2020 HA 2020 HALF Y YEAR R RESULT LTS 5 AUGUST 2020
A clear purpose and a responsible approach to business “We create the space that enables extraordinary things to happen” 2
Over £1m of community assistance in response to the pandemic • Accelerated the launch of the £10 million SEGRO Centenary Fund − £771,000 awarded as grants to projects across the Group in H1 2020 − £465,000 of assistance in kind SUPPLIERS Enfield Community Hub Warsaw Hospital City Harvest Foodbank Munich Look Ahead 3
Continued growth - structural trends accelerating Further earnings and NAV growth Resilient operational performance Structural trends accelerating Continuing to invest for growth - momentum going into H2 4
Continued growth - structural trends accelerating Further earnings and NAV growth Resilient operational performance Structural trends accelerating Continuing to invest for growth - momentum going into H2 SEGRO Logistics Park Martorelles 5
Further earnings and NAV growth Income Statement H1 2020 H1 2019 Change Adjusted profit before tax (£m) 140.4 131.8 +6.5% Adjusted EPS (pence) 1 12.5 12.2 +2.5% Dividend per share (pence) 6.9 6.3 +9.5% Balance Sheet 30 June 2020 31 Dec 2019 Change +0.7% 2 Portfolio value (£m) 11,246 10,251 Adjusted NAVper share(pence) 3 718p 700p +2.6% LTV Ratio (%) 22 24 - 1 Average number of shares increased to 1,108.1 million as of 30 June 2020 reflecting the June equity raise (30 June 2019: 1,067.1 million) 2 Percentage valuation change based on difference between opening and closing valuation for all properties including those under construction and land, adjusting for capex, acquisitions and disposals 6 3 Adjusted NAV per share is in line with EPRA NTA – the FY19 figure has been has been restated to align with the definition of EPRA NTA
7.4% growth in adjusted net rental income Proportionally consolidated net rental income (excluding joint venture fees), H1 2019-20, £ million £16.9m £2.5m £188.3m 2 (£0.7m) JVs £(5.5)m £43.2m £2.7m £175.4m JVs £(3.0)m 1 Group £38.9m £145.1m Group: up: +2. 2.0% 0% UK: +2.9% CE: +0.5% Group Group £136.5m £145.1m H1 2019 net Like-for-like Provision for Completed Disposals Acquisitions Other H1 2020 net rental income NRI potential bad developments rental income debts 1 Provision for potential bad debts arising from billings relating to Q2 & Q3 rents 2 Proforma H1 2020 net rental income can be found on slide 33 7
Growth in net rental income drives earnings H1 2020 1 2020 H1 2019 1 2019 Cha hange nge Adjusted income statement £m £m • Total cost ratio 21.2% (H1 Gross rental income 187.2 173.4 2019: 22.0%) Property operating expenses 1 (42.1) (36.9) • 18.6% excl share based payments (H1 2019: Net r rent ntal i inc ncome 145. 145.1 136. 136.5 +6. 6.3% 3% 19.2%) Share of joint ventures’ adjusted 29.2 27.7 profit 2 Administration expenses (24.9) (23.6) • Estimated year end Joint venture fee income 10.9 9.4 average share count: Adj djus usted o d ope perating ng pr profit 160.3 160. 150.0 150. +6. 6.9% 9% 1,150.7 million Net finance costs (19.9) (18.2) Adj djus usted pr d profit be before tax 140. 140.4 131. 131.8 +6. 6.5% 5% Tax on adjusted profit 1.1% 0.8% Adj djus usted pr d profit after tax 138. 138.8 130. 130.6 +6. 6.3% 3% Adj djus usted E d EPS (pe penc nce) 12.5 12. 12.2 12. +2. 2.5% 5% Average share count (millions) 1,108.1 1,067.1 1 H1 2019 number has been re-presented for change in the treatment of service charges 2 Net property rental income less administrative expenses, net interest expenses and taxation 8
2.6% increase in Adjusted NAV 1 Components of Adjusted NAV change, 31 December 2019 to 30 June 2020 6p 13p 7p 718p 6p (14)p 700p Development gains: 5.5p 31 December H1 2020 2019 final Realised and Equity Placing Exchange rate 30 June 2020 1 2019 Adjusted EPS dividend unrealised gains and other 1 Adjusted NAV is in line with EPRA NTA which was introduced 1 January 2020. The 31 December 2019 net asset value has been restated. 9
Portfolio value £11.2 billion (+0.7%) Portfolio yield: 4.8% 2 ERV growth: 0.8% +0.9% Lon ondon on ER ERV London 4.4% Heathrow +0.9% UK: +1.4% Slough 5.0% +1.0% Park Royal +1.1% +0.6% UK Big Box 4.9% N&E London +0.6% Yields unchanged from 31 December 2019 +0.4% Germany 4.7% CE by by owne ner ERV ER +0.0% Italy 5.3% Cont. SEGRO +0.8% Eur. +1.1% France 5.0% +0.4% SELP +0.2% +0.1% Poland 6.2% 0% 2% 4% 6% 8% Portfolio yield at 30 June 2020 1 Yield on standing assets at 30 June 2020; ERV growth based on assets held throughout H1 2020. 2 Net true equivalent yield 10
