British Land jumps as H1 profit tops forecasts on leasing gains; outlook kept

Investing.com -- British Land shares jumped over 5% Wednesday after the company reiterated its full-year targets and reported a stronger first half of fiscal 2026 (HY26), marked by higher profit, rising portfolio values, and improving rental metrics.

The company’s underlying profit for the six months to September 30 rose 8.4% to £155 million, with underlying earnings per share (EPS) at 15.4 pence compared with 15.3p a year earlier.

UBS analysts said earnings were flattered by one-off gains but still ahead of the consensus of 14 pence.

"For HY26 EPS came well ahead of consensus at 15.4p. British Land noted that surrender premia and other one offs contributed positively and were in line with HY25; we estimate the net benefit at ~£20m for HY26," analysts led by Zachary Gauge wrote. 

Portfolio value increased by 1.2%, driven by a 1.6% uplift in Retail & London Urban Logistics and a 0.9% rise across its campuses. Estimated rental value grew 2.4%, in line with medium-term guidance, while EPRA occupancy improved by 500 basis points to 88%, helped by leasing progress at Norton Folgate.

Net equivalent yield stayed at 6.1%.

British Land reported EPRA NTA of 579p, up 2.1% since March. UBS said this was broadly in line, though slightly below consensus at 583p. The first-half total accounting return reached 4%, putting the company on track to deliver its 8–10% annual target.

“Occupational fundamentals continue to favour our prime London office campuses and retail parks. Office attendance is accelerating, retailers are expanding out of town, and supply remains very constrained across both markets," said Chief Executive Simon Carter in a statement. 

The group highlighted rising interest from artificial intelligence firms, with 11 leases signed with AI-led businesses since April, covering around 49,000 square feet at Regent’s Place.

UBS analysts said leasing activity needs to accelerate in the second half to reach its revenue ambition of £520–530 million for FY26, but noted that tight cost control and surrender premiums leave earnings well supported.

’The bottom line earnings number looks well placed to achieve or exceed the original guidance," they wrote. 

British Land reaffirmed its outlook for ERV growth of 3% to 5% annually and said it expects full-year EPS of at least 28.5p, unchanged year-on-year, with growth of "at least 6%" projected for fiscal 2027.

UBS analysts said the sharper EPS guidance and additional disclosure were unusual for a trading update and reflect management’s effort to maintain investor engagement.

"In a concerted effort to drive ongoing engagement with analysts and investors, releasing the additional level of detail in the trading update will allow management to discuss the high level performance numbers during the close period. At the same time it frees up the results to focus more on strategy and detail," analysts said.