Londonmetric Property Plc · LSE:LMP
Londonmetric Property — FY2024 Earnings Presentation
32 slides from Londonmetric Property's earnings presentation, Jun 4, 2024
Slide 1: Full Year Results
Full Year Results Year Ended 31 March 2024 www.londonmetric.com
Slide 2: Agenda
AGENDA Highlights Financial Review Property Review Outlook Q&A 2
Slide 3: Overview
Overview A transformational year but the approach remains the same • Macro trends frame £6.0bn portfolio Portfolio – Real estate investors continue to pivot to strongest thematics £6.0bn From £3.0bn in Mar-23 – Portfolio aligned to logistics, convenience, healthcare & hospitality – Structural tailwi
Slide 4: Financial Highlights
Financial Highlights Full Year to 31 March 2024 Income Statement March 2024 March 2023 Change Q4 24 dividend EPRA Earnings £121.6m £101.1m +20.3% +15.4% To 3.0pps, v Q4 ‘23 dividend EPRA Earnings (pps) 10.9p 10.3p +5.4% Q1 25 dividend Dividend (pps) 10.2p 9.5p +7.4% +18.8% To 2.85pps, v Q1 ‘24 divid
Slide 5: Financial Review
LONDONMETRIC lay PROPERTY PLC FINANCIAL REVIEW
Slide 6: Income Statement
Income Statement1 31 March 2024 31 March 2023 Change Net rental income Net rental income £177.1m £146.8m +20.6% +20.6% +43.6% over 3 years Administrative costs £(19.7)m £(16.5)m Income leakage Net Finance costs £(36.8)m £(29.9)m 1.0% EPRA Earnings £121.6m £101.1m +20.3% Mar 23: 1.1% EPRA Earnings (p
Slide 7: Balance Sheet
Balance Sheet1 31 March 2024 31 March 2023 Property portfolio2 £6,003.4m £2,993.8m Property revaluation Cash £114.1m £36.5m £(11)m Debt £(2,087.4)m £(1,030.5)m Corporate merger costs Fair value of derivatives £32.6m £11.1m £30m Other net Liabilities3 £(121.2)m £(43.6)m LXI Adviser buy out costs IFRS
Slide 8: Financing
Financing1 Refinancing re-aligns towards our preferred unsecured model Gross Debt • M&A activity added £1.2bn secured debt facilities £2.1bn • Refinancing activity into unsecured debt From £1.0bn – Cancelled £625m of LXi’s secured facilities Refinancing activity added – Replaced with £700m unsecured
Slide 9: Debt Metrics
Debt Metrics¹ Continued disciplined approach to capital structure Loan to Value 31 Mar 2024 31 Mar 2023 33% Total facilities £2,790m £1,408m In line with long term average 40 Gross Debt £2,087m £1,031m 38 36 35 35 33 33 Hedging2 100.0% 93.2% 32 32 30 30 29 Average maturity2 5.4 years 6.0 years 25 LT
Slide 10: Contracted Income Progression (£m)
Contracted Income Progression (£m)1 1. Net contracted rental income 10
Slide 11: Delivering Long Term Shareholder Returns
Delivering Long Term Shareholder Returns Consistently delivering attractive compound led returns Earnings Dividend Total Property Return Total Shareholder Return (pps) (pps) (rebased to 100)1,3 (rebased to 100)2,3 11.0 11.00 320 400 Dividend 10.0 10.00 300 Share price 9.0 9.00 280 350 8.0 8.00 260 7
Slide 12: Property Review
LONDONMETRIC lay PROPERTY PLC PROPERTY REVIEW
Slide 13: Investment Activity
Investment Activity M&A dominated our investment activity, underscoring our ambition to continue earnings growth • Attractive portfolios acquired in year Added contracted rent (pa) – £3.2 billion1 LXi & CTPT portfolio acquired at 4.0% NTA discount +£195m +134% from March 23 – £36 million of other op
Slide 14: Our Portfolio
Our Portfolio Aligned to structurally supported sectors, prioritising asset selection, patience and strong conviction Security of income Fully occupied 19.4 years 99.4% WAULT Occupancy Healthcare & Attractive NIY2 Gross to Net Income Ratio Education, 16.1% 5.3% 99.0% EY: 6.3%³ Collected Distribution
Slide 15: Investment Strategy
Investment Strategy Focused on emerging consumer behaviour & key operating assets Disruptive technologies driving modern shopping habits Online Retail by 2027 Logistics Continued occupier and investment demand 30%1 Logistics remains our leading sector & strongest conviction call Up from 26% in 2023
Slide 16: £6.0bn Portfolio Breakdown
£6.0bn Portfolio Breakdown Aligned to structurally supported sectors and key operating assets Logistics Entertainment & Leisure Convenience Healthcare & Education • 168 assets, £126m rent • 130 assets, £83m rent • 177 assets, £61m rent • 68 assets, £55m rent (£7.60 psf v ERV £9.50 psf) (£16.40 psf)2
Slide 17: Asset Management Activity
Asset Management Activity 151 asset management initiatives adding £7.5m pa additional rent • 98 rent reviews: +£4.8m pa income Like for like income growth – Contractual reviews: +17%; +£2.5m pa rent +5.5% 151 transactions – Open market reviews: +30%; +£2.3m pa rent Uplifts on logistics rent reviews1
