Londonmetric Property Plc · LSE:LMP
Londonmetric Property — FY2020 Earnings Presentation
32 slides from Londonmetric Property's earnings presentation, June 2020
Slide 1: Full Year Results
FULL YEAR RESULTS Year Ended 31 March 2020 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Key FY Highlights
Key FY Highlights Sector calls and income focus continue to deliver portfolio outperformance • Structural shifts accelerating Portfolio – Aligned to winning sectors - Distribution 70%, long income 24% £2.3bn1 From £1.8bn in March 19 • Urban logistics exposure grown through investment activity Urban
Slide 4: Financial Highlights
Financial Highlights Full Year to 31 March 2020 March 2020 March 2019 Change Contracted Rent Net Rental Income £115.9m £93.8m +24% £123.3m +37% from £89.7m in 2019 EPRA Earnings £74.5m £61.0m +22% Earnings Yield1 EPRA Earnings (pps) 9.3p 8.8p +6% 5.5% 2019: 5.3% Dividend (pps) 8.3p 8.2p +1% NAV (exc
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 31 March 31 March Change 2020 2019 Net rental income £115.9m £93.8m Administrative costs £(15.9)m £(13.7)m Net Finance costs £(26.1)m £(20.2)m EPRA Earnings £74.5m £61.0m +22.1% EPRA Earnings (pps) 9.3p 8.8p +5.6% Dividend (pps) 8.3p 8.2p +1.2% Reported (Loss)/ Profit2 £(5.7)m £119
Slide 7: Balance Sheet
Balance Sheet1 31 March 2020 31 March 2019 Property portfolio2 £2,352.2m £1,846.2m Cash £86.1m £24.1m Debt £(974.8)m £(626.2)m Fair value of derivatives £(5.4)m £(1.9)m Other net liabilities £(26.3)m £(25.4)m IFRS Net Assets £1,431.8m £1,216.8m EPRA Adjustments £5.4m £1.9m EPRA Net assets £1,437.2m
Slide 8: Financing
Financing Debt Metrics1 31 March 2020 31 March 2019 Post Year End Total facilities £1,105.9m £999.7m Marginal cost of debt Gross Debt £974.8m £626.2m 1.5% Movement in LIBOR Cash £86.1m £24.1m Average cost of finance 2.9% 3.1% Swap Breakage Average maturity 4.7 years 6.4 years 2 year payback £350m of
Slide 9: Income Progression
Income Progression Warrington 140.0 130.0 3.2 5.9 120.0 7.4 1.8 (£m) 110.0 130.6 127.4 100.0 123.3 121.5 121.5 115.9 115.9 90.0 80.0 Net rental Additional Contracted PPE Investment Letting of Pro income annualised income portfolio of placing near term Forma Mar 20 Rent Mar 20 activity1 proceeds deve
Slide 10: Delivering Long Term Shareholder Returns
Delivering Long Term Shareholder Returns Our key focus is to drive earnings and distribute Net Rental Earnings Total Property Return Total Shareholder Return Income (£m) (pps) (rebased to 100)2 (rebased to 100)1,2 140 10.0 220 300 Dividend 120 9.0 200 Share price 260 100 8.0 180 220 80 7.0 160 60 6.
Slide 11: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 12: Our Portfolio
Our Portfolio Aligned to structurally supported sectors Value1 NIY2 EY2 WAULT CVg3 TPR3 31 March 2020 (£m) (%) (%) (Years) (12m) (12m) Urban4 35.4% Urban 831 4.8 5.4 7.8 +4% +8% Regional 458 4.3 5.0 13.9 +6% +11% 69.8% Long Mega 350 4.3 4.5 14.5 +2% +7% Distribution Income 24.0% Long Income 563 5.6
Slide 13: Our Portfolio: Aligned to structurally supported sectors
Our Portfolio1 Aligned to structurally supported sectors, let on long leases to a diverse occupier base Urban Logistics – 35.4% Regional & Mega Distribution – 34.4% Long Income – 24.0% • 98 assets, 6.5m sq ft • 17 assets, 6.1m sq ft • 113 assets, 2.8m sq ft • £41.9m rent (£6.50 psf) • £35.4m rent (£
Slide 14: Investment Activity
Investment Activity1 12 months activity to 31 March 2020 ACQUISITIONS URBAN LOGISTICS REGIONAL DISTRIBUTION LONG INCOME Regional 8% Long Income 26% £614m Urban (5.6% NIY) 53% Other £49m acquired £327m acquired £162m acquired 13% • South East & Birmingham • WAULT 18 yrs, 100% RPI uplift • WAULT 16 yr
Slide 15: A&J Mucklow
A&J Mucklow Proactive asset management approach delivering strong operational and financial performance 97% occupancy Urban logistics & long income Operational 95% rent collection 87% performance of £461m portfolio 57 occupier initiatives, delivering £1.1m p.a. additional rent 2 offices sold, 7% upl
Slide 16: Portfolio Management
Portfolio Management 130 deals1 delivering £5.2m p.a. additional rent • 89 lettings & regears, WAULT of 11.6 years • 41 rent reviews, 12% ahead of previous passing2 • 3.8% LFL income growth3 • 0.9m sq ft of developments4 – 78% BREEAM Very Good ― Completed: 436k sq ft (including Phase 1 at Bedford &
Slide 17: Post Year End Portfolio Activity
Post Year End Portfolio Activity Continued activity and portfolio resilience against the uncertain COVID-19 backdrop 93% rent – collected (distribution 100%, long income 87%) Rent forgiven Rent 4% rent – extended WAULT +4 years, 8 months rent collection 2% rent – deferred, further 1% forgiven c.1% C
