LAND SECUTIES (LAND) – COMMERCIAL PROPERTY
| Price: 624p -3.5% | P/E: 10x |
| Market Cap: £4.5bn | Yield: 6.8% |
On the face of it there was much to like in the Land Secs half-year report, but a combination of mixed earnings and a rubbish day for gilts meant the shares were the worst performer in the FTSE 100 in early trading.
EPRA earnings for the six months to September were £192 million against £186 million the previous year, helped by a 5.2% rise in LFL rental income, but a £67 million loss on disposals soured the overall picture.
On the plus side, chief executive Mark Allen said the firm continued to see ‘clear positive momentum’ across every part of the business and was benefitting from a sharper focus on generating sustainable earnings growth as its primary objective.
As a result, the company raised its near-term and medium-term rental income growth and EPS guidance, which on any other day would have seen the stock rally.
Our View
The combination of high-quality real assets, growing demand and accelerating earnings growth means shareholders should be able to look forward to a sustainable and rising dividend stream over the next five years.
Disclaimer: The author (Ian Conway) owns shares in Land Securities.
Read the press release here: https://www.landsec.com/en/investors/investors-overview
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