Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — H1 2011 Earnings Presentation
37 slides from Shaftesbury Capital's earnings presentation, Aug 3, 2011
Slide 1: Interim Results 3 August 2011
Slide 2: Important Notices
Important Notices This presentation includes statements that are forwardlooking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Capital & Counties Properties PLC to be materially
Slide 3: Agenda
Agenda * Introduction Ian Hawksworth * Financial Review Soumen Das * Business Review Ian Hawksworth and Gary Yardley * Q&A Page no.3 Capital & Counties Properties PLC 3 August 2011 Interim Results capcoe
Slide 4: EC&O £385m, Empress State £103m
EC&O £385m Empress State £103m
Slide 5: Highlights
Highlights Successful and Active First Half * NAV +4.0% H1 to 154 pence per share * Valuation uplift excluding EC&O in H1 +5.4% tieopiay « ERV+6.5% LfL * Seagrave Road +11% * £175m liquidity raised + £100m from share placing + £75m from GCP and China disposals (GCP sales circa 10% above Dec 10 value
Slide 6: Financial Review
Financial Review Soumen Das Page no.6 Capital & Counties Properties PLC 3 August 2011 Interim Results
Slide 7: Underlying Earnings
Underlying Earnings Highlights Var £m Net rental income 36.7 38.3 (1.6) Admin costs (11.0) (7.7) (3.3) Net finance costs (17.7) (20.1) 2.4 Tax on underlying earnings (1.8) (0.4) (1.4) Underlying earnings 6.2 10.1 (3.9) Underlying earnings per share 1.0p 1.6p (0.6)p Proposed dividend per share 0.5p 0
Slide 8: Net Rental Income
Net Rental Income LEL (1.9%) 45 40 £0.3m ————————— 35 £0.6m £0.4m £0.9m 30 em 25 ECO: £13.8m 20 15 10 5 ° H1 2010 Covent Garden ECRO cep Non like-for-like H1 2011 * — Passing rent of properties disposed £3.0m * Passing rent of properties acquired £3.5m Page no.8 Capital & Counties Properties PLC 3 A
Slide 9: Balance Sheet
Balance Sheet Portfolio value 1,502 1,378 124 Investments 30 66 (36) Net debt [452] [476] 24 Other assets and liabilities (54) (85) 31 NAV 1,026 883 143 EPRA adjusted diluted NAV 1,064 926 138 EPRA adjusted diluted NAV per share 154p 148p 6p Number of shares in issue 683.9m 621.8m 62.1m * — EPRA NNN
Slide 10: EPRA Adjusted Diluted Net Assets Per Share
EPRA Adjusted Diluted Net Assets Per Share NAV Up 4.0% to 154p 160 158 156 154 152 150 148 146 144 142 140 Valuation surplus Underlying profits China revaluation Dividend Exceptional items Other Jun-11 Interim Results Page no.10 Capital & Counties Properties PLC Cc a p Cc © 3 August 2011
Slide 11: Debt Management
Debt Management * Sound capital structure and conservative loan-to-value ¢ Group LTV 30% at June 2011 * Group interest cover 145% at June 2011 Target LTV no higher than 45% Cash balance of £191m at June 2011 provides substantial flexibility Weighted average cost of debt 5.9% Weighted debt maturity n
Slide 12: Cash Utilisation
Cash Utilisation £96.5m 350 oe a 250 £84.2m £21.2m £24.8m a on 200 r —= __ £23.41 . £n im £6.2m 5.2m 150 100 | PSE En 50 ° Dec-10 Operational _Disposals Capital Acquisitions Capex Interest Net borrowings _ Dividend Other Jun-11 cash flow raise repaid * £39m to be received from GCP * £15m to be recei
Slide 13: Capital Allocation
Capital Allocation Allocated IM Acquisitions Remaining £m £m £m Covent Garden 175 83 18 33 Al Earls Court 40 10 23 : 7 Olympia 22 : 6 16 : Other 4 - 3 ] - Total 241 93 50 50 48 ‘Including £16m for acquisitions not completed at 30 June Flower Cellars redevelopment One West Piazza residential conversi
Slide 14: Operating Review
Operating Review Ian Hawksworth and Gary Yardley Page no. 14 Capital & Counties Properties PLC 3 August 2011 Interim Results
Slide 15: Valuation
Valuation Strong Hi 2011 Valuation Uplift Market value fi Market value Jun-11 Dec-10 £m £m Investment properties Covent Garden 780 640 6.0% 6.3% GcP 240 ' 260 ' 6.1% 9.8% Empress State 103 ' 103 | - - Total non exhibition properties 1,123 1,003 5.4% 6.5% EC&O 385 378 (3.1)% Total Investment Properti
Slide 16: Capco's Covent Garden Estate Holdings
Capco’s Covent Garden Estate Holdings Acquisitions since Dec 10 Assets held at Dec 10
Slide 17: 27-28 King Street
Covent Garden King’s Court, King Street * Acquisition completed 23 June for £68m consideration pre-costs * A portfolio of 5 properties on King Street with 71,900 sq ft of office, retail and residential space around a central courtyard * Initial yield 3.4% - equivalent yield 4.7% * Presents immediate
Slide 18: Covent Garden Rental Zone Map and Key Leasing Activity
• • • Bedford Chambers Covent Garden Covent Garden Rental Zone Map Key leasing activity across the estate
Slide 19: Covent Garden
