Quintain Estates & Development PLC 2013 Interim Results: 25 November 2013
Agenda 1 Overview Maxwell James 2 Finance Review Richard S tearn 3 London Development Maxwell James 4 Asset Management Nigel Kempner 5 Outlook Maxwell James 2 Quintain Estates and Development PLC
Delivery of 2012/ 13 priorities S tated May 2013 To be a leading To be a leading London investment and development specialist London investment and development specialist Maximise value from Reduce Group net debt Grow sustainable Wembley and Greenwich to below £400m income streams 3 Quintain Estates and Development PLC
Quintain Transformed Re-positioning completed Creating a leading Creating a leading London investment and development specialist London investment and development specialist Dispose Deliver De-lever £0.5bn Wembley £175m* capital recycled Phase 1 completed net debt, reduced from £535m Greenwich value crystallised * Pro-forma net debt as at 30 S ept ember 2013 reflect ing S equel and GPRL disposals 4 Quintain Estates and Development PLC
Hilton joint venture £30.1 million realised and upside retained 5
Planning consents at Greenwich Peninsula Masterplan re-positioning, enabling construction and maximising value 6
£115m Bond Issue Diversifying debt sources and extending maturities 7
AEG appointed as Wembley Arena operator Access to global music portfolio, positive for LDO and Hilton 8
Regional investment portfolio sold £39 million disposal, increasing focus on London 9
London Designer Outlet opened 350,000 visitors since opening and 83% let 10
Disposal of GPRL to Knight Dragon £230m of aggregate proceeds realising £31m profit 11
Group Re-S et Enabling value-creation and growth Focused Focused A solid A solid Ability to Ability to on on financial financial create create London London base base value value 12 Quintain Estates and Development PLC
Finance Review Richard S tearn, Finance Director
Building Financial S trength Focused obj ectives Balance Sheet Management Balance Sheet Management Rebalancing Income Profile Rebalancing Income Profile £115m debt refinanced with issue of £115m debt refinanced with issue of New income streams : New income streams : seven year bond seven year bond • London Designer Outlet • London Designer Outlet • Wembley Arena • Wembley Arena Net debt reduced through the Net debt reduced through the • iQ S • iQ S horeditch horeditch recycling of £450m over 18 months recycling of £450m over 18 months • London Portfolio • London Portfolio to £175m¹ to £175m¹ • Hilton Wembley • Hilton Wembley (1) Pro-forma net debt as at 30 S ept ember 2013, reflect ing S equel and GPRL disposals 14 Quintain Estates and Development PLC
Financial Review Headlines 6 months to 6 months to September September 2013 2012 Earnings £m £m Adj usted profit (before capital movements) before tax 3.1 4.6 Profit (loss) after tax 7.1 (22.5) EPRA diluted EPS 1.2p 0.1p Pro-forma (1) 30 Sept 2013 31 March 2013 Balance sheet £m £m £m Net debt 175.3 452.8 443.6 Bank gearing 30% 76% 76% Net Asset Value per share pence pence pence Basic 112 106 104 Diluted 112 106 104 EPRA diluted 113 107 105 (1) Pro-forma balance sheet as at 30 S ept ember 2013 reflect ing S equel and GPRL disposals 15 Quintain Estates and Development PLC
Income S tatement Rebalancing profile 6 months to 6 months to September September 2013 2012 £m £m Adjusted profit basis (including discontinued operations) Net rent 4.1 6.9 Fees from asset and development management 4.0 3.8 Other income 2.1 4.9 Gross profit 10.2 15.6 Administrative expenses (9.6) (11.6) Operating profit 0.6 4.0 Joint ventures and associates 4.1 2.9 Net finance costs (1.6) (2.3) Pre-tax adj usted profit 3.1 4.6 A reconciliat ion t o t he st at ut ory income st at ement is given in t he appendix 16 Quintain Estates and Development PLC
Property Portfolio £9.4m increase over six months Valuation Change Movement at since since % of Sept March March Group 2013 2013 2013 by GAV £m £m % Wembley 21.1 Investment assets 232.3 8.3 3.7% 28.3 Development land 312.0 0.1 - Greenwich Peninsula 1.7 Investment assets 18.8 - - S ilvertown 0.8 Development land 9.2 0.7 7.8% iQ 19.3 S tudent accommodation 212.9 4.2 2.0% Quercus 5.7 Long-term healthcare 62.3 (2.3) (3.6)% Other regional assets 3.9 S econdary property, land 43.5 (1.6) (3.5)% Continuing portfolio 80.8 891.0 9.4 1.1% Assets held for sale 4.9 S econdary property 53.9 (1.5) (2.7)% 14.3 Greenwich development land 157.6 - - Total 100.0 1,102.5 7.9 0.7% Portfolio split 56.3 Held in Group 620.3 6.0 1.0% 43.7 Held in j oint ventures 482.2 1.9 0.4% 17 Quintain Estates and Development PLC
