Description of British Land Company Plc - Essay Example

Based on a Reuters report, BLC posted negative performance for the year ended as it has a negative operating margin of -65.16 B and a negative net profit margin of -700.54bn.  The percentage of management effectiveness is nestled on high negative ratios. It has low cash availability and zero cash flow which shows the company relies heavily on debt borrowings. It has a total debt-equity ratio of 117.76% which is a risky investment because of the high cost of money. The company has had no dividend yield and zero growth rates for the past two years

There is no available property map that depicts the location of properties of BLC. Based on Yahoo Finance, BLC  is the biggest real estate management company in London.  One of their properties is over 12 hectares of property in Broadgate Complex which houses offices, stores, hotel rooms, and a large shopping mall.  It has also numerous sites acquired thru joint ventures like The Meadowhall BLC and The Pillar Property which is made up of shopping centers. (Yahoo Finance)

Investment Thesis.  In the face of challenges of REIT companies due to a slowing economy and global financial crisis, is Brit Land Co. affected in terms of growth ratios, performance, and return on investment.                                                                                                                                       
Buy/Hold Recommendation.  I will recommend holding buying the shares of stock in Brit Land Co., until such time that they have corrected the profitability of the company.  The company has been affected by the economic crisis which started in the mortgage and realty industry.  The slowdown in the property market has affected the financial performance of the company resulting in the loss of confidence of stockholders.

Annexes

Financial Ratios Brit Land Co. Plc. 

Market Capitalisation

Market Cap (£ Millions)

3,315.03

Shares Outstanding

852.19

Float

851.20

Per Share Data (£   GBP)

Earnin'

-6.17

Sales

0.88

Book Value

3.77

Cash Flow

--

Cash

0.74

Valuation Ratios

Price/Earnings

--

Price/Sales

5.98

Price/Book

1.03

Price/Cash Flow

--

Management Effectiveness (%)

Return on Equity

-77.63

Return on Assets

-38.38

Return on Investment

-40.67

Profitability Ratios (%)

Gross Margin

--

Operating Margin

-65.16

Net Profit Margin

-700.54

Dividend Information

Dividend Yield (%)

--

Dividend Per Share (£   GBP)

0.30

Payout Ratio

--

Financial Strength

Quick Ratio

1.29

Current Ratio

1.29

LT Debt/Equity

116.24

Total Debt/Equity

117.76

Source: Reuters Financial ratios