Land Securities Group plc

For the half year, Landsec reported 5.2% like-for-like income growth, EPRA EPS up 3.2%, and an interim dividend up 2.2%. Gross-to-net margin improved by 130 basis points to 87.7%, while office like-for-like income rose 6.8% and retail like-for-like income rose 5.0%. NTA per share was down 1.3% to 863p, mainly because of capital recycling, and LTV stood at 38.9% pro forma for the disposal since the end of September. Management raised full-year like-for-like net rental income growth guidance to around 4% to 5% from 3% to 4%, and said FY26 EPS is now expected at the top end of the 2% to 4% range. They also lifted FY30 EPS potential from around 60p to 62p, and said the QAM sale will reduce reported FY26 earnings by GBP 7 million and FY27 earnings by GBP 15 million.

Mark Allan emphasized that Landsec’s strategy is now centered on sustainable income and EPS growth, with a portfolio concentrated in best-in-class office and major retail assets making up over 90% of income. He said customer demand for high-quality space remains strong, occupancy is at a decade high, and the company is well positioned to keep rotating capital out of lower-return assets and into retail over the next 12 to 18 months. His tone was confident and defensive of the strategy, repeatedly stressing that the company is on track or ahead on all nine objectives set in February.

Vanessa Simms highlighted the financial drivers behind the half: net rental income up GBP 15 million, supported by GBP 12 million of like-for-like income growth; overhead costs down GBP 2 million; and EPRA earnings up GBP 6 million, or 3.2%. She noted gross-to-net margin improved to 87.7%, average debt maturity remains long at 8.9 years, and the balance sheet remains robust with LTV at 38.9% and no debt needing refinancing until 2027 at the earliest. She also reiterated the company’s target to reduce net debt-to-EBITDA to below 7x within 2 years, down from the prior below-8x target, as developments complete and lease up and development exposure falls.

Analysts focused on the outlook for residential development, the pace and source of retail acquisitions, share buybacks, and whether FY27 earnings guidance looked hard to reach. Management said residential is more of a later-2026 decision once policy changes are clearer at project level, and that retail remains the preferred capital destination because major shopping centers are scarce and offer better risk-adjusted returns. On buybacks, Mark Allan said they are on the framework and would be considered, but at present deploying into major retail is more accretive than buying back shares. When challenged on FY27 EPS, Vanessa said the guidance is supported by ongoing like-for-like growth, cost cuts, and development lease-up assumptions, while Mark said the number does not rely on massive disposal activity.