By building up a formidable portfolio of shopping complexes, CSC has been able to cash in on the strong consumer spending and sharply rising rents. Pre-tax profits were up a third to pounds 77.4m, and net assets per share leapt 27 per cent to 391.5p, well ahead of market expectations of 380p.
The City is also impressed by the 10 per cent turnover of tenants, which suggests that CSC has been able to bring in plenty of new retailers willing to pay higher rents. And its empty units represent just a half a per cent of total space.
There is a fear that CSC relies too heavily on a few centres which could be vulnerable if consumer spending begins to fall. The Lakeside, Thurrock and the MetroCentre, Gateshead account for almost 70 per cent of its property portfolio. But when Braehead, the pounds 285m development on the site of former Clydeside shipyards, opens in the spring 1999, the dominance of the two main sites will be reduced.
Government planning restrictions could limit further acquisition opportunities. However, that serves to make CSC's existing sites all the more valuable and the group also has scope to increase the size of many of its centres in the medium term.
The strong results prompted analysts to raise profit forecasts for 1998 by pounds 3.5m to pounds 83.5m and pushed the shares up 4.5p to 444p. With net asset value per share forecast at 445p this year and 520p next, CSC still looks good value.