Derwent London (LSE:DLN) Interest Coverage : 4.30 (As of Dec. 2023)

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What is Derwent London Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Derwent London's Operating Income for the six months ended in Dec. 2023 was £78.3 Mil. Derwent London's Interest Expense for the six months ended in Dec. 2023 was £-18.2 Mil. Derwent London's interest coverage for the quarter that ended in Dec. 2023 was 4.30. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Derwent London's Interest Coverage or its related term are showing as below:

LSE:DLN' s Interest Coverage Range Over the Past 10 Years
Min: 2.77 Med: 4.67 Max: 7.5
Current: 4.2

LSE:DLN's Interest Coverage is ranked better than
63.69% of 672 companies
in the REITs industry
Industry Median: 2.98 vs LSE:DLN: 4.20

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Derwent London Interest Coverage Historical Data

The historical data trend for Derwent London's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Derwent London Interest Coverage Chart

Derwent London Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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4.68

5.71

6.25

4.36

4.20

Derwent London Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial															6.26	4.59	4.16	4.09	4.30

Competitive Comparison of Derwent London's Interest Coverage

For the REIT - Office subindustry, Derwent London's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Derwent London's Interest Coverage Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Derwent London's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Derwent London's Interest Coverage falls into.

Derwent London Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Derwent London's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Derwent London's Interest Expense was £-36.8 Mil. Its Operating Income was £154.4 Mil. And its Long-Term Debt & Capital Lease Obligation was £1,267.4 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	154.4	/	-36.8
	=	4.20

Derwent London's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, Derwent London's Interest Expense was £-18.2 Mil. Its Operating Income was £78.3 Mil. And its Long-Term Debt & Capital Lease Obligation was £1,267.4 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	78.3	/	-18.2
	=	4.30

The higher the ratio, the stronger the company's Financial Strength is.

Derwent London (LSE:DLN) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Derwent London Interest Coverage Related Terms

Thank you for viewing the detailed overview of Derwent London's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Derwent London (LSE:DLN) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Derwent London PLC (LSE:DLN) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

DWVYF:USA DLNl:UK DVK:Germany

Address

25 Savile Row, London, GBR, W1S 2ER

Website

https://www.derwentlondon.com

Derwent London PLC is a London-focused real estate investment trust. Derwent owns, manages, and refurbishes office real estate in Central London. Within this region, the majority of the company's assets are located in the districts of London's West End, such as Fitzrovia. Properties in London's Tech Belt and the City Borders also represent significant parts of the company's real estate portfolio. Derwent derives nearly all of its revenue from tenants in the form of rental income structured in mid-to-long-term leases. Office buildings in the central West End are responsible for the majority of revenue generated. Media and advertising companies, professional and business services firms, and retail head offices are all fairly evenly represented among the company's tenants.