Capital & Regional has generated £1.8m of cost savings following an internal cost review which analysts expect to drive profit growth.
The savings are expected to be realised by 2018 and the company’s new chief executive Lawrence Hutchings indicated that more could be made.
“We see opportunity to further enhance profitability by seeking greater efficiency in our operating platform and streamlining our structure through various initiatives,” he said.
“Some of these are already delivering tangible results and we are initially targeting annualised savings of at least £1.8m by 2018, equivalent to a c 20% reduction in 2016 central costs.”
In a note to investors, analysts at JP Morgan said the £1.8m saving was “equivalent to a 5.7% uplift to our 2018 estimated adjusted profit forecast of £31.8m.”
The news came in half year results which showed a modest drop in EPRA net asset value (NAV) and continued growth in adjusted profits in half year results.
EPRA NAV per share was 67p, down from 68p in December last year, while adjusted profits rose by 6.6% to £14.5m boosted by strong lettings figures.
Like-for-like net rental income increased 0.5% and would have grown by 4.4% without the loss of income from BHS.
During the half year, the business signed 34 new lettings and renewals at an 8.4% premium to estimated rental value.
Hutchings said: “This is a strong set of results which reflect that whilst elements of the retail sector may face challenges, the continued strong occupier demand for our centres as well as the local and convenient nature of our assets, which cater for the non-discretionary and value-orientated needs of our shoppers, gives us great comfort over the security of our income.”