Palace Capital Plc · LSE:PCA
Palace Capital — H1 2015/16 Earnings Presentation
19 slides from Palace Capital's earnings presentation, November 2015
Slide 1: Interim results
Interim results Investor presentation – November 2015 Chief Executive Neil Sinclair Finance Director Stephen Silvester Executive Director Richard Starr palacecapitalplc.com
Slide 2: Contents
Contents Introduction to Palace Capital 2 Interim Financial Results 4 Portfolio Update 10 Market Outlook 17 Summary 18 1 palacecapitalplc.com
Slide 3: Introduction to Palace Capital
Introduction to Palace Capital Our strategy is to invest in commercial properties in key regional UK towns and cities, through astute Enhance Income Returns & corporate and direct property acquisitions. Opportunistic Reduce Void Costs Strategic Capex Acquisitions & Development We look for opportunit
Slide 4: Growth Story
Growth Story AUG 15 JUNE 15 APR 15 + £3.9m 46-54 High Street, Sutton Funded from cash AUG 14 + £20.7m Sol Central, Northampton acquisition £20m equity fundraising at 360p OCT + £10m Bank House, King Portfolio grown 13 Street, Leeds acquisition Funded from cash to £140m + £32m PIH portfolio acquisiti
Slide 5: Financial Highlights
Financial Highlights HY 15/16 HY 14/15 FY 15 Profit After Tax £7.2m £8.4m £14.0m Net Assets £104.9m £75.0m £80.0m EPRA NAV per Share 404p 371p 393p EPRA Earnings £5.1m £1.8m £4.7m Adjusted Earnings £2.1m £1.8m £4.8m Valuation movement & surrender premiums £5.4m £7.3m £9.8m Basic EPS 31p 60p 82p EPRA
Slide 6: Financial Results
Financial Results HY 15/16 HY 14/15 FY 15 £000’s £000’s £000’s Net Rental Income 7,484 2,963 7,437 Admin Costs (1,035) (591) (1,439) Finance Costs (983) (589) (1,398) Tax charge (396) (10) 107 EPRA Earnings 5,070 1,773 4,707 Revaluation gains 2,308 7,292 9,769 Non-recurring net costs (205) (639) (46
Slide 7: Balance Sheet
Balance Sheet 30 Sept 2015 31 March 2015 £000’s £000’s Property Portfolio 140,350 102,988 Cash 18,689 12,279 Borrowings (50,528) (35,807) Other Net Assets / (Liabilities) (3,573) 556 Net Assets 104,938 80,016 EPRA Net Assets 105,047 80,125 EPRA NAV per Share 404p 393p Basic NAV per Share 407p 396p 6
Slide 8: Movement in EPRA NAV per ordinary share
Movement in EPRA NAV per ordinary share 420.0 410.0 8.9 7.0 1.8 400.0 12.8 Pence 390.0 10.4 9.1 380.0 404.2 392.6 370.0 382.2 360.0 EPRA NAV Share issue EPRA NAV Adjusted Surrender Revaluation Dividends Purchase costs EPRA NAV Mar-15 discount Post issue earnings premium Sep-15 7 palacecapitalplc.com
Slide 9: Debt Summary
Debt Summary Debt Facility Debt Drawn Debt Portfolio/Asset Lender Years (£m) (£m) Maturity Hockenhull Portfolio Close 1.2 1.2 2.0 30/09/2017 Signal Portfolio Nationwide 20.0 19.6 5.0 30/09/2020 PIH Portfolio NatWest 14.5 14.5 3.9 26/08/2019 Leeds – Bank House Lloyds 4.4 4.4 3.6 28/04/2020 Northampto
Slide 10: Portfolio Highlights
Portfolio Highlights March 2015 September 2015 PORTFOLIO VALUATION £103m £140m CONTRACTUAL RENTAL INCOME £8.6m £11.6m OCCUPANCY 90% 91% WAULT 4.5 years 5.4 years 9 palacecapitalplc.com
Slide 11: Property Portfolio
Property Portfolio York Leeds Sheffield Stockport Stoke-on-Trent Office – 47% Coventry Northampton Birmingham Industrial – 24% Leamington Spa Milton Keynes Leisure – 14% Dartford Retail – 9% Bristol Newbury East Grinstead Retail Warehouses – 6% Salisbury Southampton Brighton Exeter Plymouth 10 palac
Slide 12: Recent Acquisitions
Recent Acquisitions Sol Central, Northampton • Purchased for £20.7m in July 2015 • 189,298 sq. ft. • Key tenants: Vue Cinema, Accor Hotels, Marston’s Group • NIY: 8.9% • WAULT: 12.19 years • Progress: Gala surrender of lease for £3.0m. £0.8m of dilapidations. Architect appointed for reconfiguration.
Slide 13: Recent Acquisitions
Recent Acquisitions Bank House, King Street, Leeds • Purchased for £10.0m in April 2015 • 88,036 sq. ft. • Key tenants: Bank of England, Walker Morris Solicitors • NIY: 8.1% • WAULT: 2.4 years • Occupancy: 75% • Progress: Minor refurbishment works to vacant space. Currently being marketed to let. 12
Slide 14: Recent Acquisitions
Recent Acquisitions 46-54 High Street, Sutton • Purchased for £3.9m in August 2015. • 21,056 sq. ft. • Key tenants: The Local Authority, Foxtons • NIY: 8.0% • WAULT: 6.5 years • Occupancy:100% 13 palacecapitalplc.com
Slide 15: Operational Highlights
Operational Highlights Asset Management/Development • Planning application submitted to the City of York Council for 82 apartments and 37,000 sq Investment ft of offices at Hudson House, York • Secured surrender of a lease held by Gala Acquisitions £35 million Casinos at Sol Central, Northampton,
Slide 16: Portfolio Update
Portfolio Update A&B, BRIDGE RETAIL PARK, EAST GRINSTEAD WINCHESTER ST, SALISBURY HUDSON HOUSE, YORK IMPERIAL HOUSE, LEAMINGTON SPA SANDRINGHAM HOUSE, HARLOW 2-4 PITFIELD KILN FARM, MILTON KEYNES 15 palacecapitalplc.com
Slide 17: Asset Management
Asset Management NORTHAMPTON SOL CENTRAL LEEDS – BANK HOUSE DARTFORD MALDON Architect instructed on repositioning Convert vacant offices to 14 residential Potential for refurbishment or sale to Extended lease to Bank of England. Vacant scheme following surrender of lease from flats - underway owner
Slide 18: Market Outlook
Market Outlook Positive Outlook We consider total returns from UK commercial property in the regions will continue to be generated from a combination of capital growth Palace Positioning and income rental growth. With the backdrop of a real estate market where there • Demand for space in good qualit
Slide 19: Summary
Summary Palace Capital has made excellent progress in the past 6 months: • PBT of £7.6m in the 6 months • EPRA NAV per share growth of 5% to 404 pence (since June 2015 equity raise) • £20m equity raised in the period and £35.8m new debt facilities • 3 acquisitions completed this period totalling £35