Town Centre Securities (TOWN) H1 2025 earnings summary

Executive summary

• Delivered resilient and stable performance for the six months ended 31 December 2024, with continued progress on portfolio repositioning and debt reduction.

• All three operating divisions maintained underlying revenues and earnings despite challenging macroeconomic conditions.

• Retail and leisure assets stabilized at 30% of portfolio, residential increased to 13%, and gearing reduced below 100%.

• Portfolio value decreased 0.8% like-for-like, mainly due to market sentiment and valuation yield pressures, especially in the office sector.

• Maintained a diversified portfolio and low levels of variable interest rate debt, supporting financial stability.

Financial highlights

• Gross revenue rose 3.2% period-on-period to £16.6m; interim dividend maintained at 2.5p per share.

• Statutory profit before tax of £2.8m, reversing a £9.7m loss in HY24; statutory EPS at 1.0p versus a loss of 15.3p year-over-year.

• EPRA earnings were £1.8m (HY24: £3.8m, which included a £1.7m deferred tax credit), with EPRA EPS at 4.2p.

• Net borrowings reduced by 3.4% to £132.6m; LTV decreased to 50.1% from 50.8%.

• EPRA NTA per share and statutory NAV per share unchanged at 277p and 288p, respectively; net assets per share stable at 284p.

Outlook and guidance

• No further disposals expected; focus shifting to investment in existing properties and development pipeline, especially the Merrion Centre.

• Trading performance remains resilient into the second half of FY25, with robust rent collections and continued recovery in car parks.

• Significant headroom of £26.3m on revolving credit facilities and only 12.5% of borrowings subject to variable rates.

• Cost of living crisis and inflation remain concerns, particularly for leisure and retail sectors.

• Confidence in future performance supported by strong rent receipts and unique market positioning in Leeds and Manchester.