Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — H1 2021 Earnings Presentation
38 slides from Shaftesbury Capital's earnings presentation, 2021
Slide 1: Capital & Counties Properties PLC
Capital & Counties Properties PLC CAPITAL & COUNTIES PROPERTIES PLC
Slide 2: Important Notices
IMPORTANT NOTICES This presentation contains “forward-looking statements” regarding the belief or current expectations of Capital & Counties Properties PLC, its Directors and other members of its senior management about Capital & Counties Properties PLC’s businesses, financial performance and result
Slide 3: Introduction, Financial Review, Covent Garden, Looking Ahead, Q&A
1. INTRODUCTION Ian Hawksworth 2. FINANCIAL REVIEW Situl Jobanputra 3. COVENT GARDEN Michelle McGrath 4. LOOKING AHEAD Ian Hawksworth 5. Q&A
Slide 4: Introduction
praia
Slide 5: Covent Garden
COVENT GARDEN £1,688m 72% PORTFOLIO VALUATION OTHER INVESTMENTS £2.3bn¹ £660m Shaftesbury investment £552m 23% Lillie Square £108m 5% ¹ Includes Capco’s property interests and its investment in Shaftesbury shares The map above is indicative.
Slide 6: Proactive management and positive operational indicators
PROACTIVE MANAGEMENT − Creative and innovative approach − World-class customer line up maintained − High occupancy POSITIVE OPERATIONAL INDICATORS − Growing footfall and positive customer sales trajectory REDUCED RENTAL VALUE DECLINE, EQUIVALENT YIELD STABLE LEASING MOMENTUM − 29 leasing transaction
Slide 7: Clear strategy with strong operational focus
CLEAR STRATEGY WITH STRONG OPERATIONAL FOCUS CONTINUED FOCUS ON CAPITAL ALLOCATION AND COST MANAGEMENT STRONG BALANCE SHEET, ACCESS TO SUBSTANTIAL LIQUIDITY RECOMMENCEMENT OF DIVIDEND DISTRIBUTION
Slide 8: Covent Garden portfolio valuation movement
£m Equivalent yield 3.94% (Dec 20: 3.95%1) Initial yield 2.98% (Dec 20: 3.13%1) - £50m - £87m 1500 Valuation ERV lfl lfl Retail -6% -6% F&B - -2% 1000 £1,688m £1,825m Offices -9% -3% £1,688m Residential - -5% 500 Leisure 1% - Total June 2021 -5% -4% Total movement since -31% -26% Dec 2019 0 Dec-20 D
Slide 9: Net zero carbon commitment and sustainability oversight
OVERSIGHT FROM BOARD COMMITTEE FOCUSED ON ENVIRONMENT, SUSTAINABILITY AND COMMUNITY COMMITMENT TO ACHIEVE NET ZERO CARBON BY 2030 − Detailed pathway to be published later this year REDUCING ENVIRONMENTAL IMPACT − Customer engagement programme EMPLOYEE SURVEY CONDUCTED − Our people continue to be hig
Slide 10: Financial Review
Slide 11: Dividend and earnings per share
- - - 1. Property Income Distribution (“PID”) of 0.25 pence and ordinary dividend of 0.25 pence. Note: All numbers shown at Group share
Slide 12: Turnover and other income
£m 90 80 £4.7m £2.4m £3.1m £1.9m 70 £5.5m £0.2m 60 50 40 £75.8m £75.8m £70.6m £70.6m £73.0m £67.3m £67.5m 30 £61.8m 20 10 0 Jun-21 Gross Rent frees & Turnover & Contracted & Total Vacancy Development & Net Over Jun-21 ERV Income stepped rents other income under offer contracted & refurbishment Rente
Slide 13: Net asset value and property market value
1 The market value of investment, development & trading property is £1,796m (31 December 2020: £1,942m) Note: All numbers shown at Group share. A reconciliation to the summary IFRS balance sheet can be found in the Appendix
Slide 14: Group cash movement
