Great Portland to launch £200m buyback as profits rise

Great Portland Estates announced plans on Thursday to buy back up to £200m of shares over the next 12 months as it posted a rise in first-half pre-tax profit.

In the six months to 30 September, pre-tax profit rose to £40.4m from £22.8m in the same period a year ago, even as revenue fell 22% to £50.8m.

EPRA net asset value increased 0.5% to 849p and the company lifted its interim dividend by 7.5% to 4.3p a share.

Meanwhile, the value of its portfolio increased by 0.6% on a like-for-like basis and rental value growth guidance for the year was upped to between 1.5% and -1%.

Chief executive officer Toby Courtauld said: "We are pleased to report another strong operational performance, led by leasing successes and development progress, delivering a solid set of financial results for the first half and continued capital discipline through a further return of surplus capital to shareholders.

"Whilst we expect, and are planning for, continued political and economic uncertainty, particularly given the ongoing Brexit negotiations, GPE remains exceptionally well positioned: Our well-located portfolio is full of opportunity, with 92% in close proximity to a Crossrail station; our properties are let off low rents with significant further reversionary potential; our exceptional income-producing development pipeline offers nearly 1.3 million sq ft of flexible future growth potential, meaning that we have no need to buy. But if any market weakness should emerge, we retain significant financial capacity to exploit it; meanwhile, our talented team remains focused on maximising the opportunity we have to generate long-term value across our business."

As far as the buyback is concerned, Great Portland said it expects to review the size and timing regularly, including potentially ceasing the programme, "as the future direction of the UK economy becomes clearer and should the scale and speed of our property sales and acquisitions evolve from our expected path".

At 1020 GMT, the shares were down 0.6% to 740.80p.