Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties PLC (Capco) — H1 2022 Earnings Presentation
34 slides from Shaftesbury Capital's earnings presentation, 2022
Slide 1: Slide 1
Slide 2: Agenda
« aad cad ad pa Introduction lan Hawksworth Financial review Situl Jobanputra Covent Garden Michelle McGrath Looking ahead lan Hawksworth Q&A 2 Interim Results 2022
Slide 3: Introduction
Introduction lan Hawksworth
Slide 4: Portfolio valuation
Portfolio valuation £2.4bn1
Slide 5: Update on merger with Shaftesbury PLC
Update on merger with Shaftesbury PLC Recommended all-share merger Completion of merger expected by the end of 2022
Slide 6: Strong momentum at Covent Garden
Strong momentum at Covent Garden Sustained recovery since summer 2021 - Footfall continues to trend towards prepandemic levels - Customer sales in aggregate ahead of 2019 - High occupancy levels 5% growth in Covent Garden valuation in H1 22 - Driven by rental growth Strong leasing activity; 9% ahead
Slide 7: Group headlines
Group headlines Property Total property asta EPRA NTA Net debt to valuation return share Seip per share gross assets +4.5% itl +5.9% 0.5p 208.9p 25% Covent Garden valuation uplift Investment in Shaftesbury H1 2022 45% £3.9m dividend income in H] 2022 15% share price decline since Dec 21 Underlying e
Slide 8: Financial review
Financial review
Slide 9: Growing underlying earnings
Growing underlying earnings Continuing operations Jun re yr Net rental income! 28.0 25.2 2.8 Other income? 3.9 0.2 3.7 Administration costs? (12.8) (9.1) (3.7) Net finance costs (14.3) (16.2) 1.9 Profit before tax 48 0.1 47 Taxation (0.5) (0.1) (0.4) Underlying earnings 43 - 43 Underlying earnings p
Slide 10: Gross income to ERV bridge
100 80 60 40 20 0 Jun-22 Gross Rent-frees and Turnover and other Contracted and Total contracted Vacancy Development and Net over rented Jun-22 Income stepped rents income under offer and under offer refurbishment ERV 1. 2019 ERV adjusted for disposal of Wellington block, Southampton Street, Bedford
Slide 11: Net asset value and EPRA NTA movement
Note: All numbers shown at Group share. A reconciliation of the Group Share to IFRS balance sheet is set out on page 29
Slide 12: Cash movement
600 400 200 0 Dec-21 Operating cash inflow Refurbishment and Non-underlying finance Financing Jun-22 disposals of property costs CASH UNDRAWN FACILITIES Non-underlying finance costs includes £5m make-whole costs on early repayment of USPP loan notes Note: All numbers shown at Group share
Slide 13: Covent Garden net debt
Covent Garden net debt £359m Covent Garden LTV 20% Covent Garden ICR 3.5x Group net debt £605m Net debt to gross assets 25% Strong balance sheet with access to substantial liquidity and modest capital commitments Significant headroom against debt covenants Early repayment of £75m nominal USPP loan n
Slide 14: Covent Garden
~ Covent Garden Michelle McGrath
Slide 15: Covent Garden valuation and leasing
ae Property value ERV NRI Leasing vs Dec 21 ERV ma +5% fl +4% If +14% if +9% £1,817m Strong leasing activity across all uses Targeted investment activity on estate - 25 leasing transactions (£3.9m contracted income) - Active asset management opportunities - High occupancy levels, EPRA vacancy 2% - A
Slide 16: Rental values across Covent Garden
1,200 Dec-21 Jun-22 1,000 800 600 400 200 0 Central Covent James St King St Market Bldg Royal Opera Henrietta St - Long Acre Floral St - Henrietta St - Floral St - Bedford St London Garden House East East West West Prime* Average**
Slide 17: Strong leasing momentum
Strong leasing momentum OLo Reformation @revoton vVuorl CCaperimental N.PEAL C&C Cocktail Club G Qu PARFUMS de MARLY TUeOR (GUERLAIN PARIS WatchHouse. (ZIPIZE — Yirudies Kien 9 EMPRESA PARIS Chestnut Pattory 17 Interim Results 2022 capco
Slide 18: Active consumer engagement
Social media growth in followers (’000) 600 +30% 500 Active consumer engagement 400 − 300 200 Early adopters of digital marketing +13% 100 − 0 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 − Covent Garden Central London retail destinations Social media growth and followers across Instagram and Facebook
