Slide 1: Palace Capital Plc Interim Results
EXPERTS IN REGIONAL PROPERTY PALACE CAPITAL PLC INTERIM RESULTS HALF YEAR ENDED 30 SEPTEMBER 2022
Slide 2: Agenda
Agenda ⚫ Key highlights ⚫ Financial review ⚫ Operational review ⚫ Outlook ⚫ Appendices Page 1 | Palace Capital plc | Investor Presentation November 2022 | palacecapitalplc.com
Slide 3: Key Highlights
OVERVIEW Key Highlights ⚫ Disposals of investment properties for £4.8m in H1 at 25% above FY 22 book value. Post H1 further £4.1m sold totalling £8.9m YTD at 22% above FY 22 book value. ⚫ HQ York residential sales - 9 apartments H1 for £3.9m, YTD 13 apartments for £5.7 m ⚫ Gross debt reduced by 12.9
Slide 4: Key Financial Highlights
H1 23: FINANCIAL REVIEW Key Financial Highlights ADJUSTED PROFIT EPRA NTA GROSS DEBT* ANNUALISED BEFORE TAX PER SHARE COST SAVINGS £3.5m 356p £88.7m >£1.2m *Gross debt reduced by a further a £5.4m to £83.3m H1 22: £4.0m FY 22: 390p FY 22: £101.8m at 23 November 2022 following £5.0m repayment to Sant
Slide 5: Financial Statement Review
H1 23: FINANCIAL REVIEW Financial Statement Review INCOME STATEMENT 30 Sept 22 30 Sept 21 30 Sept 22 31 March 22 Gross property income (excl. ECL provision) £8.7m £8.6m BALANCE SHEET Property operating expenses (£1.3m) (£1.2m) Portfolio value £235.6m £259.0m ECL provision (£0.1m) - Cash £12.9m £28.1
Slide 6: Balance Sheet
H1 23: FINANCIAL REVIEW Balance Sheet EPRA NTA per share movement in the period 410p 2.0p 0.2p 400p 7.9p 7.0p (24.0p) 390p 380p (11.4p) 370p (7.0p) (4.1p) 360p 390.0p (3.1) (1.5p) 350p 340p 356.0p 330p EPRA NTA AT 31 Share buyback Adjusted profit Sale of assets HQ trading Property Bank House Cash di
Slide 7: Capital Structure
H1 23: FINANCIAL REVIEW Capital Structure Significantly reduced debt with conservative gearing ⚫ Drawn debt reduced by £13.1m to £88.7m at 30 September Drawn Drawn Drawn 2022 (FY 22: 101.8m) Debt 31 Debt 30 Debt 23 Debt Lender Hedging March 22 Sept 22 Nov 22 Maturity ⚫ A further £5.4m repaid post 30
Slide 8: Portfolio Overview
OPERATIONAL REVIEW Portfolio Overview 3.2% March September 2022 2022 7.2% Portfolio value £259.0m £235.6m Office 8.0% Net initial yield* 5.6% 6.8% Industrial Reversionary yield* 7.5% 8.6% Leisure 47.7% Contracted rental income £16.7m £17.1m 16.5% Residential Estimated rental value** £19.4m £19.8m Re
Slide 9: Like-for-Like Investment Property Valuations
OPERATIONAL REVIEW Like-for-Like Investment Property Valuations Valuations down following volatility and uncertainty in the markets EPRA Market value Market value Net Gain/(loss) topped up Reversionary 31 March 30 September Initial % Net Initial Yield ⚫ Impact of higher borrowing 2022 (£) 2022 (£) Y
Slide 10: Asset Management Overview
OPERATIONAL REVIEW Asset Management Overview Good letting activity in the period ⚫ 23 lease events to 30 September 2022, 12% £1.5m ahead of ERV, providing additional income of +15% £0.7m pa made up of: £1.2m ⚫ 7 new leases: 5% ahead of ERV, providing Adding value additional income of £0.5m pa £0.9m
Slide 11: Portfolio Growth Potential
OPERATIONAL REVIEW Portfolio Growth Potential +16% potential uplift £21.0m ⚫ Majority of reversion is £20.0m £0.7m (£0.2m) through letting vacant £19.0m space £18.0m £2.2m ⚫ Dedicated resource in the £19.8m team focused on letting £17.0m vacant units £16.0m £17.1m ⚫ 114,000 sq ft of asset management
Slide 12: ERV Growth
OPERATIONAL REVIEW ERV* Growth 3.6% on a like-for-like basis Like-for-like ERV at 31 ERV at 30 Sector increase/ (decrease) March 2022 September 2022 % Office 11,236,062 11,441,397 1.8% Industrial 2,810,100 3,010,306 7.1% Leisure 3,270,645 3,496,885 6.9% Retail 1,383,096 1,366,131 (1.2%) Retail Wareh
Slide 13: Disposals
OPERATIONAL REVIEW Disposals INVESTMENT PROPERTY DISPOSALS: ⚫ Four investment properties sold in the period to 30 September 2022 to the value of £4.8m, 25% ahead of 31 March 2022 book value, 22% ahead of purchase price, 10% ungeared IRR ⚫ Two investment properties sold post 30 September 2022 for £4.
Slide 14: Outlook
LOOKING FORWARD Outlook ✓ Recent increase in interest rates with the prospect of further increases has adversely impacted the commercial property market resulting in a re-pricing of assets ✓ Occupational market has remained resilient as evidenced by the increases over estimated rental values obtaine
Slide 15: Appendices
EXPERTS IN REGIONAL PROPERTY APPENDICES
Slide 16: Sector splits
APPENDICES Sector splits Market value % of Portfolio WAULT No. No. Contracted rental Total ERV 30 Sept 2022 by market Area (sq ft) ERV (£)* to break properties leases income p.a. (£) of void (£) (£) value (yrs) Office 112,465,000 47.7% 19 94 651,046 8,952,681 11,441,397 3.3 1,823,775 Industrial 41,0
Slide 17: EPRA Occupancy
APPENDICES EPRA Occupancy 89.0% 0.2% (0.1%) 88.5% 88.0% 2.2% (1.9%) 87.5% 88.9% 88.5% 87.0% 86.5% 86.0% EPRA Occupancy at 31 Vacancies New leases Change In ERV Disposals EPRA Occupancy at 30 March 2022 September 2022 Page 16 | Palace Capital plc | Investor Presentation November 2022 | palacecapitalp
Slide 18: Rent collection and Dividends
APPENDICES Rent collection and Dividends RENT COLLECTION 100% 98% 99% 30 Sept DIVIDENDS 30 Sept 21 22 75% Adjusted profit before tax £3.5m £4.0m Profit on disposals (incl. trading profit) £1.0m £3.2m 50% Adjusted profit before tax & profit on £4.5m £7.2m disposals total 25% Dividends paid £3.2m £2.5
Slide 19: Biographies
Biographies STEVEN OWEN MATTHEW SIMPSON Interim Executive Chairman Chief Financial Officer Steven is the Non-Executive Chairman of Chartered Certified Accountant FCCA FTSE 250 property investment group Primary Matthew is a Chartered Certified Health Properties plc (“PHP”) having been Accountant, wit
Slide 20: Disclaimer
Disclaimer The information in this presentation may include forward-looking statements, which are based on current expectations and projections about future events. These forward looking statements reflect the Directors’ beliefs and expectations and are subject to risks, uncertainties and assumption
Slide 21: mi noon
mi noon oon jelole! aaa PALACE CAPITAL plc