Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — FY2021 Earnings Presentation
40 slides from Shaftesbury Capital's earnings presentation, Feb 23, 2022
Slide 1: Annual Results 2021
capco Capital & Counties Properties PLC ? ; : ue = Annual 23 February 2022
Slide 2: Introduction
Introduction lan Hawksworth Financial review Situl Jobanputra Covent Garden Michelle McGrath Looking ahead lan Hawksworth Q&A 2 Annual Results 2021
Slide 3: Introduction
Sig — Introduction lan Hawksworth a £ S 2 4 E = S— ae = 3 ‘Annual ResultS 202% : == ee capco
Slide 4: Portfolio valuation
Portfolio valuation £2.4bn1
Slide 5: 2021 overview
2021 overview Decisive action generating positive results — Proacti - High occ Recovery of trade and confidence in H2 2021 achir Covent Garden, the West End’s most vibrant destination Strong leasing demand C t Garden ERV and valuation r Financial and investment discipline ~ Bala iti fc th and i
Slide 6: Group headline financials
Group headline financials EPRA NTA Total property Property Snaery noe Net debt to per share return valuation share 9 gross assets 212.4p +1.5% £1.8bn 0.5p 24% +0.3p -1.3% Ifl +1.2p -4 ppts Covent Garden valuation growth Investment in Shaftesbury H2 2021 +4.6% 19.4% total return since initial acquisi
Slide 7: A sustainable future
A sustainable future Detailed Net Zero Carbon Pathway by 2030 published - Reducing embodied and operational carbon - Prioritising innovation, climate adaptation and resilience ~ Minimise carbon offsetting Improving EPC ratings across the estate = Currently twothirds of units have AC rating Responsib
Slide 8: Areas of focus
\ Ai Creating long-term value
Slide 9: Financial review
Financial review Situl Jol pul SN 9 Afipual RBBuits 2021
Slide 10: Note: All numbers shown at Group share
Note: All numbers shown at Group share
Slide 11: Gross income and contracted income bridge
100 80 60 40 20 0 Dec-21 Gross Rent-frees and Turnover and other Contracted and Total contracted Vacancy Development and Net over rented Dec-21 Income stepped rents income under offer and under offer refurbishment ERV 1. 2019 ERV adjusted for disposal of Wellington block, Southampton Street, Bedford
Slide 12: Net asset value and balance sheet summary
1 The market value of investment, development & trading property is £1,815m (31 December 2020: £1,942m) 2 Capco’s investment in Shaftesbury PLC held at fair value, 615 pence per share at 31 December 2021 (31 December 2020: 569 pence) Note: All numbers shown at Group share. A reconciliation of the Gr
Slide 13: Valuation bridge Dec-20 to Dec-21
2,500 2,000 1,500 1,000 500 0 Dec-19 Dec-20 Disposals Revaluation, Jun-21 ERV movement Yield Assumed loss Disposals Dec-21 valuation valuation capex and valuation movement of near-term valuation other income 1. Dec 2020 equivalent yield was 3.94% unadjusted for the sale of the Southampton Street, Be
Slide 14: Shaftesbury investment
Exchangeable 750 bond at 723.5p1 700 650 600 550 500 Average investment price 517p 450 400 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 19% capital appreciation (from acquisition to 31 December 2021) and dividend income of £6.2 million
Slide 15: Cash and undrawn facilities
1,000 800 600 400 200 0 Dec-20 Disposals Financing Development of Dividend Operating cash flow Dec-21 property and other CASH UNDRAWN FACILITIES Operating cash flow and other includes Shaftesbury dividend income Note: All numbers shown at Group share
Slide 16: Access to substantial liquidity
| | Access to substantial liquidity Resilient and flexible ™ capital structure ne Average cost of debt 2.8% Average maturity of drawn debt 5 years Covent Garden net debt £254m Covent Garden LTV £300m RCF refinancing completed Early repayment of £75m nominal of private placement notes 15% Protected a
Slide 17: Focus on recovery and growth
Focus on recovery and growth Positioned for net rental income recovery and growth Efficient cost management and capital allocation Dividend profile to be progressed with growth in underlying earnings H2 valuation increase for Covent Garden Recovery potential in rental value and yields vs pre-pandemi
Slide 18: Covent Garden
Covent Gar d am ae fg BPs ee alResults 2021
Slide 19: Covent Garden performance
Covent Garden performance a ® oo = Property value ERV Disposals EPRA vacancy £1.7bn £76m £95m 2.6% H1 -5%, H2 +5% Ifl H1 -4%, H2 +3% Ifl -0.9ppts World-class customer line up Investment in our estate High occupancy throughout pandemic - Asset management opportunities Strong levels of leasing activit
Slide 20: Retail and F&B market occupational drivers
Retail and F&B market occupational drivers Polarised demand towards prime locations @&) Owning your customer / consumer @) Data / performance metrics &) Ability to expand - Flexible approach @) Sustainability and net zero carbon - Green leases 20 Annual Results 2021
