GB : Town Centre Securities - Bouncing back

TCS’ H1 shows its ‘bounce-back’ year is well underway. EPRA NTA increased 7% in the six months to 31 Dec to 305p, some 6% ahead of our forecast with LFL values +2.4%. EPRA EPS increased from 0p to 5.0p (vs Lib 1.7p) as Car Park and Hotel utilisation improved faster than we had anticipated, plus benefits of a 1.4p one-off. LTV nudged down from 51% to 50%, and falls below 50% pro forma for H2 disposals. We increase FY22E EPS 15% to 7.8p and EPRA NTAps by c.5% to 310p for one-offs, better underlying earnings and revaluation gains. Risks lie in an economic slowdown if inflation persists. The shares trade at a 54% discount to the December NTA pricing a greater than 25% decline in property values, which looks too steep. TP 210p from 200p driven by our NTA changes. BUY.