Workspace Group Plc · LSE:WKP
Workspace — FY2020 Earnings Presentation
39 slides from Workspace's earnings presentation, Jun 5, 2020
Slide 1: Full Year Results 2020
Full Year Results 2020 Investor & Analyst Presentation 5 June 2020 FULL YEAR RESULTS 2020 Investor and Analyst Presentation 5 June 2020
Slide 2: Agenda
Agenda 1. 2. 3. 4. 5. Introduction Financial review Outlook Questions Supplementary Graham Clemett, Dave Benson, Graham Clemett, information CEO CFO CEO 2 Investor and Analyst Presentation 5 June 2020
Slide 3: Introduction
INTRODUCTION Graham Clemett CEO Edinburgh House Vauxhall
Slide 4: Workspace
Introduction Workspace One of the leading providers of flexible office space in the London market – 30+ years’ operating experience – c.4m sq. ft. of flexible office space over c.60 locations – 100% property ownership – Strategic focus on long-term income growth – Scalable operating platform 4 Inves
Slide 5: Financial highlights
Introduction Financial highlights Strong trading performance Underpinned by financial strength Net rental income £122m +10% Property valuation £2,574m (0.3)% Trading profit after interest £81m +12% EPRA NAV per share £10.89 +0.3% Total dividend for the year 36.2p +10% Loan-to-value 21% (1)% Trading
Slide 6: Operating performance
Introduction Operating performance Operating platform driving growth Good like-for-like performance Enquiries per month 1,087 +4% Like-for-like occupancy 93.1% Viewings per month 675 +8% Like-for-like rent roll growth +2% Lettings per month 121 +18% Like-for-like rent per sq. ft. £43 Enquiries per m
Slide 7: Project activity
Introduction Project activity The Frames, Edinburgh Shoreditch House, Vauxhall Opened: Opened: September September 2018 2018 52,000 sq. ft. 65,000 sq. ft. Occupancy: Occupancy: 98% 100% Brickfields, Mare Street Hoxton Studios, Hackney Opened: June 2019 Opening: Shortly 57,000 sq. ft. 55,000 sq. ft.
Slide 8: Trend in customer enquiries
Introduction Trend in customer enquiries 8 Investor and Analyst Presentation 5 June 2020
Slide 9: Covid-19 update
Introduction Covid-19 update Actions taken Current situation – Customer enagagement on a – c.70% of cash collected, net of discounts one-to-one basis and deferrals in the quarter – c.75% of customers* benefitting from – Ongoing customer engagement 50% rent reduction – Tight focus on operating costs
Slide 10: Return to work measures
Introduction Return to work measures – Deep cleaning measures implemented at all centres – Extensive signage to ensure social distancing – One-way circulation systems throughout – Restrictions on use of communal space – Hand sanitisers installed – Limit on meeting room capacity – Restricted occupanc
Slide 11: Financial Review
FINANCIAL REVIEW Dave Benson CFO Canterbury Court, Kennington Park
Slide 12: Income statement
Financial review Income statement £m March 2020 March 2019 Change Net rental income 122.0 111.0 +10% Administrative expenses (17.7) (17.1) +4% Net finance costs (23.3) (21.5) +8% Trading profit after interest 81.0 72.4 +12% Change in fair value of investment properties (7.5) 60.8 Profit/(loss) on sa
Slide 13: Net rental income
Financial review Net rental income 13 Investor and Analyst Presentation 5 June 2020
Slide 14: Cash flow
Financial review Cash flow 14 Investor and Analyst Presentation 5 June 2020
Slide 15: Balance sheet
Financial review Balance sheet March 2020 March 2019 Investment property valuation 2,574 2,604 Net debt (541) (580) Other (35) (42) Net assets 1,998 1,982 EPRA NAV per share £10.89 £10.86 EPRA NRV per share* £11.92 £11.91 Loan to Value 21% 22% *EPRA NRV (Net Reinstatement Value) will replace current
Slide 16: Valuation
Financial review Valuation Underlying movement £m Valuation Full Year H2 H1 Like-for-like 1,540 (27) (54) 27 Completed projects 547 4 (11) 15 Current refurbishments 331 8 1 6 Current redevelopments 145 (2) (3) £(xx)m 2 £57m Held for sale/sold 11 9 0 9 Total 2,574 (8) (67) 59 Like-for-like ERV up sli
Slide 17: Debt
Financial review Debt March 2020 March 2019 Net debt £541m £580m Average interest cost 3.7% 3.7% Undrawn revolver facilities and cash £166m £127m Marginal cost (Undrawn facilities) over LIBOR 1.5% 1.5% Average period to maturity 4.5 years 5.6 years Maturity profile Covenants March 2020 Interest cove
Slide 18: Q1 update
