Growthpoint Properties Limited · JSE:GRT
Growthpoint Properties — Capital & Regional — H1 2022 Earnings Presentation
34 slides from Growthpoint Properties's earnings presentation, Nov 9, 2022
Slide 1: Capital & Regional plc
CAPITAL & REGIONAL PLC UK FOCUSED RETAIL PROPERTY REIT SPECIALISING IN COMMUNITY SHOPPING CENTRES 9 NOVEMBER 2022 REFOCUSED REPOSITIONED RESET SUPPORTING COMMUNITY LIVING.
Slide 2: Results and Market Overview
RESULTS AND MARKET OVERVIEW Lawrence Hutchings Chief Executive SUPPORTING COMMUNITY LIVING. 2
Slide 3: Refocused Repositioned Reset
REFOCUSED REPOSITIONED RESET Focus on repositioning and operations following active 12 months Refocus, Valuations Consumer demand Invest in Refocus leading restructure stabilising for community customer management and recapitalise - retail and services proposition platform delivered balance sheet st
Slide 4: Transforming our Balance Sheet
Transforming our Balance Sheet Disciplined stewardship of capital 72% Loan Non-Core Asset Equity restructuring sales raise 40% HY 2021 LTV HY 2022 PRO-FORMA Comprehensive reset of the LTV LTV 40% after > 50% Past three valuation cycles stable balance sheet through 7 key reduction in asset values sup
Slide 5: Resilient Operational Performance
Resilient Operational Performance Our ongoing focus on needs based, local retail and services remains relevant 29m 55 93.7% Footfall visits Leases signed H1 2022 Occupancy (+58% vs 2021 YTD) +34.1% v previous passing 30 June 2022 June +4% v national index +17.8% v ERV 65 deals in pipeline (92.8% Dec
Slide 6: Dividend Reinstated
Dividend Reinstated Interim Dividend 2.5p per share Committed capex Protects REIT compliance Scrip dividend fully funded option 6
Slide 7: 2022 Interim Financial Results
2022 INTERIM FINANCIAL RESULTS Stuart Wetherly Group Finance Director SUPPORTING COMMUNITY LIVING. 7
Slide 8: 2022 Transactional Activity
2022 Transactional Activity Loan restructuring Asset sales Hemel Hempstead – discounted debt buyback Walthamstow – residential receipt • Paid £11.8m to settle £24.0m of loan liabilities (51% • Completed in July 2022 with proceeds of £21.6m discount) received • Increased Group NAV by £12.3m • First p
Slide 9: Balance Sheet Restructuring and Operational Recovery
Balance Sheet Restructuring and Operational Recovery H1 2022 H1 2021 Difference PROFITABILITY Net Rental Income (Investment Assets) £12.2m £9.9m +£2.3m Adjusted Profit 1, 2 £5.8m £3.1m +£2.7m Adjusted Earnings 1, 2 3.5p 2.8p +0.7p IFRS Profit/(Loss) for the period £26.8m £(41.3)m +£68.1m Interim Div
Slide 10: Recovery in Adjusted Profit: Business Rebounds from Covid-19
Recovery in Adjusted Profit: Business Rebounds from Covid-19 H1 2022 H1 2021 Difference Comment PROFITABILITY Improved Occupancy and Rent Collection Net Rental Income (Investment Assets) £12.2m £9.9m +£2.3m c. £1m net credit from bad debt provisions no longer required Interest Payable (Investment As
Slide 11: Rent Collection back around Pre-Pandemic Levels
Rent Collection back around Pre-Pandemic Levels Rent collected Rent collected 6M TO 30 JUNE 2022 YTD TO SEPTEMBER 2022 Rent collected 98.0% 97.3% Outstanding 2.0% 2.7% TOTAL BILLED 100% 100% Business wide focus driven Rent collection for FY 2021 Progress has enabled release of net collections back i
Slide 12: Group Adjusted Profit – Impact of Transactional Activity
Group Adjusted Profit – Impact of Transactional Activity Increase Decrease In total there are net items of approximately £1.5m in H1 2022 Adjusted Profit that will not recur on an ongoing basis 12
Slide 13: Valuations
Valuations 30 June 2022 30 December 2021 Like for like Investment Assets NIY NEY NIY variance £m £m NEY (%) 390m (%) (%) (%) (%) 380.6m 380m Maidstone 36.2 9.98% 11.35% 36.2 10.44% 11.22% - 370m Walthamstow 101.6 5.59% 6.51% 100.4 5.84% 6.55% +1.2% 358.5m 360m Wood Green 150.8 7.41% 6.88% 148.9 7.33
Slide 14: Refocused Repositioned Reset
REFOCUSED REPOSITIONED RESET Loan restructuring Equity raise Asset sales 72% 49% 40% HY 2021 Reclassify Restructuring Recapitalisation Maidstone Hemel loan HY 2022 Walthamstow Blackburn Pro-forma LTV Managed RBS and equity raise office sale buyback LTV residential sale Assets loan receipt The combin
Slide 15: Rebased Long Term Debt Position
Rebased Long Term Debt Position Debt Cash Net LTV Net LTV Interest Fixed Maturity Status £M £M debt % LTV Covenant % % £M % % Proforma at 30 June 2022 The Mall - All covenants waived until Nov Jan 27 Maidstone, Walthamstow, Wood 140.0 (9.3) 130.7 52% 49% 70% 3.45% 100% 2023 +12m Green 12m conditiona
Slide 16: Resumption of Dividend
Resumption of Dividend Improved operational performance, valuation stability and restructuring activity enabled reinstatement of the dividend 97.3% +1.7% 40% 2.5p Improved operating performance and YTD 2022 H1 22 Proforma Net Interim stabilisation of values Rent Collection movement in LTV Dividend I
Slide 17: Business Update
BUSINESS UPDATE Lawrence Hutchings Chief Executive SUPPORTING COMMUNITY LIVING. 17
Slide 18: Community Strategy Driving Our Performance
