British Land Company PLC

FY '26 underlying EPS was up 1% and underlying profit was up 5%. Like-for-like net rents grew 6%, adding 2.1p to EPS; Campus like-for-like growth was 12% and Retail was 2%, while development leasing added 1.4p and admin costs down 9% plus GBP 1 million higher fee income added 0.8p. Higher finance costs reduced EPS by 3.4p, including a 30 bps increase in weighted average interest rate to 3.9% and 2.4p from development interest no longer being capitalized. Portfolio values rose 2.3%, NTA per share increased 4% to 590p, and the total accounting return was 8.1%. The Board proposed a final dividend of 10.8p, taking the full-year payout to 23.12p, up 1%. Looking to FY '27, management guided to like-for-like growth at the top end of 3% to 5%, around GBP 40 million of rents from development leasing completed over the last 18 months, a cost ratio around 17.5%, continued finance cost increases of 10 to 20 bps, and at least 30.5p of EPS. Gross-to-net margin guidance was discussed as moving back toward around 90% over time, after 87% to 88% for FY '27.

Simon Geoffrey Carter framed the quarter as a story of strong occupational markets and active asset management, saying the portfolio is concentrated in Campuses and Retail Parks, which are in supply-constrained sectors with strong demand. He emphasized record leasing, the AI-related demand backdrop for campuses, and the idea that British Land can outperform inflation because its markets are tighter than in 2022. His tone was confident and upbeat, but he repeatedly noted that development and investment decisions should be de-risked in the current higher-cost environment.

David Walker said FY '26 earnings came in ahead of his initial guidance, helped by 6% like-for-like net rent growth, development leasing, and cost discipline. He walked through the EPS bridge, citing 3.4p of headwind from higher finance costs, a 9% decline in admin costs, and a final dividend of 10.8p with total payout of 23.12p. On the balance sheet, he cited LTV of 39.2%, net debt-to-EBITDA of 7.7x, GBP 1.6 billion of liquidity, and no refinancing requirement until 2029; he also noted the company completed over GBP 3 billion of financing activity in the year. He said the Life Science REIT acquisition cost GBP 10 million, is immediately earnings accretive, adds 0.3p to FY '27 EPS, and was integrated using cheaper British Land facilities.

Analysts focused on tenant credit risk, the new commercial paper program, development economics, margin progression, West End valuation softness, retail growth splits, and Canada Water. Management said smaller science and tech occupiers are managed through shorter leases, deposits, and fast reletting, while HQ space requires strong credit; Simon said Anthropic was an acceptable covenant risk given its growth and estimated valuation. On margins, David said the FY '27 gross-to-net improvement depends on lower void costs as developments lease up, and he expects margins to move back toward 90% over time. They also said the commercial paper program is back-to-back with RCFs, likely to grow toward GBP 400 million, with a roughly 50 bps-plus margin advantage versus the RCF.