Financial review Q1 update Customer support – 50% rent reduction given to c.75% of customers (by rent) until end June – 15% of discounted rent deferred on case by case basis Cash collection – c.70% of rents due (after discounts and deferrals) collected – Good track record on collections with £34m re
Slide 19: FY21 outlook
Financial review FY21 outlook – Q1 impacted by rent discounts – Potential near-term impact from customer churn and downsizing – Focus on retaining customers and capturing new demand – Flexible capex schedule – Strong balance sheet 19 Investor and Analyst Presentation 5 June 2020
Slide 20: Outlook
OUTLOOK Graham Clemett CEO China Works Vauxhall
Slide 21: Proven business model
Outlook Proven business model 21 Investor and Analyst Presentation 5 June 2020
Slide 22: Flexibility
Outlook Flexibility 22 Investor and Analyst Presentation 5 June 2020
Slide 23: Property portfolio
Outlook Property portfolio Like-for-like Refurbishments Redevelopments 23
Slide 24: Project pipeline
Outlook Project pipeline 24 Investor and Analyst Presentation 5 June 2020
Slide 25: Brand
Outlook Brand Our purpose is to give businesses the freedom to grow: drives a clear and puts flexibility at the empowers our people ensures we do the focused strategy + heart of our business + to think differently + right thing by all our and customer offer stakeholders We have a strong, recognised
Slide 26: Doing the Right Thing
Outlook Doing the Right Thing 26 Investor and Analyst Presentation 5 June 2020
Slide 27: An experienced team
Outlook An experienced team 27 Investor and Analyst Presentation 5 June 2020
Slide 28: Summary
Outlook Summary – Strong trading performance over last year – Expect subdued level of operational performance in the short term – Structural shift in the office market towards flexibility will now accelerate more broadly – Experienced team with deep expertise – Well placed to navigate the challenges
Slide 29: Questions
QUESTIONS The Frames Shoreditch 29
Slide 30: Supplementary Information
SUPPLEMENTARY INFORMATION The Shepherds Building Shepherd’s Bush
Slide 31: Refurbishment projects (1/2)
Refurbishment projects (1/2) Actual/ Unaffected Upgraded Estimated Estimated Estimated Cost to area area New Space ERV Rent at 90% March 2020 At March 2020 Valuation cost Complete Completion (sq. ft.) (sq. ft.) (sq. ft.) (Average) occupancy* Rent Roll Completed Cannon Wharf £9m £1m – Jul 2017 – 32,6
Slide 32: Refurbishment projects (2/2)
Refurbishment projects (2/2) Actual/ Unaffected Upgraded Estimated Estimated Estimated Cost to Estimated area area New Space ERV Rent at 90% March 2020 At March 2020 Valuation cost Complete Completion (sq. ft.) (sq. ft.) (sq. ft.) (Average) occupancy* Rent Roll Underway Wenlock Studios £20m £1m £1m
Slide 33: Redevelopment projects
Redevelopment projects Commercial space returned Other proceeds Commercial Space March 2020 estimated Residential New Space Estimated Estimated Cash Cash to Overage to At March 2020 Development partner Valuation Rent Roll completion units no. (sq. ft.) ERV Rent* received come come Completed The Fuel
Slide 34: Diversified customer base
Diversified customer base 3% 4% 4% 16 % 7% 7% 16 % 7% 11% 8% 9% 11% By rent as at 1 May 2020 34 Investor and Analyst Presentation 5 June 2020
Slide 35: Distinctive, character properties
Distinctive, character properties 35 Investor and Analyst Presentation 5 June 2020
Slide 36: Property portfolio
Property portfolio Like-for-like Refurbishments Redevelopments 36
Slide 37: Property portfolio
Property portfolio Like-for-like Map Ref Property Name Net Lettable Area Net Rent Roll Map Ref Property Name Net Lettable Area Net Rent Roll (sq. ft.) (£) (sq. ft.) (£) 1 Archer Street Studios 14,984 1,105,571 21 The Biscuit Factory (Cocoa Studios) 39,298 1,133,082 2 Bow Enterprise Park (part) 14,63
Slide 38: Property portfolio
Property portfolio Refurbishments Redevelopments Map Ref Property Name Net Lettable Area Net Rent Roll Map Ref Property Name Net Lettable Area Net Rent Roll (sq. ft.) (£) (sq. ft.) (£) 30 Barley Mow Centre 77,337 1,828,136 51 Bow Office Exchange 0 0 31 Brickfields 56,755 1,301,251 35 Chocolate Facto
Slide 39: Disclaimer
Disclaimer The information in this document may include forward-looking statements, As a result, you are cautioned not to place reliance on such forward- which are based on current expectations and projections about future events. looking statements as a prediction of actual results or otherwise. Th