Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — FY2011 Earnings Presentation
39 slides from Shaftesbury Capital's earnings presentation, Feb 29, 2012
Slide 1: 2011 Final Results
€, q ‘THE DESSERT DELI ~ 2011 } Pinal Results 29 February 2012 Capital & Counties Properties PLC| 4 a § |
Slide 2: Important notices
Important notices This presentation includes statements that are forwarcdlooking in nature. Forwarclooking 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
Slide 3: Agenda
Agenda © Introduction Ian Hawksworth © Financial review Soumen Das © Business review Ian Hawksworth & Gary Yardley © Q&A Page no.3 capitalandcounties.com Capital & Counties Properties PLC 2011 Annual Results
Slide 4: Strengths of our business
Capco Strengths of our business @ A focus on prime central London TOTAL PROPERTY VALUE £1.6 billion © Dominant holdings concentrated in large estates West End © Active asset management and selective £1,049m redevelopment potential — © Rental resilience and capital value £471m appreciation Empress St
Slide 5: Highlights
Highlights Positive momentum @ NAV +11.7% to 166 pence per share, total return 12.7% © Valuation +9.2% {ft capital) + H2:Capital growth + 5.2 % © Prudent capital management * £100 million equity raised * £300 million debt financing * £103 million disposals * Further GCP disposals in 2012 including £
Slide 6: Financial review
Financial review Soumen Das Page no. 6 capitalandcounties.com Capital & Counties Properties PLC 2011 Annual Results
Slide 7: Underlying earnings
Underlying earnings Highlights Net rental income Admin costs Net finance costs Tax on underlying earnings Underlying earnings Underlying earnings per share Full year dividend per share 69.0 (22.2) (34.8) (2.4) 9.5 1.4p 1.5p 69.0 (18.6) (38.9) (2.3) 9.2 1.5p 1.5p Var £m (3.6) 4.] (0.1) 0.3 (0.1)p Cap
Slide 8: Underlying earnings notes
* Includes other rental income £0.6 million • •
Slide 9: Balance sheet
Balance sheet Var £m Portfolio value 1,617 1,378 239 Investments 20 66 (46) Net debt (464) (476) 12 Other assets and liabilities (70) (85) 15 NAV 1,103 883 220 EPRA adjusted diluted NAV 1,145 926 219 EPRA adjusted diluted NAV per share 166p 148p 18p Number of shares in issue 683.9m 621.8m 62.1m @ EP
Slide 10: EPRA adjusted diluted net assets per share
EPRA adjusted diluted net assets per share NAV + 11.7% to 166p pence 180 175 170 165 1.5p 160 155 150 . 140 Dec-10 Valuation Underlying China Dividend Exceptional Other Dec-11 surplus profits revaluation items Page no. 10 capitalandcounties.com Capital & Counties Properties PLC 2011 Annual Results
Slide 11: Net debt
• • 200 100 0 million -100 -200 -300 • -400 -500 • -600 -700
Slide 12: Cash utilisation
Cash utilisation Substantial liquidity from internal resources £m £96.6m 400 350 £103.2m _ lL £36.7m 250 150 £188.5m 50 Dec10 Operational Disposals Capital Acquisitions Capex Interest Dividend Other Dec-11 pre Net Dec11 cash flow raise financing _ borrowings repaid ® Over £130 million of proceeds to
Slide 13: Operating review
Operating review Ian Hawksworth and Gary Yardley Page no. 13, capitalandcounties.com Capital & Counties Properties PLC 2011 Annual Results
Slide 14: Valuation
Valuation Strong 2011 valuation +9.2% «r) ERV Initial Hj Equivalent Market value Hj Market value Dec-11 Dec-10 change? yield yield Investment properties Covent Garden 808 640 9.2% 8.8% 3.8% 5.3% GcP 241 | 260 ' 9.8% 11.4% 3.9% 5.1% Empress State 103 ' 103 | - - 6.7% 6.2% Total non exhibition propert
Slide 15: Covent Garden Strategy
Covent Garden Strategy Grow ERV to £50 million by end of 2013 Drive passing rent Expand the contemporary luxury offer Transform the food and dining Extend the residential portfolio © 0 0 6 86 @ Grow the estate boundaries through tactical acquisitions The Rugby Tweed Run, 2011 Page no. 15 capitalandc
Slide 16: Capco's Covent Garden Estate Holdings
• Capco’s Covent Garden Estate Holdings Acquisitions since Dec 10 Assets held at Dec 10 • Kings Court (5 properties) • 35 King Street • 11 James Street • 1a Henrietta Street (property swap)
Slide 17: Covent Garden Facts & figures
Covent Garden Facts & figures Mix of uses by area 52 properties 334 lettable units 834,000 sq ft 89% ABC1s (Uk visitors Footfall robust at 44.1 million © 0 0 6 86 @ Adjusted occupancy 97.5% Page no.17 capitalandcounties.com Capital & Counties Properties PLC 2011 Annual Results
Slide 18: Gross income
Note: Gross income = passing rent + non-leased income
Slide 19: Covent Garden Rental Zone Map
• Covent Garden Rental Zone Map *Based on 30ft Zone A, includes Bond St, Oxford St and Regent St (Covent Garden based on 20ft Zone A) ** Covent Garden average based on all retail units along given streets & Market Building- Source CBRE
Slide 20: Covent Garden Lettings
Covent Garden Lettings © 78 leasing transactions completed * Rental value £8 million * Average 8.8% above December 10 ERV © Oliver Sweeney (14 King Street, 956 sq fi * 118 % above previous passing rent * 23% increase on December 10 ERV + ITZAincreased by 82% to £311 since 2008 © Pretty Green (Unit 4
