Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — FY2015 Earnings Presentation
44 slides from Shaftesbury Capital's earnings presentation, Feb 24, 2016
Slide 1: Capital & Counties Properties PLC Annual Results 2015
Capital & Counties Properties PLC Annual Results 2015 24 February 2016 www.capitalandcounties.com
Slide 2: Forward-looking statements
This presentation includes statements that are forward-looking 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 different from a
Slide 3: Introduction
Introduction 1. INTRODUCTION AND OVERVIEW Financial Review Ian Hawksworth 2. FINANCIAL REVIEW Soumen Das Operating Update 3. COVENT GARDEN Soumen Das Looking Ahead 4. EARLS COURT PROPERTIES Gary Yardley 5. LOOKING AHEAD Ian Hawksworth Q&A 6. Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 4: Introduction
Introduction Financial Review Operating Update Ian Hawksworth, Chief Executive Looking Ahead Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 5: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 6: £3.7bn property value, 361p NAV per share, 1.5p dividend
Total property value Total return NAV per share Total dividend £3.7bn 1 17% 361p 1.5p per share +14% like-for-like +16% STRONG DEMAND FOR COVENT GARDEN PLANS ON TRACK AT EARLS COURT Most active year of leasing Demolition progressing well 74 new leases and renewals, 11% above Lillie Square Phase 1 co
Slide 7: Olympia and balance sheet highlights
Total property value Total return NAV per share Total dividend £3.7bn 1 17% 361p 1.5p per share +14% like-for-like +16% OPERATIONAL EXCELLENCE AT OLYMPIA ROBUST AND DISCIPLINED BALANCE SHEET Strong valuation +25% lfl Conservative 16% LTV EBITDA of £15m, +33% Completion of new £705m Covent Garden RCF
Slide 8: Valuation growth
VALUATION GROWTH Covent Earls Court £300m Garden Properties +16% £2.0bn £1.4bn1 £250m +16% lfl +9% lfl Initial yield: £200m 2.1% Total property value 3.7bn Equivalent yield: 1 3.5% £150m +9% +14% lfl £100m +25% £50m Venues £0.3bn +25% lfl 0 Covent Garden Earls Court Venues Properties H1 H2 1. Group
Slide 9: Financial Review
Introduction Financial Review Operating Update Soumen Das Looking Ahead Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 10: Underlying earnings summary
2015 2014 Var £m £m £m Net rental income 75.4 70.1 5.3 Administration costs (52.8) (43.2) (9.6) Net finance costs (20.1) (15.1) (5.0) Other 2.0 1.5 0.5 Tax on underlying earnings 3.0 (0.2) 3.2 Non-controlling interest 0.3 - 0.3 Underlying earnings 7.8 13.1 (5.3) Underlying earnings per share 0.9p 1.
Slide 11: Net rental income movement
80 £4.0m £75.4m £70.1m £2.0m £0.5m 70 £0.2m Venues £19.3m Venues £15.3m 60 50 Earls Court Earls Court Properties £17.8m Properties £18.0m 40 30 20 Covent Garden Covent Garden £36.8m £38.8m 10 0 2014 Covent Garden Earls Court Properties Venues Other 2015 Venues EBITDA £14.8m Capco Annual Results 2015
Slide 12: Covent Garden ERV and income bridge
£m 90 £15.3m 80 £13.6m 70 60 £1.6m £3.0m £0.4m £4.5m 50 £86.2m 40 £55.7m 30 £47.8m 20 10 Dec-15 Gross Rent-frees/ Stepped Turnover Lease / Under Income Contracted Vacancies Development Under-rented Dec-15 ERV Income Rent/Temporary Non-leased income Contract/Offer & Under Offer lettings Capco Annual
Slide 13: EPRA adjusted NAV
Dec-15 Dec-14 Var £m £m £m Investment & Trading Property 3,530 2,905 625 Unrecognised surplus on trading property 100 96 4 Net debt (579) (352) (227) Other 8 (19) 27 EPRA adjusted NAV 3,059 2,630 429 Number of shares in issue (diluted) 848m 846m 2m EPRA adjusted NAV per share 361p 311p 50p ECPL (Cap
Slide 14: NAV per share movement
