Shaftesbury looks ahead with confidence, despite drop in profits

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LONDON (ShareCast) - London property group Shaftesbury (Berlin: OVW.BE - news) has posted a fall in pre-tax profit, largely as a result of a decline in investment property valuation movements, an increase in finance costs, and the change in fair value of derivative financial instruments.

As such, pre-tax profit totalled £94.8m, compared to £115.7m the previous year.

However, EPRA (European Public Real Estate Association) adjusted pre-tax profit climbed 6.8%, or £2.0m, to £31.2m over the year, on net property income of £71.0m (2011: £66.6m).

Like-for-like estimated renetal value (ERV) growth of 6.0% was seen throughout the 12 months, while vacancy levels continued to be low.

The final dividend will by 6.05p (2011: 5.75p), giving a total payment of 12.0p per share, compared to 11.25p the previous year.

The company said it saw some short-term disruption, particularly to West End visitor numbers, but assured there has been no discernible effect on its business.

In a statement the company said: "Our portfolio, which has been valued at £1,828.2m, delivered a capital value return of 5.5%, through a combination of rising current income, growth in ERVs and yield improvement of 14 basis points. This is in contrast to our benchmark, the IPD Monthly Index, which reported a fall in capital values of 3.1%.

"EPRA diluted net asset value (NAV) per share stood at £4.98 at September 30th 2012, an increase of 35p or 7.6% over the year. The increase before distributions to shareholders amounted to 46.7p or 10.1%."

Looking ahead, Chairman John Manser added: "Since the summer the West End has become even busier and we are seeing unusually high levels of interest from retailers, restaurant operators and other businesses seeking to come to our areas.

"It is clear that the UK and other western economies will continue to face structural challenges for some considerable time. Uncertainty regarding the timing and pace of recovery is causing subdued business and consumer confidence. However, with its unique status as a leading global city, London attracts businesses, visitors and those who wish to live here from across the world, underwriting the long-term prospects for continuing prosperity in the West End.

"I am confident that, with our proven strategy and long experience of this exceptional location, our portfolio will continue to deliver attractive long-term returns for our shareholders."

The share price rose 0.82% to 551.50p by 08:22.

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