500 450 £57m 400 350 300 £149m £4m £6m 250 200 £376m £376m 150 £274m 100 50 0 Dec-20 Disposals Financing Investment Operating cash flow & Jun-21 Other CASH Note: All numbers shown at Group share
Slide 15: Strong, diversified capital structure and liquidity
STRONG, DIVERSIFIED CAPITAL STRUCTURE ACCESS TO SUBSTANTIAL LIQUIDITY THROUGH CASH AND UNDRAWN RCF AVERAGE COST OF DEBT 2.8% AND MATURITY OF 5.4 YEARS ON DRAWN DEBT RCF REFINANCING IN ADVANCE OF DEC-22 MATURITY
Slide 16: Covent Garden
i . COVENT-GARDEN
Slide 17: Good leasing traction and pipeline
GOOD LEASING TRACTION AND PIPELINE 29 LEASING TRANSACTIONS COMPLETED − £6.0m contracted income, -6% vs Dec 20 ERV − Further £3.1m income under offer HIGH OCCUPANCY TARGETED BRANDS SECURED DISPOSAL OF TWO RESIDENTIAL-LED BLOCKS FOR £50M − Opportunity to recycle capital POSITIVE REOPENING WITH GROWING
Slide 18: ERV like-for-like and retail ITZA rents
ITZA psf (£) 1,200 ERV lfl 1,000 Retail -6% F&B -2% Offices -3% 800 Residential -5% Leisure 0% 600 Total -4% 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* Ave
Slide 19: Direct engagement with customers and successful reopening
DIRECT ENGAGEMENT WITH SUCCESSFUL REOPENING CREATIVELY MANAGED ESTATE OUR CUSTOMERS − Retail and F&B fully reopened − Vibrant and animated − Support extended through H1 - Minimal tenant failures − Growing footfall and sales − Expected to reduce through H2 as restrictions ease LEADING AL FRESCO DININ
Slide 20: Innovative Covent Garden brand and leasing signings
KING STREET MARKET BUILDING INNOVATIVE COVENT GARDEN BRAND − Driving acceleration in brand enquiries SIGNINGS FROM TARGETED CATEGORIES AND BRANDS − Digitally native HENRIETTA STREET ROYAL OPERA HOUSE − Sustainable ARCADE − Contemporary fashion and beauty − Lifestyle and sports − Jewellery − Differen
Slide 21: Investing in the Covent Garden brand and experience
“Covent Garden, obviously, which is one of the most beautiful areas in London and is filled with some of the best places to recharge and catch up with friends and family.” GQ Online Covent Garden Summer Festival “Covent Garden was the central London destination people were looking forward to revisit
Slide 22: Opportunities to enhance value through refurbishment
OPPORTUNITIES TO ENHANCE VALUE THROUGH REFURBISHMENT ACTIVITY − Modest capital commitments £3.9m − 5-6 Henrietta Street & 35 King Street office refurbishments underway DISPOSAL OF TWO RESIDENTIAL-LED PROPERTIES FOR £50.2M 35 King Street − 26-27 and 30-32 Southampton Street (28,000 sq ft) TRACKING IN
Slide 23: (an x LL as < © Z < © ©
(an x LL as < © Z < © ©
Slide 24: Looking ahead: outlook and priorities
ELEVATED LEVEL OF ENQUIRIES, STRONG TRANSACTIONAL ACTIVITY AND IMPROVING SENTIMENT NEAR TERM CHALLENGES REMAIN HOWEVER WORST OF PANDEMIC MAY BE BEHIND US DELIVER ECONOMIC, ENVIRONMENTAL AND SOCIAL VALUE FOR OUR STAKEHOLDERS MAINTAIN STRONG BALANCE SHEET THROUGH DISCIPLINED CAPITAL ALLOCATION CONFIDE
Slide 25: Q&A
Slide 26: Memberships and sustainability ratings
EPRA SUSTAINABILITY GLOBAL REAL ESTATE REPORTING AWARDS BALANCE SUSTAINABILITY BENCHMARK 2020: Gold 2020: 59/100 CARBON DISCLOSURE PROJECT FTSE4GOOD 2020: C 2019: 90th percentile MEMBERSHIPS
Slide 27: Customer support and estate measures
- Open air environment - Supporting restaurant capacity with - Investing in safer, cleaner and - Optimised stores in line with al fresco dining greener environment government guidelines - Bespoke solutions reflecting the - Additional security presence across - Extensive cleaning regime position of e