Covent Garden Gross Income to ERV 50 45 40 £2.1 £1.5m 1m | Dec-10 Gross Additional Acquisitions Jun-11 Gross Turnover rent Rent-frees Under contract Income Vacancies Development Under-rented Jurr11 ERV income _rental income income / offer contracted & under offer Page no.19 Capital & Counties Proper
Slide 20: Attracting New Brands Across the Estate
Covent Garden Attracting New Brands Across the Estate * Vilebrequin (King St, 800 sq fi) * 250% above previous passing rent * 49% increase on Dec 10 ERV * ITZA £359psf * Rabeanco (Long Acre, 1,603 sq ft) * 8% above previous passing rent * 12% increase on Dec 10 ERV * ITZA£473 psf * G-Shock West (Mar
Slide 21: CGI Henrietta Street, showing extension
CGI 34 Henrietta Street, showing extension
Slide 22: GCP Regent Street and Piccadilly core
GCP Regent Street and Piccadilly core
Slide 23: Chongqing, Caiyun Lake and Fifth Square, Beijing
Chongqing, Caiyun Lake Fifth Square, Beijing
Slide 24: Earls Court & Olympia Strategy
Earls Court & Olympia Strategy * Secure planning consent for a residentiaHed, mixed-use development for the Earls Court & West Kensington Opportunity Area (ECOA) and Seagrave Road * Consider options to release and maximise value from Seagrave Road, including participation in future residential schem
Slide 25: Olympia West Hall, July 2011
Olympia West Hall, July 2011
Slide 26: Earls Court, Seagrave Road, Roxby Place
• • Earls Court, Seagrave Road, TfL Roxby Place Empress State LBHF Building
Slide 27: Earls Court & West Kensington Opportunity Area
Earls Court & West Kensington Opportunity Area Milestones * — ECOA planning application * — Farrells’ ECOA submitted 22 June Masterplan launched * — LBHF leader states that a * 1st stage SPD consultation comprehensive approach is the “best way forward” launched * —_ 1#Stage SPD consultation * Exclus
Slide 28: Seagrave Road: Potential Major Residential Scheme
Seagrave Road Potential Major Residential Scheme * June 2011 value £115m +11% from Dec 2010 « Current value per acre £16m « Land value per square foot NIA £120 * A strategic site within LBHF draft core strategy and London Plan Opportunity Area * Planning application submitted June 2011 + Approx 950,
Slide 29: Outlook
Outlook Positive Momentum Across the Business * Central London real estate market likely to remain positive and active * Continue recycling of capital * Covent Garden ¢ Further ERV growth and letting activity anticipated * Olympia upgrade works fo continue * Earls Court « Target planning consent « F
Slide 30: Q&A
Slide 31: Appendices
Appendices Financial Covenants Covent Garden GCP Taxation + + + H+ Portfolio Analysis Page no.31 Capital & Counties Properties PLC C a p Cc © 3 August 2011 Interim Results
Slide 32: Financial Covenants
Financial Covenants Maturity 2013 2013 2013 2013 2017 Facility Debt! £m LTV Earls Court & Olympia 107 n/a Covent Garden 222 75% Empress State 75 75% GcP 113 70% Covent Garden 112 70% "As at31 July 2011 2 11V 70% and ICR 130% from 31 Oct 2011 Interest Cover 150% 120% 115% 120% 120% LTV Actual Interes
Slide 33: Covent Garden Zoning Plan
Covent Garden Zoning Plan oy LIY q * Prime Piazza Properties « Brand anchors * Long Acre/James Street/ROH ¢ Stylish mid market * Floral Street + Boutique * King Street/Henrietta Street + Contemporary luxury * Southampton Street + Outdoor * Market Building « Independents, specialists and casual dinin
Slide 34: Covent Garden Portfolio Statistics
Covent Garden Portfolio Statistics Lease expiry profile (WALE 8.8 yrs) Annual gross income (£31.4m) 2012 2% 2013 7% Leisure £1.4m Resi £0.5m Portfolio by value (£780m) By floor area (828k sq ft) © Page no. 34. Capital & Counties Properties PLC 3 August 2011 Interim Results
Slide 35: The Great Capital Partnership
The Great Capital Partnership Portfolio Statistics ERV at 30 Jun 2011 (£28.6m) Tenants by business Lease expiry profile (WALE 7.7 yrs) Page no.35 Capital & Counties Properties PLC 3 August 2011 Interim Results
Slide 36: Taxation
Taxation Summary * Tax on income * 22.5% underlying tax rate in 2011 (corporation tax rate 26% to reduce to 23% by 2014) + Lower rate due to capital allowances and tax relief on additional pension contributions during the period « Expected long-term underlying tax rate of 23% on underlying earnings
Slide 37: Portfolio Analysis
Portfolio Analysis Covent Garden Earls Court & Olym £385m Exhibition Great Capital P Market value £780m £103m Empress Sot Building £240m 2 1,228,000 Exhibition Size (sq ft) 828,000 469,000 Empress State Building 715,000 . 0, 100% Exhibition oy Ownership 100% 50% tmpress Sct 50% Properties 52 3 28 .
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