Shaftesbury Capital Plc · LSE:SHC
Shaftesbury Capital — Capital & Counties Properties — FY2012 Earnings Presentation
39 slides from Shaftesbury Capital's earnings presentation, Feb 28, 2013
Slide 1: 2012 Annual Results
Cdapco Capital & Counties Properties PLC 2012 Annual Results 28 February 207, Na www.capitalandeou tia
Slide 2: Important Notices
Important Notices This presentation includes statements that are forwarHlooking in nature. Forwardlooking 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 lan Hawksworth * Financial Review Soumen Das x Business Review lan Hawksworth & Gary Yardley x Q&A 3 2012 ANNUAL RESULTS PRESENTATION cd pce
Slide 4: Capco
Capco * Focus on prime central London TOTAL PROPERTY VALUE £1.7 BILLION * Total Return 62.7% since demerger West End West London £1,000m £721m — EPRA Adjusted Net Assets +96% to £1.6 — Total Shareholder Return 139.8% * Sound capital structure and conservative 10% LTV 4 2012 ANNUAL RESULTS PRESENTATI
Slide 5: 2012 Highlights
2012 Highlights Positive Momentum x NAV +22% to 203 pence per share, total return 23% * Valuation +16.7% i — H2: Capital growth +9.8% * £401 million cash and available facilities — £70 million revolving credit facility secured — £320 million of disposals * Covent Garden ERV target raised to £60 - 65
Slide 6: 2012 Financial review
capce 2012 Financial review Soumen Das capco
Slide 7: Underlying earnings
Underlying earnings Highlights Dec-12 Dec-11 Var £m £m £m Net rental income 65.3 69.0 (3.7) Admin costs (26.1) (22.2) (3.9) Net finance costs (22.8) (34.8) 12.0 Tax on underlying earnings (3.9) (2.4) (1.5) Underlying earnings 12.5 9.6 2.9 Underlying earnings per share 1.8p 1.A4p 0.4p Full year divid
Slide 8: Net rental income
Net rental income LfL +1.8% LL 1.8% £2.4m £0.2m TC... eee £1.6m Fe £4.7m Covent Garden EC&O GcP Non like-forlike «x EC&O Venues EBITDA £14 million down 15% ny 8 2012 ANNUAL RESULTS PRESENTATION ca pce
Slide 9: Balance sheet
Balance sheet Restated Dec-12 Dec-11 Var £m £m £m Portfolio value 1,671 1,617 54 Investments 4 20 (16) Net debt (164) (464) 300 Other assets and liabilities (33) (65) 32 NAV 1,478 1,108 370 EPRA adjusted diluted NAV 1,553 1,153 400 Number of shares in issue 752.7m 683.9m 68.8m * — Contingent tax lia
Slide 10: EPRA adjusted diluted net assets per share
EPRA adjusted diluted net assets per share NAV +22% to 203p 210p 4 3.5p a ee 33.5; 200p - | 1.5p 0.5p 0.3p 0.3p 190p + 180p 4 170p + 160p 167p 150p 4 1 r 1 r 1 r 1 r Dec-11 Valuation & sale Underlying Capital raise Dividend Tax Exceptional Other Dec-12 of property profits finance items * Diluted EPR
Slide 11: Debt management
Debt management * Cash and available facilities of £401 million at December 2012 * Repayment of Earls Court facility * £70 million secured revolving credit facility Net debt £163.5m £463.7m £100m -£100m -£300m -£500m -£700m Dec-12 Dec-11 LTV 10% 29% Group interest cover 172% 134% Cash and available
Slide 12: Cash utilisation
Cash utilisation Substantial liquidity from internal resources £700m £600m £500m £400m £300m £200m + £320.0m £145.0m £401.3m £201.4m £4.8m Cash £184.5m £89.6m Dec-11 Operational Capital raise Sale Acquisitions Capex Dividend Other Dec-12 Net Dec-12 cash flow of property Pre financing borrowings & in
Slide 13: Operating review
capce Operating review lan Hawksworth and Gary Yardley
Slide 14: Valuation
Valuation Strong 2012 valuation +16.7% «1 Market value Market value Value ERV Initial ~~ Equivalent Dec-12 Dec-11 change 7 change*® yield yield £m £m Covent Garden 952 808 7.2% 42% 3.8% 5.1% Earls Court 336 195 57.6% Seagrave Road 104 116 61.5% Olympia 126 121 (4.1]% Other * 203 384 9.8% Total Prope
Slide 15: Covent Garden
Covent Garden Strategy * Grow ERV to £60- 65 million by end of 2015 x Drive passing rent » Expand the contemporary luxury offer * Transform the food and dining » Extend the residential portfolio * Grow the estate boundaries through tactical acquisitions * Selective development — Kings Court Value up
Slide 16: Covent Garden: Estate performance 2012
Covent Garden Estate performance 2012 * Value £952 million +7.2% wy * ERV £51.9 million +4.2% uy * NRI£32.1 million +9.4% wy * £89 million of acquisitions x Adjusted occupancy 99% « Footfall robust at circa 45 million — 89% ABC1s (UK visitors) * 57 leasing transactions completed = — Rental value £8.