Slide 19: Targeted capital initiatives accelerating value creation
Targeted capital initiatives accelerating value creation 5-6 Henrietta Street 35 King Street 15-17 Long Acre 36-39 Maiden Lane 39-40 Bedford Street 26 King Street Offices Offices Offices F&B F&B F&B/mixed-use Targeted capital initiatives Expected EPC ratings − Previous EPC Expected EPC 5 A − B4 − C3
Slide 20: Looking ahead
g ahead lan Hawksworth
Slide 21: Looking ahead
Looking ahead Strong leasing demand across all uses, delivering income and rental value growth Long-term resilience of the West End, near term macroeconomic headwinds Responsible stewardship, delivering positive environmental and social outcomes for stakeholders Maintain cost discipline with strong
Slide 22: Appendix
Slide 23: Sustainability ratings and awards
1. Green Star awarded 2. FTSE4Good – Capco remains a constituent of the index, 2021 score not yet available, 2020 score remains applicable
Slide 24: Energy Performance Certificates (EPC)
Energy Performance Certificates (EPC) Strategy to re-use, re-purpose and improve Enhance energy performance credentials Number of Units Incremental refurbishment activities Significant embedded carbon 319' Re-use building fabric where possible Improving EPC ratings across the estate - Currently twot
Slide 25: Use by value
Use by value: Leisure/ Retail Office __ Residential Other Total Valuation £892m £291m £126m £51m £1,817m Gross income £28.0m i £9.1m £3.3m £2.0m £58.6m ERV £38.0m i £16.3m £3.9m £2.2m £79.2m Area (square foot) 0.4m hi 0.2m 0.2m! 0.1m 1.1m Units 120 68 TAl ier 54 510 1. Residential includes units sol
Slide 26: Covent Garden portfolio properties, units
Covent Garden portfolio 70 properties, 510 units Lease expiry profile’ Gross income 02022: 14% S w Retail: 48% WALE 2023: 13% P&B: 27% 7.3yrs 5 2024: 7% £58.6m = Offices: 16% L | = 2025: 7% m Residential: 6% 4 2026+: 59% a leisure: 3% 1. Lease expiry pictle based on the earlier of lease break and le
Slide 27: Covent Garden valuation movement
£m 2,500 2,000 1,500 1,000 500 0 Dec-21 valuation ERV growth Yield Movement Jun-22 valuation 1. 2019 valuation adjusted for disposal of Wellington block, Southampton Street, Bedford Street and King Street properties (£200m)
Slide 28: Covent Garden portfolio Zone A map
Covent Garden portfolio £1,200+ 30 June 2022 Zone A Map Ais." i \\ £0-£300
Slide 29: Summary balance sheet
Summary balance sheet Group share to IFRS as at 30 June 2022 less: Group share Joint ventures! IFRS Sm Sm Sm Invesiment, development & trading property 1,861 (82) 1,779 Net debt (605) (5) (610) Equity investment? 506 506 Other assets and liabilities 13 79 92 NAV 1,775 (8) 1,767 1. Primarily Lilie Sq
Slide 30: NAV movement
225 220 215 210 205 200 195 190 Dec-21 Covent Garden Shaftesbury fair Underlying Non-underlying Dividend Other Jun-22 gain on value movement earnings costs revaluation
Slide 31: Debt maturity profile
500 450 400 350 300 250 200 150 100 50 0 2022 2023 2024 2025 2026 2027 2028 2029 2030-2037 USPP Series 1 USPP Series 2 USPP Series 3 Exchangeable Bond
Slide 32: Taxation summary
Taxation summary Tax on income and gains The total tax charge for the period, made up of both underlying tax and non-underlying tax, is £5.5 million. The Group is a UK Real Estate Investment Trust (REIT) and therefore is exempt from UK corporation tax on income and gains arising from its qualifying
Slide 33: Lillie Square joint venture
Lillie Square joint venture Continuing to progress sales - 2 units completed during H1 22 representing £2.6 million (£1.3 million Capco share) - 69 units remain available across Phase 1 and Phase 2 Valuation - 1.8% decline (likeforlike) to £84 million! (Capco share) Funding - £35m cash distribution
Slide 34: Important notices
Important notices This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any shares or other securities in Capital & Counties Properties PLC ("Capco’). This presentation contains or may contain certain forwardlooking statements, made with
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