Half Year 2025 Helical PLC Earnings Call Transcript
Key Points
- Helical PLC (LSE:HLCL) has a strong development pipeline with 460,000 square feet of office space under construction, expected to be delivered in 2026.
- The company has successfully recycled GBP245 million of equity, resulting in a see-through loan to value of 15.9%, providing sufficient equity to fund its development pipeline.
- Helical PLC (LSE:HLCL) has a strategic joint venture with TfL's property company, Places for London, which is progressing well and offers first options on commercial sites.
- The company has a proven track record with over 46 joint venture partners, delivering over 10 million square feet of space, and plans to continue leveraging partnerships for future projects.
- Helical PLC (LSE:HLCL) has a strong balance sheet with a pro forma LTV of 15.9% and sufficient cash to fund its equity contribution to its development pipeline.
- Net rents are down compared to last year due to the loss of key tenants and recent sales, with expectations of continued reduction in the second half.
- The time taken to obtain planning permission remains a significant obstacle, affecting the viability of new build schemes.
- The company faces challenges in the current office market dynamics, with a constrained supply of new office space due to high build costs and the availability and cost of debt finance.
- Helical PLC (LSE:HLCL) has reduced its dividend to the minimum payable under REIT rules, reflecting the company's cautious approach to cash flow management.
- The company is experiencing pricing pressure in certain submarkets, such as Whitechapel, due to high vacancy rates in neighboring areas.
Good morning, everyone, and welcome to Helical's half year results presentation to the September 30, 2024, my first as CEO. Thank you for coming and thank you also to those joining online. We very much appreciate it. I would like to start this morning by providing an overview of what we see as a really interesting market opportunity and how Helical is well placed to take advantage of this opportunity, as well as give some commentary on what we are seeing in the central London office market. Tim will run through the details of the financial results and James will cover the sales and progress made on the investment portfolio.
I will then talk through our exciting development pipeline before providing a concluding summary and taking any questions at the end. Following the outward yield movement experienced since March 2022, we now seem to be at an end with the first two cuts in the Bank of England base rates enacted and further reductions expected, albeit seemingly more slowly since the
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