Capital & Regional, which owns a portfolio of community shopping centres in the UK, bounced back into the black in 2022 as the lifting of remaining Covid-19 restrictions led to an increase in shoppers and improved rent collection rates.
The real estate investment trust (REIT), which is 61.5% owned by SA-based Growthpoint Properties, reported a profit of £12.1m (R263.36m) for the 12 months to end-December compared with a loss of £26.4m a year ago and declared total dividend of 5.25p per share.
Higher net rental income, along with lower interest payable, lifted the contribution from shopping centres by more than half to £14.2m, while debt was reduced by 29.4% to £130.9m.
“Despite the broader macroeconomic headwinds throughout the year, the continued retail recovery from Covid and a robust Christmas trading season have helped us drive a strong operational performance in 2022,” CEO Lawrence Hutchings said.
“We are now able to focus on investing in our portfolio, allowing us to further reposition and re-merchandise our centres at the heart of the local communities that we serve,” he added.
Capital & Regional’s primary listing is on the London Stock Exchange (LSE) with a secondary listing on the local bourse, where it is valued at R2.18bn.
In 2019, Growthpoint took a controlling stake in the REIT, which owns shopping centres in Hemel Hempstead, Ilford, Luton, Maidstone, Redditch, Walthamstow and Wood Green.
Revenue jumped 11% to £60.6m, the average occupancy rate improved by 1.1 percentage points to 94.1%, while rent collections were back in line with pre-pandemic rate, at 97.6%.
Chair David Hunter said that despite fears that the recent economic downturn — due to high global inflation, interest rate hikes and a big increase in energy prices in the UK — would hurt Christmas trading, retail sales were robust, though slightly lower than in 2019 before the pandemic struck.
“Another notable positive trend during the year was the slowdown in the growth of online retail as reflected in challenges faced by a number of online only retailers, coupled with a widespread recognition that an omnichannel offering is an optimum model for retailers,” he said.
That was evident in shopper visits, which rose more than one-quarter to 53-million as footfall continued to recover to pre-2019 levels.
“Based on these trends, the company enters 2023 optimistic that our business model of community centres, meeting the needs of customers for non-discretionary goods and services, is well placed to benefit from a steady recovery in physical retail and weather the current economic headwinds,” Hunter said.
Despite the recent upbeat share price, the company’s share price is down more than 80% over the past five years.
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