2013 Annual Results www.capitalandcounties.com 25 February 2014 - PowerPoint PPT Presentation

Capita ital l & Counti unties s Propert rties s PLC 2013 Annual Results www.capitalandcounties.com 25 February 2014

Important notices This presentation includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Capital & Counties Properties PLC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this presentation on the price at which shares or other securities in Capital & Counties Properties PLC have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance. 2013 Annual Results 2

Agenda  Introduction Ian Hawksworth  Financial review Soumen Das  Operating review Ian Hawksworth and Gary Yardley  Q&A 2013 Annual Results 3

Capco Value growth and value creation  Focus on prime London TOTAL PROPERTY VALUE £2.3 BILLION, +20% (LfL)  2013 total return 23% 1 – EPRA Adjusted Net Assets +22% to 249 West End West London pence per share £1,156m £1,095m 2 – Total shareholder return 37%  Sound capital structure Earls Court Covent Garden Venues – £287 million cash and available facilities Properties £1,156m £161m £934m – Conservative 15% LTV 1 Growth in EPRA NAV per share plus dividend per share paid in the year 2 Growth in share price plus dividend per share paid in the year (assuming reinvestment) 2013 Annual Results 4

Highlights V alue growth and value creation  Covent Garden – Revised ERV target of £75 million by December 2016 – New lettings at 11.6% above December 2012 ERV – Resolutions to grant planning consent for Kings Court and Carriage Hall  Earls Court Masterplan – Outline planning consent granted – Detailed planning consents for Earls Court Village submitted  Earls Court land assembly well progressed – CLSA option exercised – Proposed TfL JV approved by Capco and TfL Boards in February 2014 – Acquisition of remaining 50% of Empress State  Lillie Square scheme enhancements consented  New debt facilities for Empress State and, post year-end, Covent Garden  Proposed final dividend: 1.0 pence per share (total 2013 dividend 1.5 pence per share) 2013 Annual Results 5

Financial review Soumen Das 6 2013 Annual Results

Underlying earnings Highlights 2013 2012 Var £m £m £m Net rental income 64.8 65.3 (0.5) Admin costs (33.8) (26.1) (7.7) Net finance costs (20.9) (22.8) 1.9 Tax on underlying earnings (2.3) (3.9) 1.6 Underlying earnings 7.3 12.5 (5.2) Underlying earnings per share 1.0p 1.8p (0.8p) Dividend per share 1.5p 1.5p - 2013 Annual Results 7

Net rental income £5.2m £3.5m £70m £65.3m £64.8m £5.0m Other £5.4m Other £1.2m £4.2m £60m Other: £1.2m Venues £13.5m £50m Venues £18.6m Earls Court Properties £40m £14.5m Earls Court Properties £9.2m £30m Covent Garden £20m Covent Garden £32.1m £35.6m £10m 0 2012 Covent Garden Earls Court Venues Other 2013 Properties 2013 Annual Results 8

Balance sheet Dec-13 Dec-12 Var £m £m £m Portfolio value 2,166 1,671 495 Net debt (329) (164) (165) Other assets and liabilities (25) (29) 4 NAV 1,812 1,478 334 EPRA adjusted diluted NAV 1,912 1,553 359 Number of shares in issue 757.9m 752.7m 5.2m Balance sheet excludes unrecognised surplus on trading properties of £69 million  Contingent tax liability: investment properties nil; trading properties £16 million  £106 million capital commitments  2013 Annual Results 9

EPRA adjusted diluted net assets per share NAV +22% to 249 pence 260p 45.9p 1.0p 250p 1.1p 0.4p 240p 230p 220p 249p 210p 200p 203p 190p 180p Dec-12 Valuation & Underlying Dividend Other Dec-13 sale of profits (net of scrip) property Diluted EPRA NNNAV 245 pence per share  2013 Annual Results 10

Debt management Cash and available facilities of £287 million at  Net Debt £329m £164m December 2013 £200m £100m £184m £119 million refinancing of Empress State facility  £45m 0 Cash Cash £665 million unsecured revolving credit facility for  (£100m) (£348m) (£374m) Covent Garden, agreed in February 2014 (£200m) (£300m) – 5 year term, margin 1.65% (£400m) – Increases available facilities by over £150 million (£500m) Dec-13 Dec-12 LTV 15% 10% Group interest cover 148% 172% Cash and available facilities £287m £401m Weighted average cost of finance 4.4% 5.2% Weighted average maturity 4.3 yrs 4.8 yrs 2013 Annual Results 11

