London’s West End property investor Shaftesbury (SHB) fell 2.6% to 583p as first half results revealed big scars from the pandemic.

Pre-tax losses for the six months through March amounted to £338.5 million, compared to year-on-year losses of £287.6 million, and included negative property revaluations of £342.6 million.

Rental income fell 19% to £48.9 million amid occupier support, reduced rent collections and increased vacancy. The collection rate on rents for the six-month period was just 43%. EPRA earnings, an underlying measure watched by analysts, slumped 92% to £2.1 million.

‘RETURN OF CONFIDENCE’

More positively the company said a phased lifting of Covid-19 restrictions was already resulting in a return of confidence and activity as more-normal patterns of life resume. Shaftesbury also declared an interim dividend of 2.4p per share, compared to no payment year-on-year.

Numis analyst Poonam Lodhia is less optimistic and commented that Shaftesbury’s retail, hospitality and leisure units face heightened vacancy rates as well as further declines in rent collection and valuation.

Lodhia noted that despite this the shares were trading at a premium to asset value and added: ‘While Shaftesbury is a clear re-opening play and in our view, is better positioned vs peer Capital & Counties (CAPC) given Shaftesbury's higher dependence on domestic worker and tourist footfall and its mid-market price merchandising line-up, we believe the current share price shows that sentiment is disconnected from fundamentals.’

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Issue Date: 25 May 2021