Workspace Group Plc · LSE:WKP
Workspace — FY2022/23 Earnings Presentation
53 slides from Workspace's earnings presentation, May 25, 2023
Slide 1: Full Year Results 2022/23: Investor & Analyst Presentation
HOME TO LONDON’S BRIGHTEST BUSINESSES Workspace Group PLC Full Year Results 2022/23: Investor & Analyst Presentation 25 May 2023
Slide 2: Agenda
Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix 2 Full Year Results 2022/23 Agenda 01 Overview Graham Clemett, CEO 02 Financial Review Dave Benson, CFO 03 Operating Platform Leo Shapland, Head of Portfolio Management 04 Summary Graham Clemett, CEO Kennington Park, O
Slide 3: Overview
3 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Overview Graham Clemett, CEO Mirror Works, Stratford
Slide 4: The Workspace Model
4 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 The Workspace Model BRICKFIELDS, LEATHER MARKET, CLERKENWELL WORKSHOPS, FUEL TANK, HOXTON LONDON BRIDGE CLERKENWELL DEPTFORD PALL MALL DEPOSIT, PILL BOX, LADBROKE GROVE LONDON’S LEADING PROV
Slide 5: Performance snapshot
5 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Performance snapshot STRONG TRADING RESULT RESILIENT VALUATION VALUE-ADD PROJECT ACTIVITY GOOD PROGRESS ON PATHWAY TO NET ZERO CAPITAL RECYCLING ONGOING Barley Mow, Chiswick
Slide 6: Underpinned by high levels of customer demand
6 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Underpinned by high levels of customer demand AVERAGE MONTHLY ENQUIRIES AVERAGE MONTHLY LETTINGS 1200 160 138 947 957 140 127 1000 935 932 125 117 114 831 120 108 110 780 106 800 757 724 100
Slide 7: Demand across a broad range of sectors and locations
7 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Demand across a broad range of sectors and locations VIDEO PRODUCTION FASHION STYLIST WESTBOURNE STUDIOS, CHOCOLATE FACTORY, INFORMATION, LADBROKE GROVE WOOD GREEN COMMUNICATION & 9% TECHNOL
Slide 8: With a significant market opportunity
8 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 With a significant market opportunity LONDON’S WORKING POPULATION1 SPREAD OF TARGET SMEs ACROSS LONDON2 1.2m Target population 5.5m 25% London’s working 15% population 17% 26% 138,000 17% TA
Slide 9: Attracted by our distinctive flexible offer
9 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Attracted by our distinctive flexible offer HIGH FLEXIBILITY THE WORKSPACE OFFER TRADITIONAL OFFER Large floor plates Unfurnished USE OF SPACE LOW FLEXIBILITY TURN-KEY OFFER SERVICED OFFER L
Slide 10: Financial Review
10 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Financial Review Dave Benson, CFO Metal Box Factory, Bankside
Slide 11: Strong trading performance, resilient valuation
11 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Strong trading performance, resilient valuation STRONG TRADING PERFORMANCE FINANCIAL STRENGTH Net rental income £116.6m +34% Property valuation £2,741m -3%1 Trading profit after interest £6
Slide 12: Income statement
12 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Income statement £m Mar 23 Mar 22 Change Net rental income 116.6 86.7 +34% Administrative expenses (21.5) (19.3) +11% Net finance costs (34.4) (20.5) +68% Trading profit after interest 60.7
Slide 13: Net rental income
13 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Net rental income £m Mar 23 Mar 22 Change Underlying rental income 110.7 97.9 +13% Unrecovered service charge costs (4.0) (4.4) -9% Empty rates and other non-recoverable costs (8.3) (10.4)
Slide 14: Administrative expenses
14 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Administrative expenses £m Mar 23 Mar 22 Change Underlying administrative expenses 18.0 17.7 +2% McKay acquisition 2.1 - Share-based costs 1.4 1.6 -13% Total administrative expenses 21.5 19
Slide 15: Balance sheet
15 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Balance sheet £m Mar 23 Mar 22 Investment property valuation 2,741 2,402 Net debt (902) (558) Other (52) (44) Net assets 1,787 1,800 EPRA NTA per share £9.27 £9.88 (£) EPRA NTA per share mo
Slide 16: Investment property
16 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Investment property (£m) 3,000 434 2,741 -60 2,500 8 2,402 56 -99 2,000 1,500 1,000 500 0 Mar 22 Revaluation H1 Revaluation H2 Capital Expenditure Acquisitions Disposals Mar 23
Slide 17: Resilient valuation
17 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Resilient valuation 31 Mar 23 Movement in year Valuation Cap. Val. Valuation1 Valuation1 Equivalent Yield ERV £m Initial Yield Equivalent Yield £psf £m % bps £psf Like-for-like 1,887 4.7% 6
Slide 18: Net debt and cash flow
18 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Net debt and cash flow (£m) 0 -200 -400 70 -44 -558 -600 -60 -800 49 4 -902 -363 -1000 -1200 Opening net Cash from Dividend Capex Acquisitions Disposals Other Closing net debt operations de