Portfolio value £11.2 billion (+0.7%) Portfolio: UK: +0.1% Continental Europe: +1.8% +0.7% £100m Whole portfolio valuation uplift £80m After £20.5m of £60m acquisition costs £40m £20m £0m Total Slough UK Big London Germany France Italy Spain Poland Box Whole portfolio (including 0.7% 1.2% 0.7% (0.6)% 3.1% 0.5% 3.0% 7.2% (0.3)% developments) Held 0.3% 0.2% 1.1% (0.2)% 1.5% 0.1% 0.1% 2.8% (0.5)% throughout 11
Over £1bn 1 of new financing to further strengthen balance sheet Equi quity P Placing ng High liquidity: £1.5bn 2 of cash and available • • £680m gross proceeds facilities • 83m new shares – RCFs extended by 1 year to 2025 • 820p per share • Significant headroom to financial covenants US P Private P Placement nt Debt bt I Issue ue − 66% valuation headroom to gearing • €450m proceeds agreed covenant • 1.6% coupon, average 17 year maturity − 81% net rental income headroom to interest • To be drawn in Q4 2020 cover covenant • No material debt maturities before 2027 Bond buy nd buyba back • £79m 2021 & £39m 2022 maturity • Some of the last remaining high coupon bonds 1 Sterling equivalent 2 Including joint venture at share 12
Balance sheet positioned to support further development-led growth LTV ratio and average cost of debt (incl share of joint ventures), 2012-20 • Proforma average cost of debt 1.6% 60% 4.6% 5.0% 4.2% 4.2% • Proforma average debt maturity 4.0% Average cost of debt 10.7 years 3.5% 3.4% 40% LTV ratio 3.0% 2.1% 1.9% 1.7% • Net debt: £2.5bn (FY 2019: 1.7% 2.0% £2.5bn) 20% 1.0% 51% 42% 40% 38% 33% 30% 29% 24% 22% • 2020: c.£800m estimated 0% 0.0% development capex (incl 2012 2013 2014 2015 2016 2017 2018 2019 1H20 infrastructure capex and land acquisitions) LTV ratio Ave cost of debt 13
Further earnings and NAV growth • 2.5% adjusted EPS growth • 2.6% NAV growth to 718p • Loan-to-value ratio of 22% • 2020 interim dividend increased by 9.5% SEGRO Park Enfield 14
Continued growth - structural trends accelerating Further earnings and NAV growth Resilient operational performance Structural trends accelerating Continuing to invest for growth - momentum going into H2 SEGRO Park Düsseldorf Süd 15
Strong leasing and asset management results High levels of customer retention and Capturing reversion from renewals Continued leasing momentum in 1H20 2 continued low vacancy 1 and reviews New rent contracted 9 90 Annualised rental income, £m +17.8% Net new rent on existing space 45 Rent change on review and renewal, % 20 8 40 18 85 Customer retention rate, % 7 35 16 6 Vacancy rate, % +10.4% 14 30 80 +9.5% 5 12 +8.8% 25 10 4 20 75 +5.4% 8 15 3 +3.3% 6 10 2 70 4 5 1 2 0 0 65 0 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2013 2014 2015 2016 2017 2018 2019 1H20 2015 2016 2017 2018 2019 1H20 1 Vacancy rate based on ERV at 30 June 2020; customer retention rate based on headline rent retained in the same or alternative SEGRO premises. 2 Net new rent on existing space reflects headline rent agreed on new leases less passing rent lost from space taken back during the year; new rent contracted is total headline rent secured or (in the case of developments) agreed in the year. 16
Developments completing on schedule despite Covid-19 • 24 projects - 358,500 sq m of new space • £22m potential headline rent (64% leased) • 7.2% average yield on cost • All developments expected to achieve BREEAM ‘Excellent’ or ‘Very Good’ 1 SEGRO Park Kettering Gateway, Midlands Milan South DC 1,000 Development completions, ‘000 sq m 900 Expected H2 Completions 800 700 600 SEGRO Logistics Park Getafe II, Madrid SEGRO Park Enfield, London 500 400 300 200 100 0 2014 2015 2016 2017 2018 2019 1H20 SEGRO Park Collégien, Paris SEGRO Park Düsseldorf Süd (Phase 9) 1 or local equivalent 17
Continued growth - structural trends accelerating Further earnings and NAV growth Resilient operational performance Structural trends accelerating Continuing to invest for growth - momentum going into H2 Paris Air2 18
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