Slide 17: Changing the retail and F&B line up
Covent Garden Changing the retail and F&B line up onina > G-SHOCK STICKSNSUSHI laa mmowane SHAKE 5 SHACK’ Jo MALone 7 HA ve CHANEL eALTEAZ AR _ MEAT HACKETT market LONDON San d ro Aesop. 7 hind Sik fol a Nrachi TWeENTY8TWeLVe QE a 17 2012 ANNUAL RESULTS PRESENTATION ca pce
Slide 18: Key letting transactions
Covent Garden Key letting transactions Aesop Balthazar * Contemporary * London edition of luxury brand new to original New York brasserie * ROCE 43% Covent Garden * 115% above previous passing rent Shake Shack ° UK first for this modern US burger offering Hackett * New concept store on King Street *
Slide 19: Gross income to ERV
Covent Garden Gross income to ERV £60m 4 £50m + £3.0m £0.7m _ 106m 240m - a £30m + £20m | £10m + T T T T T T T 2012 Gross Rentfrees / Under Income Vacancies Development Underrented Dec-12 ERV income Stepped rent — contract/ _—_ contracted & offer under offer Note: Gross income = passing rent + nomle
Slide 20: Potential for future growth
Covent Garden Potential for future growth * Covent Garden significantly below ITZA - December 2012 CBRE London comparable streets * Proactive asset management has increased rents — King Street - 60% ITZA growth# — Market Building — 68% ITZA growtht * Based on 30 ft Zone A, includes Bond St, Oxford S
Slide 21: Zone A rents across Covent Garden
Covent Garden Zone A rents across Covent Garden as at December 2009 21 2012 ANNUAL RESULTS PRESENTATION cd pce
Slide 22: Increased ERV target to £60-65 million by 2015
Covent Garden Increased ERV target to £60 - £65 million by 2015 December 2012 Zone A Maj wi e600 - £900 [| wil £450 - e600 H WM £300 - £450 1 a £200 - £300 [| @) £0-€200 a E57] Acquisitions Since Dec 2011 : ~ O Kings Court 22 2012 ANNUAL RESULTS PRESENTATION cd pce
Slide 23: Covent Garden Residential
Covent Garden Residential * The Henrietta (34 Henrietta Street] — 4 luxury apartments over 8k sq ft sold achieving a step change in pricing: circa £2,250 psf — 57% profit on cost x The Russell (Russell Chambers) — 5 luxury apartments over 10k sq ft — Due to launch in Spring 2013 * The Beecham (1a He
Slide 24: The Great Capital Partnership
The Great Capital Partnership Creating value and recycling liquidity > £218 million disposals in 2012 (Capco share) ~ 9% above December 2011 valuation x One remaining asset — 18% above December 2011 valuation > Equity multiple 1.7x* IRR circa 30%" > * Assumes sale of remaining asset on 31 December 2
Slide 25: China
China Investment value £3.6 million * Last asset exchanged in H2 2012 China - Value uplift and realisation * Remaining capital due to be returned 9 *8" } in 2013 as retentions are released =... * Equity multiple — 1.6x* £40m 4 * IRR circa 31%" £20m + 0 | Ta, Dec09 Valuation gain Cash realised Dec-12
Slide 26: Earls Court and Olympia
Earls Court and Olympia Largest consented masterplan in London we », Ging . Brompton Cemetery 26 2012 ANNUAL RESULTS PRESENTATION
Slide 27: Earls Court and Olympia
Earls Court and Olympia Largest consented masterplan in London Earls Court Village High Street, CGI 27 2012 ANNUAL RESULTS PRESENTATION cd pce
Slide 28: The Earls Court Masterplan
