Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — H1 2014 Earnings Presentation
38 slides from Shaftesbury Capital's earnings presentation, Aug 1, 2014
Slide 1: 2014 Interim Results
Capital & Counties Properties PLC 2014 Interim Results www.capitalandcounties.com 1 August 2014
Slide 2: Important notices
Important notices 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 materiall
Slide 3: Agenda
Agenda Introduction Ian Hawksworth Financial review Soumen Das Operating review Ian Hawksworth and Gary Yardley Q&A 3 2014 Interim Results Presentation
Slide 4: Capco: Value growth and value creation
Capco Value growth and value creation Focus on two major estates in central TOTAL PROPERTY VALUE London £2.6 BILLION, +7.5% (LfL) Covent Garden – Value growth through asset management, West End West London development and acquisitions £1,325m £1,223m Earls Court Properties Earls Court Covent G
Slide 5: Highlights
Highlights Value growth and value creation Covent Garden ERV target adjusted to £85 – Reflects £76 million of acquisition activity and lettings million by December 2016 progress – New leases, renewals and rent reviews 6.0% above December 2013 ERV Positive pricing evidence at Lillie Square – Aver
Slide 6: Financial review
Financial review Soumen Das 6 2014 Interim Results Presentation
Slide 7: Underlying earnings
Underlying earnings Highlights 2014 H1 2013 H1 Var £m £m £m Net rental income 37.4 32.2 5.2 Admin costs (19.4) (15.5) (3.9) Net finance costs (8.0) (10.7) 2.7 Tax on underlying earnings (2.2) (1.4) (0.8) Underlying earnings 7.8 4.8 3.0 Underlying earnings per share 1.0p 0.6p 0.4p Proposed interim di
Slide 8: Net rental income
Net rental income £40m £1.4m £3.7m £37.4m £1.2m £1.1m £32.2m Venues £8.9m Other: £1.2m £30m Other £1.1m Venues £7.5m Earls Court Properties £9.6m Earls Court £20m Properties £5.9m £10m Covent Garden Covent Garden £17.7m £18.9m 0 H1 2013 Covent Garden Earls Court Venues Other H1 2014 Properties Ven
Slide 9: Adjusted balance sheet
Adjusted balance sheet Jun-14 Dec-13 Var £m £m £m Investment & Trading Property 2,435 2,166 269 Unrecognised surplus on trading properties 97 69 28 Net debt (218) (329) 111 Other (7) 6 (13) EPRA adjusted NAV 2,307 1,912 395 Number of shares in issue 835.7m 757.9m 77.8m TfL transaction not yet full
Slide 10: EPRA adjusted diluted net assets per share
EPRA adjusted diluted net assets per share NAV +9.5% to 272 pence 280p 7.4p 1.0p 270p 19.3p 2.6p 1.0p 0.6p 260p 250p 240p 230p 272p 220p 249p 210p 200p 190p 180p Dec-13 Valuation & Underlying Impact of capital Exceptional items Dividend Other Jun-14 sale of profits raising upon CG (net of scrip) pro
Slide 11: Debt management
Debt management Net Debt Cash and available facilities of £641 million at 30 £218m £329m £100m June 2014 £71m £45m 0 £130 million construction facility for Lillie Square Cash Debt Cash Debt (Capco share £65 million) (£100m) (£289m) £665 million unsecured revolving credit facility for (£200m) (
Slide 12: Cash utilisation
Cash utilisation Substantial liquidity of £641 million £600m £500m £400m £570.0m £258.1m Undrawn £300m Facilities £25.5m £200m £97.9m £22.6m £100m £0.4m £0.7m £80.2m £7.5m £70.5m £45.0m Cash 0 Dec-13 Operating Capital raise Exceptional Acquisitions Capex Net Dividend Other Jun-14 cash flow finance c
Slide 13: Operating review
Operating review Ian Hawksworth and Gary Yardley 13 2014 Interim Results Presentation
Slide 14: Valuation
Valuation Strong valuation + 7.5% (LfL) Market value Market value Value ERV Initial Equivalent Jun-14 Dec-13 change1,2 change 1 yield yield £m £m Covent Garden 1,325 1,156 6.2% 4.2% 3.0% 4.1% EC1 & EC2 522 453 13.1% Empress State 274 265 3.3% Lillie Square 3 170 153 8.4% Venues 167 161 2.0% Other 4
Slide 15: Covent Garden: Growing and creating value
Covent Garden Growing and creating value ERV target adjusted to £85 million by December 2016 – Reflects lettings and acquisition activity Expand the premium and contemporary luxury retail offer Improve the dining variety and quality Extend the high quality residential portfolio Grow the es
Slide 16: Covent Garden Highlights
Covent Garden Highlights Value £1.3 billion +6.2% (LfL) ERV £65.7 million +4.2% (LfL) New lettings, renewals and rent reviews 6.0% above Dec 2013 ERV Acquisitions totalling £76 million1 Kings Court & Carriage Hall – Start on site in autumn 2014 The Beecham and The Southampton – Delivery
Slide 17: Covent Garden: New brands and openings across the estate
Covent Garden New brands and openings across the estate H1 2014 Fred Perry relocated from the Royal Opera House Arcade to Henrietta Street 17 2014 Interim Results Presentation
Slide 18: Covent Garden: Adjusted ERV target of £85 million by December 2016
