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Workspace Grp Plc - Half-year Report


Workspace Group Plc

Stong Customer Demand

10% Growth in Dividend 

Workspace Group PLC ("Workspace") is pleased to announce its results for the six months ended 30 September 2019. The comments in this announcement refer to the period from 1 April 2019 to 30 September 2019 unless otherwise stated.

Workspace's differentiated business model, which combines property ownership, inspiring flexible work spaces and direct customer relationships, has delivered a strong performance as set out below:

Financial highlights

  • Net rental income up 11% to £60.1m and trading profit after interest up 13% to £40.1m
  • Underlying increase in property valuation in the six months of 2.2% (£59m) to £2,682m
  • Profit before tax, including a lower revaluation surplus and no disposal profits, marginally down at £99.1m (September 2018: £101.6m)
  • EPRA net asset value per share up 2.7% in the six months to £11.15
  • Loan to value stable at 22% with £111m of undrawn facilities and cash
  • Increase of 10% in the interim dividend to 11.67p

Operating performance

  • Strong customer demand with enquiries averaging 1,109 per month (H1 2018/19: 1,020) and lettings averaging 127 per month (H1 2018/19: 92)
  • Total rent roll up 2.3% in the six months to £130.4m (31 March 2019: £127.5m)
  • Successful letting-up of new space with Completed Projects rent roll up 16% to £22.9m
  • Like-for-like rent roll up 1.0% to £94.0m with rent per sq. ft. at £41.01, down 0.2%, offset by occupancy up 1.1% to 91.8%

Portfolio update

  • Three properties exchanged for sale for £49.5m at a 27% premium to 31 March 2019 valuation
  • Four refurbishment projects delivering 200,000 sq. ft. completed in first half and letting up well
  • Five refurbishment projects and four redevelopments underway which will deliver a further 309,000 sq. ft. of new and upgraded space
  • New 55,000 sq. ft. building in Hackney opening in the second half of the year

Commenting on the results, Graham Clemett, Chief Executive Officer said:

"I am delighted with this strong set of results, my first as CEO. Our robust enquiry and letting levels reflect the appeal of our offering as an increasing number of occupiers look for flexible terms for their office space requirements. The 10% increase in the interim dividend we have announced today reflects our success to date and the Board's continued confidence in our future growth prospects.

The new centres we launched last year have let up well with The Frames in Shoreditch fully let within 12 months of opening. We have completed a further four projects in this half year, with another new building in Hackney to be launched in the second half. We have a robust pipeline of project activity which will continue to deliver high quality space across our portfolio and fuel income growth.

It will come as no surprise that I remain committed to our proven and successful strategy. My priority is to ensure that we continue to invest in and adapt our operational capabilities to remain at the forefront of this exciting and growing market. Our strong balance sheet also gives us the ability to take advantage of acquisition opportunities as they arise."