Shaftesbury Capital PLC on Thursday said it swung to a profit following a chunky discount after it formed as a company out of formerly two companies.

The real estate investment trust said it swung to a pretax profit of £750.6 million in 2023 from a loss of £205.8 million in 2022.

Revenue jumped to £195.1 million from £74.1 million.

Importantly, Shaftesbury Capital reported a £805.5 million gain on a bargain purchase for 2023, compared to none in 2022. This was due to the company’s establishment in March 2023 as a result of the merger of Capital & Counties Properties PLC and Shaftesbury PLC, resulting in the bargain.

It noted that the Shaftesbury Capital share price was trading at a 32% discount to EPRA NTA when the merger completed, resulting in the deemed value of the consideration being at a discount to the fair value of Shaftesbury Capital’s net assets on completion.

Meanwhile, total equity at December 31 jumped to £3.48 billion from £1.56 billion at the end of 2022.

The company proposed a final dividend of 1.65p, bringing the total to 3.15p, up 26% from 2.5p in 2022.

Looking ahead, the firm is targeting medium-term rental growth of 5% to 7% per year. It said: ‘Despite the uncertain geopolitical and macroeconomic backdrop, our strong performance and leasing pipeline together with positive trading conditions across our West End locations provide us with confidence in the growth prospects for our exceptional portfolio’

Shaftesbury Capital shares rose 1.3% to 123.30 pence each on Thursday morning in London, while in Johannesburg, they were 6.3% lower at R 30.00 each in the afternoon.

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