Slide 21: The Henrietta (34 Henrietta Street)
The Henrietta (34 Henrietta Street)
Slide 22: The Great Capital Partnership
The Great Capital Partnership Creating value, recycling capital o) io) © £48 million disposals in 201 1 capco share} + Average 8.2% above December 2010 valuation £27 million disposals in 2012 to date (capco share) * 18.2% above December 2011 valuation £75 million (Capco share) disposal to GPE * 5.4%
Slide 23: Chongqing, Caiyun Lake; Fifth Square, Beijing
Chongqing, Caiyun Lake Fifth Square, Beijing
Slide 24: Earls Court and Olympia Strategy
Earls Court and Olympia Strategy © Maintain a robust exhibition business, including improvements to Olympia © Secure planning consent for the Terry Farrell Masterplan © Finalise TfL lease extension and LBHF land agreement © Establish development framework and CGI Eats Court Masten realisation/fundin
Slide 25: Earls Court and Olympia valuation
• 1 Valuation change takes account of amortisation of lease incentives, capital expenditure and fixed head leases 2 Like-for-like 3 Comprising Maclise Road, G Gate, Empress Place, Cluny Mews and Old Brompton Road
Slide 26: Graduate Fashion Week, 2011
• Graduate Fashion Week, 2011 The London International Horse Show , 2011
Slide 27: Four Urban Villages and a 21st Century High Street
• • TfL Four Urban Villages and a 21st Century High Street 1. Earls Court Village 4. West Kensington Village 2. Seagrave Road 5. North End Village * Financial Times, 22 June 2011 3. West Brompton Village 6. 21st Century High Street
Slide 28: The Earls Court Masterplan Milestones
The Earls Court Masterplan Milestones ECOA and Seagrave Road Farrell’s ECOA Masterplan planning applications submitted launched LBHF leader states that a 2d stage consultation LBHF consults on 1st stage SPD consultation comprehensive approach is the launched on preferred inclusion of the estates lau
Slide 29: Significant Earls Court land ownerships
• • • • • • • • • Significant Earls Court land ownerships Earls Court, TfL Seagrave Road, Roxby Place Empress State LBHF Building
Slide 30: Seagrave Road
Seagrave Road Planning consent and partner secured ® ® Valuation £116 million as at December 2011 +6.2% ty Resolution to grant detailed planning permission received in February 2012 £131 million conditional 50:50 JV agreement with the Kwok Family Interests * £66 million liquidity to be released * Va
Slide 31: Outlook
Outlook Positive momentum © Central London real estate market likely to remain positive and active * Impact of Olympics and Queen’s Diamond Jubilee celebrations in London © Macroeconomic risks remain © Covent Garden * Further ERV growth and letting activity anticipated © Earls Court * Secure plannin
Slide 32: Earls Court CGI
Earls Court CGI
Slide 33: Appendices
Appendices Financial covenants Covent Garden GCP Taxation © 0 8 8 0 Portfolio analysis Capital & Counties Properties PLC 2011 Annual Results Page no. 33 capitalandcounties.com capco
Slide 34: Financial covenants
Financial covenants Maturity 2013 2013 2013 2016 2017 Facility Debt' £m Earls Court & Olympia 94 Empress State 69 GcP 113 Covent Garden 150 Covent Garden 112 ‘As at 31 January 2012 LTV Interest Cover 150% 120% 120% 130% 120% Actual Interest LTV Cover - 214% - 148% 47% 132% 36% 212% 45% 165% Page no.
Slide 35: Covent Garden Zoning plan
Covent Garden Zoning plan * Long Acre/James Street/ROH SY ¢ Stylish mid-market * Floral St + Boutique * King St A * Contemporary luxury * Southampton St * Outdoor specialists “st A \ * Market Building (= = + Independents, specialists and casual dining — * Russell St/Maiden Lane/Henrietta * Food and
Slide 36: Covent Garden Portfolio statistics
Covent Garden Portfolio statistics Lease expiry profile (WALE 8.2 years) 51% 15% Portfolio by value (E808m) a% 3% | 11% Annual gross income (£33.9m) By floor area (834k sq ft) 17% 11% 23% Capital & Counties Properties PLC 2011 Annual Results Page no. 36 capitalandcounties.com
Slide 37: The Great Capital Partnership Portfolio statistics
The Great Capital Partnership Portfolio statistics Lease expiry profile (WALE 7.6 years) Annual gross income (£10.5m) — EEE 3% 68% By floor area (683k sq ft) 7%. T %o 77% Capital & Counties Properties PLC 2011 Annual Results Page no. 37 capitalandcounties.com
Slide 38: Taxation
Taxation Summary © Tax on income + 20% underlying tax rate in 2011 (corporation tax rate 26% to reduce to 23% by 2014) « Lower rate is due to mainly to capital allowances « Expected medium-term underlying tax rate between 20 to 23% on underlying earnings © Tax on capital gains Pre-May 2012 (i.e. wit
Slide 39: Notes on figures
• • • • • • • • • • • • • • All figures relate to period ending 31 December 2011. All figures represent Capco’s share of value (but 100% of space)
Capital & Counties Properties — FY2011 Earnings Presentation on 6ix