Slide 28: Covent Garden portfolio composition
1. Residential includes units sold on long lease interests covering approximately 154,000 square feet
Slide 29: Lease expiry profile, gross income and portfolio value
LEASE EXPIRY PROFILE1 ANNUAL GROSS INCOME 2021: 11% Retail: 46% F&B: 24% 2022: 12% WALE Office: 20% 8.4yrs 2023: 12% £61.8m Leisure: 5% 2024: 8% Residential: 5% 2025+: 57% 1. Lease expiry profile based on the earlier of lease break and lease expiry PORTFOLIO VALUE TOTAL FLOOR AREA Retail 50% F&B 22%
Slide 30: Covent Garden portfolio analysis: Zone A map
30 Interim Results 2021 COVENT GARDEN PORTFOLIO ANALYSIS a cs01-21,200 mM c501-c800 mf" 2301-2500 | £0-£300 capce
Slide 31: Net rental income: underlying to reported
Includes £1.0m bad £4.2 million non-underlying items £m debt expense 30 25 £1.6m 20 £2.6m 15 £25.2m £23.6m 10 £21.0m 5 0 Underlying NRI June 2021 Impairment of tenant incentives IFRS 16 lease modifications Reported NRI June 2021 £4.2 million represents write-off of non-cash balance sheet items.
Slide 32: Rent collection
1. Rent collection for June 2021 quarter was 65% (adjusted for customers on monthly payment plans) Collections are presented for quarterly rents.
Slide 33: Summary balance sheet: Group share to IFRS
SUMMARY BALANCE SHEET GROUP SHARE TO IFRS AS AT 30 JUNE 2021 less: Group share Joint ventures! IFRS Sm £m Sm Investment, development & trading Property 1,762 (106) 1,656 Equity investment 552 552 Net Debt (668) (11) (679) Other assets and liabilities 42 86 128 NAV. 1,688 (31) 1,657 1. Primarily Lill
Slide 34: EPRA NTA per share movement
Pence 220 215 210 9.9p 205 0.1p 200 1.1p 0.9p 1.1p 212.1p 195 202.2p 201.1p 201.2p 190 200.3p 199.2p 185 180 Dec-20 Covent Garden Lillie Square Shaftesbury fair value Non-underlying Other Jun-21 revaluation revaluation movement costs
Slide 35: Group net debt to gross assets and covenants
GROUP NET DEBT : GROSS ASSETS 28% COVENT GARDEN SHAFTESBURY INVESTMENT VALUATION OF £1,688 MILLION 30 JUN 2021 FAIR VALUE OF £552 MILLION NET DEBT OF £304 MILLION* (Dec 2020: £352 million) £275 MILLION EXCHANGEABLE BOND WITH PLEDGE OVER C.10% OF SHAFTESBURY PLC SHARES FINANCIAL COVENANTS: £125 MILLI
Slide 36: Debt maturity profile
500 450 400 350 300 250 200 150 100 50 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030-2037 Secured Loan USPP Series 1 USPP Series 2 USPP Series 3 Exchangeable Bond The Covent Garden RCF was undrawn as at 30 June 2021
Slide 37: Tax on income and gains
TAX ON INCOME AND GAINS The total tax credit for the period, made up of both underlying tax and non-underlying tax, is £1.2 million. The Group is a UK Real Estate Investment Trust (REIT) and is therefore exempt from UK corporation tax on income and gains arising from its qualifying property rental b
Slide 38: Lillie Square: Phase 2 handovers, valuation and funding
CONTINUING TO PROGRESS PHASE 2 HANDOVERS − To date 97 units handed over representing £118m of net proceeds (£59m Capco share) − During the period contracts exchanged on bulk sale of 19 units and 20 car park spaces for £38 million. £18.6 million cash received with balance expected on completion in th
Capital & Counties Properties — H1 2021 Earnings Presentation on 6ix