Annual Financial Report and Annual General Meeting
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 2017 (the Annual Report);
2. Notice of 2017 Annual General Meeting (the AGM Notice);
3. Form of proxy (including Notice of Availability); and
4. Form of direction for participants in The British Land Share Incentive Plan.
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 18 July 2017 at the Hyatt Regency London - The Churchill, 30 Portman Square, London W1H 7BH.
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 17 May 2017. 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
Not many people predicted the political outcomes seen over the last 12 months, not only in the UK, but around the world. It was certainly an eventful year.
But good businesses become stronger when they are put to the test and I am delighted to report that, despite uncertainty caused by the UK's decision to leave the EU, we have not only demonstrated the resilience of our business but also shown how our strategic approach enables us to respond to such issues.
In the weeks following the EU referendum there was a peak of uncertainty around the full impacts that would be felt by businesses and the UK as a whole. For us in very broad terms, we considered the potential impact on consumer confidence affecting our retail business and what the result could do to business confidence, in particular the choice of global organisations to locate large parts of their businesses in London.
Our strategic approach is based on long term trends. We track consumer and occupier expectations and key themes impacting our business to ensure we address these in creating Places People Prefer. As the worlds of work and leisure become increasingly connected this has led to our assets becoming more mixed use, so that people can fulfil the needs of multiple demands on their time. Our London office campus approach and multi-let retail centre focus has proved to be a real differentiator in this respect, creating not only outstanding buildings but enabling us to make substantial improvements to the overall environments in which they sit.
Many of our investments over the year have been to structure our portfolio around these themes and of course work on the majority of them started before 23 June 2016. We had already positioned our business to respond.
So despite the uncertainty caused, British Land has performed well and I would like to thank everyone who works for and with us for their contribution during this unpredictable time. Underlying Profit for the year was £390 million up 7.4%. The valuation of our portfolio was marginally down 1.4% with EPRA NAV down just 0.4% at 915 pence per share with both occupier and investor demand remaining good over the year. Significantly, valuation performance in the second half was stronger than the first.
The Board has recommended a fourth quarter dividend of 7.3 pence per share making a total of 29.2 pence for the year. Together with the movement in net asset value, this brings total accounting return to 2.7%. We have proposed a first quarter dividend of 7.52 pence per share and 30.08 pence for the financial year ending 31 March 2018 representing a further 3% increase, signalling our confidence in growing income over the medium term.
Last year I commented that macro-economic and political risks had affected the FTSE 100. Shares in real estate have been significantly impacted by uncertainty. As a largely domestically focused business operating in sterling, UK REITs are more exposed to the implications of Brexit on the UK economy than the majority of the FTSE 100. Experience also shows that gaps between share price and reported values expand during times of uncertainty and there continues to be a wide range of views on the potential impact of the UK's decision to leave Europe on our markets.
So while our business is in good shape we acknowledge that the environment is more uncertain. We have led our sector in a number of outstanding deals reflecting the quality of our portfolio. Just a couple of weeks after the EU referendum we exchanged on the sale of Debenhams' flagship store on Oxford Street for £400 million, on terms agreed before the vote. And in March 2017, together with our JV partners Oxford Properties, we exchanged contracts for the sale of The Leadenhall Building for a headline price of £1.15 billion, the most expensive building ever sold in the City of London.
We've also had good letting activity over the year; solid evidence that our properties are delivering what our customers want. As a result our portfolio is virtually full at 98%. In a changing world, sustainable places are becoming increasingly sought after and continue to create value as they are both resilient and well positioned to respond to changing customer needs. We are proactively designing new buildings with a focus on health, wellbeing and productivity of the consumers and employees who will use those buildings. In addition, initiatives to deliver our Local Charter make positive local contributions and help our places become part of their local communities.
As the Government's Minimum Energy Efficiency Standards have the potential to affect property values, our award-winning efficiency programme has positioned our portfolio well and we have become a partner of RE100, committed to using 100% electricity from renewable sources. Our target for 3% of our UK supplier workforce to be apprentices by 2020 also aligns with Government ambitions and our Supply Chain Charter supported our first Modern Slavery Act Disclosure.
We continue to be recognised for our leading stance on sustainability issues, following our 2016 Queen's Award for Enterprise: Sustainable Development. Our industry-leading energy and carbon reductions resulted in British Land being named European Sector Leader in the 2016 Global Real Estate Sustainability Benchmark for the third year running, and winning the CIBSE Test of Time Award 2017. We have cut energy intensity by 35% and carbon intensity by 44% across our portfolio since 2009, as we make strong progress towards our challenging 55% reduction target by 2020.
Details of the changes to our Board and Committees during the year, and since the year end, are set out in the governance reports which begin on page 60.
Related party transactions
In the prior year the Group had provided a development loan of up to £320m to the Broadgate joint venture, secured against the 5 Broadgate development. The loan was fully repaid in the prior year and interest and commitment fees earned on the loan in the prior year were £4m.
Details of transactions with joint ventures and funds are given in notes 3, 6 and 11. During the year the Group recognised joint venture management fees of £9m (2015/16:£8m). Details of Directors' remuneration are given in the Remuneration Report on pages 73 to 88. Details of transactions with key management personnel are provided in note 8. Details of transactions with The British Land Group of Companies Pension Scheme, and other smaller pension schemes, are given in note 9.
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; and
· 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 the Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the governance and remuneration pages 56 to 59, 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
16 May 2017
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Enquiries:
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Company Secretariat |
020 7486 4466 |
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Investor Relations |
020 7486 4466 |
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