370 0.9p 1p 50p 360 1.5p 350 340 330 320 361p 310 300 311p 290 280 Dec-14 Valuation of property Underlying Profits Dividend Other Dec-15 Diluted EPRA NNNAV 356 pence per share Capco Annual Results 2015 www.capitalandcounties.com
Slide 15: New £705 million unsecured RCF for Covent Garden
Proforma1 Dec-15 Dec-14 New £705 million unsecured RCF for Covent Garden Net Debt2 £579m £352m – Replaces existing £665m facility signed in LTV 16% 12% February 2014 Group interest cover 123% 188% Cash and available facilities2 £452m £412m £648m – Reduces weighted average cost of debt from 3.3% to 2
Slide 16: Cash flow and liquidity
700 £655m 600 500 £462m £210m 400 £543m 300 £361m 200 £65m £40m £7m 100 £285m £112m £8m £101m 0 Dec-14 Operating cash Non controlling Net borrowings Investing activities Dividend & Other Covent Garden Dec-15 flow interest drawn RCF 1 Cash Undrawn Facilities 1. Proforma adjusted for new RCF 2. Number
Slide 17: Operating Update
Introduction Financial Review Operating Update Soumen Das Looking Ahead Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 18: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 19: Asset management, tactical acquisitions, target returns
Asset management Tactical acquisitions Target Return Strategic development 10–12% Creativity Planning Land assembly Target Return Land enablement 12–15% Selective development Capco Annual Results 2015 www.capitalandcounties.com
Slide 20: Covent Garden portfolio and leasing
Portfolio value ERV New lettings & renewals Acquisitions £2.0bn +12% (lfl) +11% £50m +16% like-for-like £86m Ahead of Dec-14 ERV Brands attracted to the estate’s retail environment and customer experience Most active year of leasing – 74 new leases and renewals – 100th brand signed to estate New Zon
Slide 21: ITZA psf rental levels December 2015
ITZA psf (£) – December 2015 £1,600 £1,400 £1,200 £1,000 £800 £600 £400 £200 -- * Based on 30 ft Zone A, includes Old Bond St, Oxford St West and Regent St. (Covent Garden based on 20 ft Zone A.) ** Covent Garden average based on all streets, including Market Building. Capco Annual Results 2015 www.
Slide 22: Acquisitions since Dec 2009
£1,000+ £600 - £999 £450 - £599 £300 - £449 £200 - £299 £0 - £199 Acquisitions Since Dec 2009 Capco Annual Results 2015 www.capitalandcounties.com
Slide 23: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 24: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 25: SushiSamba and new concepts on the estate
SushiSamba to occupy Opera Terrace – Redevelopment of iconic rooftop restaurant 6 new concepts brought to the estate All day dining in the Market Building – Aubaine Complementary dining offer on Henrietta Street – Flat Iron – Frenchie First London flagship for Mariages Frères on King Street Capco An
Slide 26: Earls Court Properties
Introduction Financial Review Operating Update Gary Yardley Looking Ahead Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 27: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 28: Earls Court Properties structure
Earls Court Partnership Limited – Investment vehicle with TfL in respect of EC1 & EC2 land – Capco share 63%; business and development manager – Includes certain assets on and around Lillie Road Empress State Building – 100% owned by Capco Lillie Square – 50:50 JV with KFI Land subject to CLSA – Opt
Slide 29: Asset management, tactical acquisitions, strategic development
Asset management Tactical acquisitions Strategic development Creativity Planning Land assembly Land enablement Selective development Capco Annual Results 2015 www.capitalandcounties.com
Slide 30: Earls Court development area and values