Covent Garden Adjusted ERV target of £85 million by December 2016 ITZA - June 2014 Covent Garden significantly below prime central London average £1,000 £900 Proactive asset management has £800 increased rents £700 £600 Potential for strong growth in other £500 Covent Garden streets £400 £300
Slide 19: Covent Garden: Zone A distribution June 2014
Covent Garden Zone A distribution June 2014 19 2014 Interim Results Presentation
Slide 20: Covent Garden: Larger scale developments
Covent Garden Larger scale developments 20 2014 Interim Results Presentation
Slide 21: Earls Court Properties
Earls Court Properties The largest regeneration opportunity in central London 21 2014 Interim Results Presentation
Slide 22: Earls Court Properties: consented land
Earls Court Properties Over 70 acres of consented land where Kensington, Chelsea and Fulham meet Masterplan: – Formal outline planning consent for 10.1 million sq ft – 7,500 new homes (including Lillie Square) – 1,500 affordable homes – Over £450 million community benefits Empress State Building
Slide 23: Earls Court Properties: Valuations
Earls Court Properties Valuations EC1 & EC2 CLSA Lillie Empress 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 1 - 9.1 Jun-14 £522m n/a £170m £274m £90m £1,056m Uplif
Slide 24: Earls Court: Continued momentum
Earls Court Continued momentum Venture with TfL established – Capco share 63 per cent Earls Court Village detailed planning consent – 16 acres, 2.4m sq ft residential, mixed-use space – Over 1,200 new homes Pre-enabling works started at EC1 & EC2 – Demolition expected in 2015 Empress State c
Slide 25: Lillie Square
Lillie Square An exciting new development 25 2014 Interim Results Presentation
Slide 26: Lillie Square: Positive pricing evidence established
Lillie Square Positive pricing evidence established Valuation £170 million as at June 2014 +8.4% (LfL, Capco share 50%) Positive sales launch of phase 1 – Phase 1 delivering 237 units – Over 90% of units reserved or exchanged Average phase 1 sales price of £1,400 - £1,500 psf – Premium units p
Slide 27: Outlook
Outlook Value growth and value creation Covent Garden – Adjusted ERV target of £85 million by December 2016 – Continued repositioning of estate – Kings Court and Carriage Hall Earls Court Properties – Further planning and land assembly to create value – Enabling works for EC1 & EC2 – Value progr
Slide 28: Q&A
Q&A
Slide 29: Appendices
Appendices Covent Garden The Earls Court Masterplan Taxation 29 2014 Interim Results Presentation
Slide 30: Covent Garden: Zoning plan
Covent Garden Zoning plan Premium fashion Luxury accessories Food and dining 30 2014 Interim Results Presentation
Slide 31: Covent Garden: Restoring residential heritage
Covent Garden Restoring Covent Garden’s residential heritage The Beecham – 9 luxury apartments for sale/rent – Delivery in autumn 2014 – 1 unit exchanged, achieving £2,850 psf The Southampton – 7 premium apartments for rent – Delivery in autumn 2014 Future pipeline – 45 premium apartments at K
Slide 32: Covent Garden properties and lettable units
Covent Garden 69 properties and 397 lettable units 32 2014 Interim Results Presentation
Slide 33: Covent Garden: Gross income to ERV
Covent Garden £70m Gross Income to ERV £10.2m £60m £9.2m £50m £0.8m £2.1m £0.5m £40m £65.7m £30m £42.9m £45.5m £20m £10m Jun 14 Gross income Rent-frees / Stepped Turnover Income contracted & Vacancies Development* Under-rented Jun 14 ERV rent lease under offer Value uplift and realisation £78m ERV £
Slide 34: Covent Garden: Ownership
Covent Garden Ownership 34 2014 Interim Results Presentation
Slide 35: Covent Garden: Zone A distribution
Covent Garden Zone A distribution December 2009 June 2014 35 2014 Interim Results Presentation
Slide 36: The Earls Court Masterplan
The Earls Court Masterplan Earls Court Masterplan consent – 10.1 million sq ft (GEA) – 7,500 new homes (including Lillie Square) – 1,500 affordable homes – 10,000 new jobs – Over £450 million community benefits Empress State Building consent – 610k sq ft (GEA) – 442 new homes – 102 affordable ho
Slide 37: Summary balance sheet: IFRS to adjusted disclosures
Summary balance sheet: IFRS to adjusted disclosures 30 June 2014 Unrecognised Adjustments surplus on for Joint trading Other Adjusted IFRS Ventures properties Adjustments (EPRA NAV) (1) (2) (3) £m £m £m £m £m Investment & Trading Property 2,346 89 97 2,532 Net debt (231) 13 (218) Other assets and li
Slide 38: Taxation
Taxation Summary Tax on income – The underlying tax rate is 21.6% which is broadly in line with the Statutory Corporation tax rate for 2014 of 21.5% – As announced in the March 2013 budget the main rate of Corporation tax will fall to 20% from 1 April 2015 – Expected medium-term underlying tax rat
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