability is not new but this year we have further refined our priorities to ensure that we are responding to developing trends and opportunities. We focus on wellbeing, community, operational efficiency and developing skills and opportunities for growth. Our approach is one that has been recognised again this year in global indices and is a great endorsement of our activities.

In July 2014, Dido Harding stood down as a Non-Executive Director following her appointment as a non-executive director at the Court of the Bank of England. I would like to thank Dido for the very valuable contribution she has made to British Land. Following Dido's departure, Lord Turnbull agreed to stay on our board for a further two years as Senior Independent Director.

We appointed Lynn Gladden, pro-vice-chancellor for research and Shell Professor of Chemical Engineering at the University of Cambridge as a Non-Executive Director in March 2015. Lynn has strong business experience and throughout her career has forged partnerships with major industrial partners.

In May 2015, we also appointed Laura Wade-Gery, executive director Multi Channel, Marks and Spencer plc as a Non-Executive Director. Laura brings huge retail experience, particularly of e-commerce and multi channel markets. Both appointments further broaden the experience of our Board.

We have done much to reposition the portfolio and we are well placed to benefit from the wider macro trends influencing real estate today. While the recent General Election has removed one element of uncertainty others remain, but I am confident that we are well placed to deliver continued outperformance, and look forward to the year ahead.

Related party transactions

The Company is providing a development loan facility of up to £320m to the Broadgate joint venture, secured against the development, 5 Broadgate. The loan, which is assignable and on commercial terms, includes an interest cost of 3% per annum above LIBOR and market based fees. As at 31 March 2015, £243m (2013/14: £145m) has been drawn by the joint venture. Interest and commitment fees earned on the commercial loan to the Broadgate joint venture was £8m (2013/14: £5m).

Details of transactions with joint ventures and funds are given in notes 4, 7 and 24. During the year the Group recognised management and performance fees receivable from funds of £nil (2013/14 £3m) and joint venture management fees of £7m (2013/14: £7m).

Details of Directors' remuneration are given in the Remuneration Report on pages 86 to 112. Details of transactions with key management personnel are provided in note 9.

Details of transactions with The British Land Group of Companies Pension Scheme, and other smaller pension schemes, are given in note 10.

During the year, the Company entered into transactions, in the normal course of business, with other related parties as follows:

John Gildersleeve is Deputy Chairman of Carphone Warehouse Group plc. Rental income of £11m (2013/14: £2m) was earned from Carphone Warehouse Group plc and there is an associated debtor balance at 31 March 2015 of £1m (2013/14: £nil).

Lord Turnbull is a non-executive director of Prudential plc. Rental income of £2m (2013/14: £2m) was earned from Prudential plc.

Aubrey Adams is head of property in Royal Bank of Scotland's Global Restructuring Group. Royal Bank of Scotland are British Land's principal bankers. Rental income of £7m (2013/14: £7m) was earned from Royal Bank of Scotland.

William Jackson is the Managing Partner of Bridgepoint and serves on a number of Bridgepoint portfolio boards. A number of Bridgepoint's investments are tenants. Rental income of £3m (2013/14: £3m) was earned from these companies.

During the year two related parties of Simon Borrows agreed to purchase two one-bed residential flats in London from a wholly-owned subsidiary of the Group, at a combined value of approximately £4m. Negotiations were conducted at arm's length, involved independent real estate agents marketing the relevant developments, and the terms are similar to those negotiated with other purchases at the same development.

Directors' responsibility statement

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

-     select suitable accounting policies and then apply them consistently;

-     make judgements and accounting estimates that are reasonable and prudent;

-     state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent Company financial statements respectively;

-     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess a Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the governance and remuneration section confirm that, to the best of their knowledge:

-     the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

-     the Strategic Report and the Directors' Report include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

By order of the Board.

Lucinda Bell

Chief Financial Officer

13 May 2015

Enquiries:
Company Secretariat Silvana Glibota-Vigo, British Land	020 7467 3387

 

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