Slide 19: Debt profile
19 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Debt profile Drawn Facility Amount Amount Average Proforma1 Mar 23 Mar 22 Proforma debt1 £m £m interest rate Maturity Floating rate bank facilities drawn £167m £249m - Fixed rate borrowings
Slide 20: Financial outlook 2023/24
20 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Financial outlook 2023/24 Good earnings momentum, income underpinned by opening rent roll Continued pricing growth and letting up of completed projects Underlying cost inflation but energy
Slide 21: Operating Platform
21 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Operating Platform Leo Shapland, Head of Portfolio Management The Leather Market, London Bridge
Slide 22: Operating Platform
22 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Operating Platform SCALABLE OPERATING PLATFORM BUILT AROUND OUR OUR OPERATING PLATFORM DELIVERS SIGNIFICANT BENEFITS CUSTOMER JOURNEY Customer contact and engagement Direct feedback Real ti
Slide 23: Brand & marketing
23 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Brand & marketing DEVELOPING A STRONG BRAND AROUND OUR DISTINCTIVE OFFER Multi-disciplinary approach to messaging our distinctive offering Agility to rapidly scale up and flex marketing eff
Slide 24: Enquiries, viewings & lettings
24 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Enquiries, viewings & lettings DIRECT CONTACT WITH CUSTOMER THROUGHOUT THEIR SEARCH Engagement with customer to understand and optimise search Real time feedback on customer demand and tren
Slide 25: Customer experience
25 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Customer experience DEEP FOCUS ON CUSTOMER EXPERIENCE ACROSS THE BUSINESS Customer service integral to our approach and success Direct interface with customers delivered across multiple tea
Slide 26: Renewals & moves within portfolio
26 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Renewals & moves within portfolio DIRECT INTERFACE WITH CUSTOMERS AND TRULY FLEXIBLE MODEL UNDERPINS RETENTION Continuation of constant, direct contact with customer Not reliant upon third
Slide 27: Building upgrades
27 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Building upgrades BUILDING TEAM OFFER NIMBLE RESPONSE AS CUSTOMERS MOVE OR DEMAND EVOLVES Insight into customer demand Agility to respond rapidly Ability to deliver projects at pace Rapid d
Slide 28: Building upgrade case studies
28 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Building upgrade case studies FULL FLOOR REFURBISHMENT, LEATHER MARKET, LONDON BRIDGE FULL FLOOR REFURBISHMENT, THE MILLE, BRENTFORD Refurb of full floor (2,800 sq. ft., 9 units, common par
Slide 29: Refurbishment & redevelopment
29 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment & redevelopment DEVELOPMENT TEAM DRIVING LONGER TERM INCOME GROWTH Visibility on demand and performance over life cycle of building Ownership gives ability to reposition asset
Slide 30: Refurbishment case studies
30 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment case studies MARE STREET, HACKNEY LEROY HOUSE, ISLINGTON £21m refurbishment and extension of former warehouse & light industrial 58k sq. ft. redevelopment and extension of Ler
Slide 31: Refurbishment & redevelopment pipeline
31 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment & redevelopment pipeline 1.3m sq. ft. pipeline – offering attractive, phased opportunity to grow income Havelock 250,000 Terrace Kennington Park (Phase 2&3) Highly sustainable
Slide 32: Delivering net zero transition at pace
32 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Delivering net zero transition at pace EPC RATING ACROSS THE PORTFOLIO (BY SQ. FT.) PORTFOLIO ENERGY CONSUMPTION (EUI) - KWH/M2 NLA 180 E 160 4% 19% 140 lower D 120 5% 25% reduction 100 ach
Slide 33: Delivering sustainability for our customers
33 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Delivering sustainability for our customers RUNNING ENERGY EFFICIENT BUILDINGS ADAPTIVE REUSE OF BUILDINGS DELIVERING SOCIAL IMPACT kWhe/m2 350.00 350 300.00 300 25 250 0.00 200.00 200 150
Slide 34: Summary
34 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Summary Graham Clemett, CEO Clerkenwell Workshops, Clerkenwell
Slide 35: A productive year
35 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 A productive year STRONG TRADING RESULT RESILIENT VALUATION VALUE-ADD PROJECT ACTIVITY GOOD PROGRESS ON PATHWAY TO NET ZERO CAPITAL RECYCLING ONGOING HIGHLIGHTING THE CORE STRENGTHS THAT DI
Slide 36: Well-positioned for future growth