Community Strategy Driving Our Performance Focus on needs-based retail and services – our vibrant trading places Community strategy Occupational costs Accelerate remerchandising, repositioning Affordable, sustainable rents and and rebranding into non-discretionary and services service charges Reposi
Slide 19: Footfall Recovering Towards 2019 Levels
Footfall Recovering Towards 2019 Levels Community strategy underpins benchmark outperformance YTD Footfall Performance vs 2019 Footfall is recovering towards 2019 levels YTD footfall performance vs 25.0 M 2019 keeps improving since Jan 20.0 M 15.0 M Wood Green YTD footfall 4% 10.0 M higher than 2019
Slide 20: Leasing Values and Volumes maintain Positive Trajectory
Leasing Values and Volumes Leasing Spreads to ERV1 maintain Positive Trajectory 2022 PERFORMANCE 19.3% 17.8% (TO 30 JUNE 2022) 15.6% New lettings 41 £1.9m H1 21 FY 21 H1 22 Renewals settled 14 £0.5m Leasing Transactions - Volumes and Values Total 55 £2.4m 55 transactions Comparison to 52 transaction
Slide 21: Robust Leasing Performance Rebuilding Occupancy
Robust Leasing Performance Occupancy in centres recovering from lows of early 2021 LEASING PIPELINE Rebuilding Occupancy 98.00% (31 December 2021 to YTD) Retailer demand continues to recover in our key categories 96.00% New lettings & renewals 94.00% 55 £2.4m 92.00% 90.00% Signed Headline rent 88.00
Slide 22: Delivering Significant Remerchandising Progress
Delivering Significant Remerchandising Progress Increase in store and income representation in key community categories including: Grocery, Pharmacy and Services 2017 Customer Proposition 2022 Customer Proposition Food & Food & Grocery Grocery 12% 16% *Other *Other 38% 39% Value Value Apparel Appare
Slide 23: Diversified Income Lead By Well Capitalised Retailers
Diversified Income Lead By Well Capitalised Retailers TOP 10 OCCUPIERS BY % OF Pharmacy and Health CONTRACTED RENT RENT STORES growing categories 4.45% 3 3.97% 14 Significant shift in quality of 3.58% 5 income exposure by retailer 3.50% 3 3.28% 3 3.25% 3 Strong focus on value and essential 2.65% 7 r
Slide 24: New Speciality Store Formats And Fitouts
New Speciality Store Formats And Fitouts Combination of leading national and local operators Unit ? Offers blah ? 24
Slide 25: Continued recovery in operating performance; Madrid fully integrated
• Continued recovery in operating performance • Madrid fully integrated and profitable following Covid disruption • H1 EBITDA £0.8m (2021 £0.8m supported by £2.5m insurance receipt) • Forward bookings for peak winter season indicate further recovery in EBITDA • Sector leading in ESG: • Planted over
Slide 26: Major Repositioning Initiatives: Food Catering, Walthamstow
Food Catering Redefining food service delivery in community centres Walthamstow Food Hall • Major Repositioning Initiatives Heads of Terms now agreed with Crate • 16,000 sq ft 7 street eats operators alongside an in-house bar and coffee kiosk • Crate are leading local operators with an established e
Slide 27: Major Repositioning Initiatives: Wood Green Express Food
Food Catering Redefining food service delivery in Community centres Wood Green express food • Major Repositioning Initiatives Development of under-utilised bridge link space to create 6 street- eats style kiosk units totalling approx. 1,200 sq ft • 50% pre-let, before marketing externally • Operator
Slide 28: Major Repositioning Initiatives: Health Care and Medical Services
Health Care and Medical Services Primary care and diagnostics facilities supporting the NHS to deliver accessible local health services Wood Green Major Repositioning Initiatives • First diagnostic facility in a UK shopping centre opening in Q3 2022 • Lease Exchanged for Phase 1 – 15-year term to t
Slide 29: Repositioning Capex Programme
Repositioning Capex Programme Pipeline of transformational accretive repositioning projects driving income and value growth c.£3.8m Ilford - TK Maxx relocation c.£7.6m Ilford - Medical Centre and wider refurbishment Maidstone - £1.0m Leisure and kids play £0.6m Wood Green - Bridge link £1.0m Waltham
Slide 30: Mixed Use Repositioning and Value Creation
Repositioning and Value Creation Continued focus on unlocking mixed use value potential building on Walthamstow success Walthamstow Mixed Use Future Residential Projects • Phase 1: Twin Tower, 495 residential • Architects appointed with FEC on apartments three assets to establish further residential
Slide 31: ESG Strategy Progress
ESG Strategy Progress Total Emissions -41% vs 2019 Our Environmental Impact Engagement and Connectivity Established Net Zero Pathway Supported 239 charities and community groups Better Buildings Partnership (BBP) RoSPA President’s (11 Total Energy Committed first phase projects - consecutive annual
Slide 32: Balance Sheet Stability, Operational Resilience, Dividend Reinstated
RESET Balance Sheet Stability Operational Resilience REFOCUS Dividend Reinstated Accelerate Community Strategy Refocus Management Platform REPOSITION 32
Slide 33: Q&A
Q&A SUPPORTING COMMUNITY LIVING. 33
Slide 34: Forward Looking Statement
Forward Looking Statement This document contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expresse