Property developer Derwent London reported a drop in net tangible assets and a negative total accounting return for the first half, reflecting outward yield movements and a provision taken at Old Street Quarter, EC1.
Net tangible assets fell 2.1% to 3,157p from December’s 3,225p, while total accounting return came in at ‑0.4%, weighed down by a £45.8m provision on Old Street Quarter and modest yield softening across its portfolio. Adjusting for those factors and value accretion from buybacks, Derwent said the underlying return would have been around 3.7%.
EPRA earnings per share slipped 6.7% to 48.7p, though came in ahead of guidance, helped by £1.5m of cost savings.
Operationally, Derwent said leasing remained robust, with the group completing £30.4m of transactions year‑to‑date, including £22.1m of new lettings at 5.1% above enterprise rental values and £8.3m of renewals/regears at a 6.5% uplift. EPRA vacancy rose slightly to 4.4%, or 3.5% excluding a building under offer.
Derwent said it had continued to execute on its capital‑allocation priorities, completing or exchanging on £279.3m of disposals at a 3% discount to book value, with a further £30m under offer. It remains on track for £400m of disposals this year and £1bn over three years.
The FTSE 250-listed firm said strong progress on disposals and a resilient balance sheet enabled the launch of a £50m buyback, with £33.4m repurchased so far, including £18.1m in H1 at an average 1,833p. Derwent’s interim dividend was also raised 2% to 26p. Net debt reduced to £1.38bn, with gearing metrics remaining comfortable.
Derwent added that it remained confident in its medium‑term targets, upgrading 2026 EPRA EPS guidance to 0% to ‑3%, reiterating ERV growth of 4% to 7%, and maintaining its ambition for 7% to 10% annual total accounting returns assuming stable yields.
As of 1150 BST, Derwent shares were down 3.88% at 2,030p.
Reporting by Iain Gilbert at Sharecast.com