36 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Well-positioned for future growth 1.2m Target population 5.5m London’s working population LARGE AND DIVERSE EXTENSIVE, WELL LOCATED FLEX OPERATING MARKET OPPORTUNITY PROPERTY PORTFOLIO PLAT
Slide 37: Significant income upside
37 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Significant income upside £m 250 At current ERVs = £35m 200 6 175 10 19 150 140 100 50 0 Mar 23 1 Category Like-for-like Category 2 Projects 3 Category McKay 4 Category Reversionary Categor
Slide 38: Outlook
38 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Outlook WELL POSITIONED TO CONTINUE DELIVERING STRONG INCOME AND DIVIDEND GROWTH ERV GROWTH MITIGATING OUTWARD YIELD MOVEMENT SIGNIFICANT VALUATION UPSIDE AS YIELDS STABILISE Vox Studios, V
Slide 39: Q&A
39 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Q&A Graham Clemett, CEO Dave Benson, CFO Leo Shapland, Head of Portfolio Management Kennington Park, Oval
Slide 40: Appendix
40 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Appendix Leather Market, London Bridge
Slide 41: The Workspace model
41 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 The Workspace model FLEXIBLE OFFER TYPE OF PROPERTY QUALITY OF SERVICE SOCIAL ENGAGEMENT FLEXIBLE LEASE LOCATION ON-SITE SUPPORT NETWORKING & COMMUNITY ENVIRONMENT AFFORDABLE ENVIRONMENTAL
Slide 42: Customers by business sector
42 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Customers by business sector INFORMATION, COMMUNICATION & TECHNOLOGY WHOLESALE & RETAIL 14% 15% PROFESSIONAL, TECHNICAL & CONSULTANCY SERVICES ARTS, ENTERTAINMENT & RECREATION 3% MARKETING
Slide 43: Our sustainability benchmarks and scores
43 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Our sustainability benchmarks and scores We transparently disclose our performance and data to numerous external benchmarking authorities. 5 star 4 star Development Standing investment Our
Slide 44: Refurbishment projects (1 of 3)
44 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment projects (1 of 3) Mar-23 Valuation Actual Unaffected Upgraded New Space ERV psf Rent at 90% Rent roll At March 2023 (£m) cost (£m) Completion area (sq. ft.) area (sq. ft.) (sq
Slide 45: Refurbishment projects (2 of 3)
45 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment projects (2 of 3) Actual/ Cost to Estimated Estimated Mar-23 Valuation Estimated Complete Estimated Unaffected Upgraded New Space ERV psf Rent at 90% Rent Roll At March 2023 (
Slide 46: Refurbishment projects (3 of 3)
46 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Refurbishment projects (3 of 3) Estimated Estimated Unaffected Upgraded New space At March 2023 cost (£m) completion area (sq. ft.) area (sq. ft.) (sq. ft.) Design stage (with planning cons
Slide 47: Mixed-use redevelopment projects (1 of 2)
47 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Mixed-use redevelopment projects (1 of 2) New Mar-23 Commercial commercial Estimated Rent Cash Development Valuation Rent Roll space Residential space ERV psf at 90% Received At March 2023
Slide 48: Mixed-use redevelopment projects (2 of 2)
48 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Mixed-use redevelopment projects (2 of 2) Mar-23 Commercial Rent Roll Space estimated Residential New Space ERV psf At March 2023 (£m) completion units no. (sq. ft.) (Average) Design Stage
Slide 49: Property portfolio
49 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Property portfolio LIKE-FOR-LIKE Map Property Net lettable Net rent ref name area (sq. ft.) roll (£) 1 Archer Street Studios 14,984 854,489 2 Biscuit Factory (Cocoa Studios) 39,298 1,045,53
Slide 50: Property portfolio
50 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Property portfolio LIKE-FOR-LIKE continued REFURBISHMENT Map Property Net lettable Net rent Map Property Net lettable Net rent ref name area (sq. ft.) roll (£) ref name area (sq. ft.) roll
Slide 51: Property portfolio
51 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Property portfolio REDEVELOPMENTS ACQUISITIONS Map Property Net lettable Net rent Map Property Net lettable Net rent ref name area (sq. ft.) roll (£) ref name area (sq. ft.) roll (£) 52 Loc
Slide 52: Property portfolio
52 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Property portfolio ACQUISITIONS continued Map Property Net lettable Net rent Map Property Net lettable Net rent ref name area (sq. ft.) roll (£) ref name area (sq. ft.) roll (£) McKay South
Slide 53: Disclaimer
53 Workspace Group PLC Overview Financial Review Operating Platform Summary Appendix Full Year Results 2022/23 Disclaimer This document is not audited and may include certain forward-looking statements relating to Workspace Group PLC (the “Company”), its plans and its current goals and expectations