Balance S heet Platform for growth Pro-forma post September Change during March Sequel and 2013 six months 2013 GPRL sale £m £m £m Investment properties 556.8 556.8 (5.7) 562.5 Joint ventures 204.9 204.9 (151.9) 356.8 Other non-current assets 15.0 15.0 (49.4) 64.4 776.7 776.7 (207.0) 983.7 Trading properties 9.6 9.6 (0.6) 10.2 Assets held for sale - 256.5 256.5) - Net debt (175.3) (452.8) (9.2) (443.6) Other assets and liabilities (27.3) (40.0) (28.1) (11.9) Net assets 583.7 550.0 11.6) 538.4 Net asset value per share 112p 106p 2p 104p 18 Quintain Estates and Development PLC
Net Asset Bridge Net asset value accretion Following S equel and GPRL transactions £m 590 112p 580 570 33.7 560 106p 4.1 550 9.6 1.6 7.9 0.6 104p 10.2 584 540 530 550 520 538 510 500 Mar ‐ 13 Adjusted Admin Adjusted Revaluation of Other capital Sep 13 NAV accretion Pro ‐ forma Reported NAV gross profit, expenses finance costs property movements Reported NAV GPRL sale NAV (1) inc JVs (1) Income st at ement figures are on an adj ust ed basis 19 Quintain Estates and Development PLC
Greenwich Disposal 20% premium achieved in 16 months £m 250 44 200 31* Carrying value 150 230 86 100 186 50 52 17 0 Original share of Share of Valuation gains to Premium (20%) Proceeds for 40% Settlement of Total proceeds PQ infrastructure Sept 13 interest deferred loan * Compares t o a £26m premium implied by S avills updat ed 30 S ept ember 2013 valuat ion 20 Quintain Estates and Development PLC
Greenwich Disposal Earnings enhancing £m 4.0 3.5 3.0 2.5 2.0 4.5 3.3 1.5 1.0 0.5 0.0 (0.5) (1.0) (1.5) 1.2 (2.0) (4.0) (2.5) (3.0) 1.6 (3.5) (4.0) DM/PM fees Share of JV pre ‐ Team costs Net interest saving Annual earnings benefit development costs Income and cost figures are on an annualised illust rat ive basis 21 Quintain Estates and Development PLC
Debt Financing Bank financing reducing 30 31 March September 2013 Covenant Pro-forma¹ 2013 Net debt £175m £453m £444m Gearing, per banking covenants 110% 30% 76% 76% Loan-to-value ratio 24% 45% 46% Look-through LTV 35% 51% 53% Committed but un-drawn debt £148m £70m Cash balance (included in net debt) £27m £45m Average cost of debt 3.7% 3.2% Weighted average debt maturity (core debt) 3.4 yrs 2.7 yrs Hedging: - fixed 65.7% 65.1% - caps 34.3% 34.9% Interest cover – per banking covenants 1.25x 2.2x 8.5x (1) Pro-forma net debt as at 30 S ept ember 2013 reflect ing S equel and GPRL disposals 22 Quintain Estates and Development PLC
Corporate Debt Maturities New seven year bond extends maturity profile to 2020 £m 23 Quintain Estates and Development PLC
De-leveraging Long-term target delivered well ahead of schedule £m 600 £535m £(193)m Target Capital 500 <£400m recycling £453m £111m £(288)m Contracted disposals 400 Hilton, LDO, iQ <£300m LDO, Wembley 300 £68m 200 LDO, MSCP 100 March September 2012 2013 0 Last 18 months Next 6 months Net debt position Capex Disposals 24 Quintain Estates and Development PLC
Building Financial S trength Focus on leverage and income Balance Sheet Management Balance Sheet Management Driving Income Driving Income Obj ective: Obj ective: Obj ective: Obj ective: Retain capital structure appropriate Retain capital structure appropriate Create sustainable income streams Create sustainable income streams to underlying asset base to underlying asset base with potential for growth with potential for growth 25 Quintain Estates and Development PLC
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27 A maj or consented site Wembley Park Quintain Estates and Development PLC
Wembley Park Big experience + human scale 28 Quintain Estates and Development PLC
First Phase Complete Wembley Park Boulevard • 1.8 million sq ft completed • Centre of Wembley Park opened • West-End standard facilities • Forecast annual footfall of c.8m people 29 Quintain Estates and Development PLC
Wembley Arena World-class operator completes re-vitalisation • Acquired in 2002 • Re-opened post-renovation in 2007 • Introduced Barclaycard as sponsor in 2010 • S ecured AEG as operator in 2013 30 Quintain Estates and Development PLC
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