Slide 18: Outlook
LONDONMETRIC lay PROPERTY PLC OUTLOOK
Slide 19: Market Outlook
Market Outlook UK online sales penetration1 COVID-19 accelerating structural trends with flight to quality 35% 30.0% 30% • Structural shifts & trends accelerating 25% 19.0% 20% – Rapid changes in how we work, shop & socialise 15% – Temporary changes likely to be permanent 10% 7.0% – Trends expected
Slide 20: Looking Forward
Looking Forward Positioning the portfolio for the long term COVID triggering • Slowly assessing the likely effects and severity of impact from the pandemic’s exogenous shock lasting behavioural • History will show post-pandemic world permanently altered changes • Trajectory and speed of recovery rem
Slide 21: Appendices
LONDONMETRIC lay PROPERTY PLC APPENDICES
Slide 22: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Fixed Average Area (Share) Surplus/(Deficit) CVg3 Occupancy NIY1 (years) Rent Uplifts Rent As at 31 March 2020 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.8 349.6 3.5 1.0 2.4 100.0 4.3 14.5 14.5 16
Slide 23: Rental Income Profile
Rental Income Profile1 Delivering long term sustainable, diversified & growing income Unexpired Lease Terms (Av. 11.2 years) Income (Top 10)3 2020 2019 8.4% WAULT >20 yrs 0-3 yrs Primark 12% 7% 10.9% 11.2 years DFS 4.4% Only 7% of rent expiring within 3yrs 4.3% 16-20 yrs 15% 3.8% 4-10 yrs M&S Top 10
Slide 24: Distribution Assets
Distribution Assets Largest assets1 Occupier Annualised (by value) rent (£m) Islip 1 Primark 5.7 Dagenham 2 Eddie Stobart 4.1 North East & Yorkshire Thrapston 3 Primark 4.3 6 4% North West 8 Bedford 4 Argos 4.1 6% Croydon 5 Tesco 1.9 Warrington 6 Amazon 2.1 10 1 3 Reading 7 DHL 1.8 Midlands 39% 4 Ol
Slide 25: Long Income
Long Income 100% occupied with 57% of income subject to contractual uplifts Convenience, Roadside & Leisure - 45% NNN Retail - 31% Trade, DIY & Other - 24% • Occupancy 100% • Occupancy 100% • Occupancy 100% • 49 assets, 0.8m sq ft • 24 assets, 0.9m sq ft • 40 assets, 1.0m sq ft • £12.7m rent (£16.20
Slide 26: Total Property Returns – LondonMetric
Total Property Returns – LondonMetric 180 Regional (+75%) Urban (+73%) 170 160 150 Mega (+45%) LMP All Property (+43%) 140 Long Income (+37%) 130 120 MSCI All Prop (+20%)2 110 100 H2 FY17 H1 FY18 H2 FY18 H1 FY19 H2 FY19 H1 FY20 H2 FY20 1. Source: MSCI to 31 March 2020 26 2. Comparison MSCI benchmark
Slide 27: Responsible Business / ESG
Responsible Business / ESG Responsible business report available at: https://www.londonmetric.com/our-company/responsible-business • Continue to score well on ESG benchmarks. Increasing focus on TCFD1 and resilient related matters • Energy consumption fallen 92% since 2015 due to change in asset mix
Slide 28: Developments Summary
Developments Summary Incurred to date Sq ft PC1 BREEAM Rent/ YOC Total Up To FY FY Comment 000 uplift (%) cost FY19 20 21 £m £m Bedford (Phase 1) 188 Very Good 1.4 6.4 20 15 5 - 3 urban warehouses, 100% let Durham 58 n/a 0.8 5.4 14 7 7 - Long income forward fund let to Lidl and Range Tyseley (Phase
Slide 29: Distribution Developments
Distribution Developments Short cycle activity at attractive yields Bedford Tyseley Phase 1 Let 135k sq ft Let Phase 2 195k sq ft Let Phase 2b Phase 2a c350k sq ft Phase 1 – 188,000 sq ft Phase 1 – 135,000 sq ft • Rent: £1.4m • Anticipated rent: £1.0m • 100% let (3 units) • 51% let (8 units) • Yield
Slide 30: Acquisitions (FY 2020)
Acquisitions (FY 2020) Sector Value Yield WAULT (LM share) (years) £m NIY Reversion1 Expiry 1B Croydon Distribution 4.2 3.5% 6.0% 16.9 6.9 Dunstable Distribution 5.7 5.0% 5.6% 15.0 12.0 Bognor Regis (Wiley) Distribution 17.7 9.0% 9.6% 17.1 7.1 Croda funding Distribution 24.0 5.2% 5.6% 20.0 20.0 DFS
Slide 31: Disposals (FY 2020)
Disposals (FY 2020) Sector Value Yield WAULT (LM share) (years) £m % Expiry 1B Carwashes (IMOs) Long Income 4.0 5.5% 25.0 25.0 Llanelli (KFC) Long Income 0.7 5.7% 15.0 15.0 Cheltenham (Audi)1 Long Income 3.3 5.0% 13.4 13.4 Worcester Office 6.2 6.7% 6.5 6.5 Leicester Office 5.7 6.0% 9.5 9.5 Doncaster
Slide 32: Debt Facilities
Debt Facilities As at 31 March 2020 Lender Facility Drawn Maturity Expiry (£m) (£m) (years) Wholly-owned portfolio Unsecured RCF Syndicate 443.8 410.0 1.8 2021-22* Private Placement 2018 Syndicate 150.0 150.0 10.8 2029-34 Private Placement 2016 Syndicate 130.0 130.0 4.7 2023-28 Secured - Distributio