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Interim Results

KWE net after-tax profits fall

04 August 2017 07:23

Kennedy Wilson Europe Real Estate's net profit after tax fell by 30.2% to £54.9m in the six months to the end of June.

Net operating income rose by 1.3% to £79.7m and adjusted earnings were up 7.5% at £38.9m.

Thew group said operational highlights included:

- Portfolio value at £2,910.41 million, generating annualised topped-up NOI4 of £160.0 million across 207 properties

- Strong asset management momentum continues, completing 76 commercial lease transactions (1.1 million sq ft), delivering an uplift over previous passing rent of 13.1% and outperforming valuers' ERVs by 5.2%

- Secure income underpinned by long WAULTs of 7.4 years (9.3 years to expiry) and solid portfolio occupancy of 93.6% · - Non-core disposal programme has gained further traction, delivering £57.6 million of sales across 15 properties at a spread of 219bps over entry yield on cost; achieving a premium to book value of 6.1% and generating a return on cost of 29.5%

- Practical completion at Pioneer Point, Ilford, saw the launch of KWE's professionally managed PRS operation in London with 135 brand new units to let in the South tower and a best-in-class amenity offering

- 73,000 sq ft agreement for lease with global online fashion retailer, ASOS, for a new 10-year lease; the largest letting of the year in the South East office market

Financial highlights were:

- 2.1% increase in Adjusted NAV per share to 1,241.4 pence (Dec-16: 1,215.9 pence)

- Dividends paid of 24.0 pence per share or £30.2 million

- Low weighted average cost of debt of 3.0%, with 93% of debt fixed or hedged

- Debt term to maturity at 5.6 years; LTV of 42.4%, within target range of 40-45%

Chairman Charlotte Valeur said: "KWE has delivered another strong set of results over the past six months, having carefully navigated the market with solid leasing progress and capitalised on opportunistic disposals.

"The performance is once again underpinned by smart asset management to generate stable cash flows.

"As such, the board is pleased to announce a further quarterly interim dividend of 12.0 pence per share to be paid in Q3-17."

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