The Earls Court Masterplan Progress Wz MPL Ze * Planning a\e ATI ~ Detailed consent for Seagrave Road : ~ LBHF resolution to grant consent for EC masterplan — RBKC resolution to grant consent for EC masterplan * Land assembly ~ Seagrave Road JV completed — CLSA with LBHF signed — | 28 2012 ANNUAL RE
Slide 29: Earls Court and Olympia Valuations
Earls Court and Olympia Valuations Seagrave Olympia Empress Earls Court g ymp p Other | Total Road London State Ownership 100% 50% 100% 50% 100% yore }2 £336m £104m £126m £110m £45m £721 ‘aluation Valuation 57.6% 61.5% (4.1%) 7.3% 8.1% 30.3% Uplift (.f) * Earls Court land * JV focusing on * 2012 EBI
Slide 30: Earls Court land ownership
– – – – – – – – Earls Court land ownership –
Slide 31: Seagrave Road
Seagrave Road To be launched as Lillie Square * Joint Venture agreement with KFI completed x Valuation £104 million as at Dec 2012 +61.5% (LFL, Capco share 50%) * Target launch of scheme within 12 months * Enhancements to existing scheme to be submitted to LBHF * Land assembly to extend northern sit
Slide 32: Outlook
Outlook Well positioned for growth * Covent Garden ~ Further ERV growth, letting activity anticipated and launch of The Russell ~ Larger interventions — Kings Court * Earls Court ~ Finalise land assembly ~ Submit detailed planning application for Earls Court Village ~ Consider opportunities to unloc
Slide 33: Q&A
Slide 34: Appendices
capco Appendices x Financial covenants x Covent Garden * Earls Court Masterplan * Taxation 34 2012 ANNUAL RESULTS PRESENTATION capco
Slide 35: Financial Covenants
Financial Covenants Debt' Test Actual Interest Interest Maturity Facility £m LTV Cover LTV Cover 2013 Empress State 66 n/a 120% n/a 166% 2013 GCP 5 70% 120% 10% 1436% 2016 Covent Garden 158 70% 130% 34% 248% 2017 Covent Garden 112 70% 120% 45% 170% 2017 Covent Garden RCF 65% 130% 483% ‘As at 31 Janu
Slide 36: Covent Garden Zoning Plan
Covent Garden Zoning Plan * Stylish mid-market JY \_ 2¢ x Boutique * Contemporary luxury * Outdoor specialists * Independents, specialists and casual dining Food and dining * Leisure 36 2012 ANNUAL RESULTS PRESENTATION
Slide 37: Covent Garden properties and lettable units
Covent Garden 62 properties and 380 lettable units LEASE EXPIRY PROFILE (WALE 7.3 years) @ 2013 © 2016 @ 2014 @ 2017+ @ 2015 PORTFOLIO BY VALUE (£952m) @ Retail © Leisure @ Offices © FB @ Residential ANNUAL GROSS INCOME (£39.4m) @ Retail @ Offices @ Residential BY FLOOR AREA (898,000 sq ft) © Leisur
Slide 38: The Earls Court Masterplan
The Earls Court Masterplan “UK’s most valuable planning application” * Outline applications for Earls Court Opportunity Area (ECOA) submitted in June 2011 — 10.1 million sq ft of space, 7,500 homes — 12,000 new long term jobs * Resolution to grant consent from LBHF and RBKC in 2012 ECOA Masterplan -
Slide 39: Taxation
Taxation Summary * Tax on income — 24% underlying tax rate in 2012 (in line with standard UK corporation tax rate of 24% in 2012) — Expected mediumterm underlying tax rate to remain in line with standard UK corporation tax rate (23% in 2013 and 22% in 2014) * Tax on capital gains — On7 May 2012 prop
Capital & Counties Properties — FY2012 Earnings Presentation on 6ix