Cash utilisation Substantial liquidity from internal resources £300m £287m £81.6m £8.0m £200m £241.8m Undrawn Facilities £121.0m £100m £184.5m £59.7m £39.8m £6.9m £1.7m £45.0m Cash 0 Dec-12 Operational Disposals Acquisitions Capex Borrowings Dividend Other Dec-13 cash flow (including Empress State) 2013 Annual Results 12

Operating review Ian Hawksworth and Gary Yardley 13 2013 Annual Results

Valuation Strong 2013 valuation + 19.9% (LfL) Market value Market value Value ERV Initial Equivalent change 1,2 change 1 Dec-13 Dec-12 yield yield £m £m 1,156 952 19.2% 11.0% 3.3% 4.7% Covent Garden 453 336 24.0% Earls Court 153 104 31.1% Lillie Square 3 265 110 19.9% Empress State 4 161 146 6.3% Venues Other 3,5 63 73 - Total Properties 2,251 1,721 19.9% 1 Like-for-like 2 Valuation change takes account of amortisation of lease incentives, capital expenditure and fixed head leases 3 Represents Capco's share 4 Dec 2012 - 50% share. Dec 2013 100% Capco owned 5 Peripheral assets 2013 Annual Results 14

Covent Garden Redefining global luxury for London 2013 Annual Results 15

Covent Garden Redefining global luxury for London  ERV target increased to £75 million by December 2016  Expand the premium retail offer  Improve the dining variety and quality  Extend the high quality residential portfolio  Grow the estate through tactical acquisitions  Explore and complete selective developments 2013 Annual Results 16

Covent Garden 2013 Highlights  Value £1.2 billion +19.2% (LfL)  ERV £58.0 million +11.0% (LfL)  NRI £35.6 million +1.9% (LfL)  New lettings 11.6% above Dec 2012 ERV  Adjusted occupancy 99%  Footfall robust at circa 44 million – 93% ABC1s (UK visitors)  Residential – The Russell: sales price over £2,400 psf average 2013 Annual Results 17

Covent Garden New brands across the estate 2013 2013 Annual Results 18

Covent Garden ERV target increased to £75 million by December 2016 ITZA - December  Covent Garden significantly below £1,000 prime central London average £900 £800  Proactive asset management has £700 increased rents £600 – King Street – 90% ITZA growth 3 £500 £400 – Market Building – 109% ITZA growth 3 £300 £200  Potential for strong growth in other £100 Covent Garden streets -- 1 Based on 30 ft Zone A, includes Bond St, Oxford St and Regent St. (Covent Garden based on 20 ft Zone A.) 2 Covent Garden average based on all retail units within the Capco estate 3 King Street and Market Building North Zone A uplift based on units under constant ownership since 2008. 2013 Annual Results 19

Covent Garden Zone A distribution December 2013 2013 Annual Results 20

Covent Garden Future street transformations 2013 Annual Results 21

Covent Garden Larger scale developments 2013 Annual Results 22

Kings Court & Carriage Hall New retail hub and residential address  Resolutions to grant planning consent received in December 2013  Over 90,000 sq ft, including 20,000 sq ft of new space  Total capex approximately £85 million  GDV c.£215 million  Start on site H2 2014, completion H1 2017 2013 Annual Results 23

Earls Court Properties A unique opportunity for urban re- imagination… 2013 Annual Results 24

Earls Court Properties … where Kensington, Chelsea and Fulham meet  Proposed development of over 70 acres  Outline planning consent for 10.1 million sq ft  Board approval in February for proposed TfL joint venture  CLSA option exercised  Lillie Square launch shortly 2013 INTERIM RESULTS PRESENTATION 25

Earls Court Properties Valuations EC1 & EC2 CLSA Lillie Empress Other Total Square State 63% 1 100% 50% 100% 100% Gross External Development Area (m sq ft) Residential 2.7 3.2 1.0 0.2 - 7.1 0.7 0.4 - 0.8 - 1.9 Commercial Total GEA 3.4 3.6 1.0 1.0 2 - 9.0 Dec 13 Valuation £453m n/a £153m £265m £63m £934m Uplift (LfL) 24.0% n/a 31.1% 19.9% 21.8% 1 Taking account of the announcement of 18 July 2013 and recent TfL Board approval 2 Includes 0.5 million sq ft which is part of the Masterplan as well as 0.5 million sq ft existing office space within the Empress State Building 2013 Annual Results 26