Slide 21: Central London Prime rents
1,600 2019 1,400 2021 1,200 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 London Garden House East East West West Street Prime* Average**
Slide 22: Continued leasing progress
Continued leasing progress − − − − Strong leasing pipeline − Targeted categories − Focus on productivity and brand value −
Slide 23: Strong occupier line up; resonating with the consumer
Strong occupier line up; resonating with the consumer Ce wheat i TAG requ, UNI Reformation ars we, QLO WatchHouse. kick Ame: Oneal ways TUDOR EMPRESX C&C % BUCHERER \/ASH| AVE MARIO GurRiAIN STRATHBERRY Maison Margiela 7 Glossier. rants ney ARC'TERYX MRS RIOT 3HenriettaSt. CoventGarden. 23 Annual Re
Slide 24: Investing in our estate
Investing in our estate − − Realised £95m proceeds from disposals Tracking investment market and specific opportunities closely −
Slide 25: Looking ahead
Looking ahead lan Hawksworth ete —————
Slide 26: Looking ahead
Looking ahead Strong leasing pipeline driving income and rental value growth Increase investment in our estate and take advantage of further market opportunities Responsible stewardship, implement our ESC strategy to deliver value for stakeholders Maintain a strong balance sheet and cost discipline
Slide 27: Q&A
Slide 28: ESG ratings and benchmarks
1. Green Star awarded 2. FTSE4Good – Capco remains a constituent of the index, 2021 score not yet available, 2020 score remains applicable
Slide 29: Net Zero Carbon
Net Zero Carbon by 2030 Focused on five key activities: 50% reduction in embodied carbon ~ Prioritise innovative refurbishment using sustainable materials - Whole Life Carbon assessments 60% reduction in operational carbon Drive down energy demand Prioritise innovation and renewables - New technolog
Slide 30: Covent Garden portfolio by use
> - DMA AAW od Retail F&Bt Office Residential Valuation £851m £434m » Grossincome £28.5m £16.4m > ERV £36.5m £18.0m Area (square foot) 0.4m 0.2m Units 120 68 r within Retail. (2020: £1.6m ERV and £1.8m Gross Income) % Covent Garden portfolio 1. Ten cafés totalling £1.5m of ERV and £1.8m Gross Income
Slide 31: Covent Garden portfolio properties, lettable units
Covent Garden portfolio 71 properties, 503 lettable units Lease expiry profile’ m 2022: 18% 2023: 13% WALE 7 6yrs m 2024: 8% = 2025: 5% ‘> = 2026+: 56% 1. Lease expiry profile based on the eatier of lease break and lease expiry Property value gi mRelail: 49% mF8B: 25% £1.7bn = Offices: 16% mResident
Slide 32: Covent Garden portfolio analysis
Covent Garden portfolio analysis December 2021 Zone A Map CBRE TE (1% aw £801-£1,200 a 2501-2800 mf £301-£500 #" £0-£300 32 Annual Results 2021 capce
Slide 33: Note: All numbers shown at Group share
Note: All numbers shown at Group share
Slide 34: Summary balance sheet
Summary balance sheet Group share to IFRS as at 31 December 2021 less: Group share Joint ventures! IFRS Sm £m £m Investment, development & trading property 1,779 (84) 1,695 Net debt (599) (23) (622) Equity investmen? 596 596 Other assets and liabilities 18 99 117 NAV 1,794 (8) 1,786 1. Primarily Lil
Slide 35: EPRA NTA per share bridge
220 5.1p 0.5p 215 1.1p 1.4p 210 1.8p 1.0p 205 212.1p 212.4p 200 195 190 Dec-20 Covent Garden Lillie Square loss Shaftesbury fair Underlying Non-underlying Dividend & other Dec-21 loss on revaluation on revaluation and value movement earnings costs and sale profit on sale
Slide 36: Balanced capital structure
Balanced capital structure Group net debt : gross assets Covent Garden Net debt of £254 million’ (2020: £352 million) New £300 million revolving credit facility completed September 2021 - Fully undrawn - Marginal cost of drawdown currently c.1.75% per annum, September 2024 maturity £550 million US P
Slide 37: 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 Secured Loan
Slide 38: Taxation summary
Taxation summary Tax on income and gains The total tax charge for the year, made up of both underlying tax and non-underlying tax, is £0.7 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 pr
Slide 39: Lillie Square joint venture
Lillie Square joint venture Continuing to progress sales - 25 units completed during the year representing £47 million - Includes bulk sale of 19 units for £38 million which completed in December 2021 = 3 units remain available in Phase 1 and 66 units in Phase 2 Valuation ~ 14.1% decline [likeforlik
Slide 40: Important notices
Important notices This presentation contains “forwarHooking 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 results
Capital & Counties Properties — FY2021 Earnings Presentation on 6ix