Slide 18: Actively Improving Asset Quality
Actively Improving Asset Quality GRESB rating (2023) Delivering assets fit for the future and playing our part in decarbonisation 76 (2022: 64 ) LMP peer group average: 65 • Ensuring fit for purpose and desirable real estate Landlord recommendation score • Occupier led approach ensuring retention an
Slide 19: Outlook
LONDONMETRIC lay PROPERTY PLC OUTLOOK
Slide 20: Outlook
Outlook Inflection points require capital allocation to be on the right side of change • Challenging macro investment environment is settling – UK consumer remains resilient – Inflation rates falling creating an inflection point for interest rates – Stable outlook will bring confidence, lower swap r
Slide 21: Look Forward
Look Forward If you own the right assets in the right sectors, time creates wealth • Re-shape and simplify portfolio aligning to strongest thematics Logistics exposure – Focus on sectors and assets where we are a price setter, not a price taker 44% – Recycle capital and re-weight into strongest conv
Slide 22: Appendices
LONDONMETRIC lay PROPERTY PLC APPENDICES
Slide 23: Portfolio Metrics
Portfolio Metrics Valuation Revaluation MSCI WAULT Contracted Rent Average Area (Share) Surplus/(Deficit) CVg2,4 Occupancy NIY1 (years) Rent Uplifts Rent As at 31 March 2024 (m sq ft) (£m) (£m) (%) (%) (%) (%) Expiry Break (£m) (%) (£psf) Mega distribution 2.4 310.2 (1.7) (0.5) (0.4) 100.0 4.3 15.8
Slide 24: Income certainty & growth
Income certainty & growth Warrington WAULT: 19.4 years Inflation capture through contractual rent reviews 100% CPI RPI 0-3 y, Our index linked (RPI/CPI) reviews have 90% 5.5% a range of collars and caps typically 1% to 4% over a five-year period: 80% >20 y, 4-10 y, 18.0% 70% 33.0% • At 16% inflation
Slide 25: Top Assets and Occupiers
Top Assets and Occupiers Top Assets 3.0% 2.8% 2.1% Ramsay Rivers Hospital, Healthcare Alton Towers, Entertainment Bedford Link, Bedford Thorpe Park, Entertainment £6.0bn Primark, Islip, Logistics Ramsay Rivers Hospital, Bedford Link, Great Bear, Portfolio Sawbridgeworth Bedford Dagenham Great Bear,
Slide 26: Long Income Portfolio
Long Income Portfolio Assets with long, reliable income and contractual uplifts, generating strong property returns Entertainment & Leisure Convenience Healthcare & Education Value £3,244m Contractual Uplifts Theme parks (45%) – Consists of Thorpe Park, Foodstores (45%) – 48 assets let at an average
Slide 27: Distribution Portfolio
Distribution Portfolio Aligned to a structurally supported sector enjoying favourable demand/supply dynamics Urban Regional Mega Value £2,563m FY 23: £2,185m Occupancy 99.4% FY 23: 98.9% WAULT 12.4 years • Value: £1,563m • Value: £690m • Value £310m FY 23: 11.7 years • £76m rent (£8.60 psf) • £36m r
Slide 28: Debt Facilities & 'Income strip' financial liability
Debt Facilities & ‘Income strip’ financial liability Lender Facility Drawn2 Maturity1 Debt cost3 Expiry (£m) (£m) (years) (%) Unsecured RCF (2021) Syndicate 225 90 2.1 Variable 2026 Unsecured RCF (2021) Wells Fargo 175 55 2.1 Variable 2026 Unsecured RCF (2022) Syndicate 275 100 2.6 Variable 2026 Uns
Slide 29: Debt Maturity Profile
Debt Maturity Profile 600 500 400 Facility Size (£m) 300 200 100 000 1 Secured Unsecured Undrawn Debt 29
Slide 30: Environmental progress
Environmental progress LMP Energy consumption Overview Net Zero Carbon (‘NZC’) -88% since 2015 Our focus is on minimising the 1. Our Operations - Carbon Neutral for 2024 environmental impact of our business, LMP LFL consumption maximising energy efficiency of assets & We had set a target of NZC in o
Slide 31: Solar PVs
Solar PVs Recent activity increased solar PV capacity to 8MWp, with pipeline of a further 3MWp Completed in year – 0.8MWp Completed PPE – 3.1MWp Near term pipeline – 3.2MWp Bicester – Greencore 0.3MWp We have 3.2MWp of further potential Huntingdon - AM Fresh 1.9MWp solar capacity from near term Cove
Slide 32: Benefits of the Net Lease Business Model
Benefits of the Net Lease Business Model Net lease returns driven by regular income, providing shareholders with the ability to benefit from compounding returns over time The Net Lease Business Model Well Established US Net Lease Businesses1 Long and secure Sector leading WAULT of 19 years, across a