Lillie Empress ECPL CLSA Other Total Square State 63% 100% 50% 100% 100% Gross External Development Area (m sq ft) Residential 2.7 3.2 1.0 0.8 - 7.7 Commercial 0.7 0.4 - 0.3 - 1.4 Total GEA 3.4 3.6 1.0 1.1 - 9.1 Dec-15 £803m n/a £222m £286m £46m £1.4bn Uplift (lfl) 14% n/a 4% 1% 3% 9% Note: Gross Ex
Slide 31: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 32: London's forecast housing requirement
London’s forecast housing requirement1 – An additional 2 million people living in London in 20 years – Over 40,000 new homes required per annum Increased Earls Court designation in ‘New Draft London Plan’ – Minimum of 7,500 new homes Consented, large scale scheme with a high transport accessibility
Slide 33: Lillie Square underpinned by strong fundamentals
Lillie Square underpinned by strong fundamentals Phase 2 sales underway – 40% of first release of 70 units reserved or exchanged – Sales prices +5%; slower sales rate than Phase 1 – Stamp duty incentives up to £8m (Capco share £4m) Construction of Phase 1 on track – Delivery of first units in 2016 –
Slide 34: Looking Ahead
Introduction Financial Review Operating Update Ian Hawksworth Looking Ahead Q&A Capco Annual Results 2015 www.capitalandcounties.com
Slide 35: Confident in our estates
Confident in our estates – Global economic and political challenges – Strong balance sheet underpins resilience through cycles Covent Garden – On track to achieve ERV target of £100m by December 2017 – Creating a desirable environment for brands and consumers Earls Court – Opportunities to maximise
Slide 36: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 37: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 38: Lease expiry profile and portfolio breakdown
LEASE EXPIRY PROFILE ANNUAL GROSS INCOME 2015: 3% Retail: 53% 2016: 15% F&B: 25% WALE 2017: 11% 7.4yrs 2018: 17% £48m Leisure: 2% Offices: 16% 2019: 7% 2020+: 47% Residential: 4% PORTFOLIO VALUE TOTAL FLOOR AREA Retail: 53% Retail: 27% F&B: 18% F&B: 18% Leisure: 1% Leisure: 7% £2.0bn Offices: 12% 1m
Slide 39: Value uplift and realisation; ERV
£m VALUE UPLIFT AND REALISATION ERV £m 2,500 £100.0m 100 £155m £439m 90 £86.2m 2,000 £72m 80 £75.1m £935m 1,500 70 £58.0m 60 1,000 £2,005m £51.9m 50 £45.8m 500 £37.5m 40 £33.7m £548m 0 30 Dec-09 Valuation Acquisitions Capex Disposals Dec-15 2009 2010 2011 2012 2013 2014 2015 Guidance Gain 2017 Capco
Slide 40: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 41: Capco Annual Results 2015 www.capitalandcounties.com
Capco Annual Results 2015 www.capitalandcounties.com
Slide 42: Earls Court Masterplan and Empress State Building consent
Earls Court Masterplan consent – 10.1m sq ft (GEA) – 7,500 new homes (including Lillie Square); including 1,500 affordable homes – 10,000 new jobs – Over £450m community benefits Empress State Building consent – 610k sq ft (GEA) – Over 440 new homes; including over 100 affordable homes Earls Court M
Slide 43: IFRS to Group share reconciliation
Add back: Less: Joint Proportionate Non- Group IFRS Ventures1 consolidation controlling Share interest2 £m £m £m £m £m Investment & Trading Property 3,871 131 4,002 (472) 3,530 Net Debt (559) (10) (569) (10) (579) Other assets and liabilities 91 (121) (30) 13 (17) Non-controlling interest (469) - (4
Slide 44: Tax on income and capital gains
Tax on income – The underlying tax rate is 20% which is in line with the statutory corporation tax rate for 2015. – The main rate of corporation tax fell to 20% on 1 April 2015. Following the July 2015 Budget, the main rate of corporation tax will fall to 19% from April 2017 and 18% from April 2020.
Capital & Counties Properties — FY2015 Earnings Presentation on 6ix