Atlantic Leaf Properties Limited Six months ended 31 August 2017 - PowerPoint PPT Presentation

Atlantic Leaf Properties Limited Six months ended 31 August 2017

Atlantic Leaf Proposition • Secure and regular income flows • Long leases in place Strong underlying • Good prospects for rental growth in the next few years: property • Contractual, upward only rent reviews fundamentals • RPI linked leases will escalate with higher UK inflation, currently at 2.9% • 100% occupancy • Strong tenant covenants Low risk in our • No vacancies foreseen portfolio • No requirements for tenant improvements or rent-free periods • Debt cost still well below property yield Benefitting from • Long leases give comfort on 50% LTV level low UK interest • The forecast is for interest rates to remain fairly low for a longer period environment • 76% of debt hedged against interest rate increase • First year (2016) 7 pence Attractive regular • Second year (2017) 8.5 pence (21% growth) distributions • Third year (2018) 9.1 pence target (7.1% growth forecast) Solid growth in distributions is being achieved 2

September Activity Capital Raise and Investments Capital raise of £47m, increasing the NAV by 30% Will need shareholder approval to issue further shares Investments DFS JV with London Metric £25m Listed REIT equity portfolio £7m Cash for further direct property investment £15m Vukile Mandatory Offer Triggered by going through 30% on SEM Vukile currently hold 34.9% Waivers obtained from approx. 58% of shareholders Procedural process to follow Vukile support has been key to growth 3

Atlantic Leaf at a glance Key Property Portfolio Statistics – Post Capital Raise & DFS Transaction AUM* Assets Weighted average LTV* asset yield £335m 59 properties 45.6% 7.4% 15 Tenants Equity WAULT Vacancy Average cost of debt £196m 11.2 years 0% 3.2% Growth in Assets Under Management Portfolio composition – Post DFS (Proportional %) Retail Warehouse £ 335m 14% £304m £ 304m £ 264m £ 195m Office £ 131m £ 143m£ 158m 22% Industrial warehouse/ £ 68m logistics £ 50m 64% £ 27m Apr-14 Mar-15 Jun-15 Jul-15 Oct-15 Nov-15 Feb-16 Oct-16 Feb-17 Aug-17 Sep-17 • DFS will be equity accounted 4 • On a gross proportional look through, AUM: £357 & LTV: 50.5%

Distributions Distribution profile 9.1p 4.3 pence final dividend – February 17 2018 4.5 pence interim dividend – August 17 2017 8.5p Forecast dividend of 9.1 pence – an increase of 7.1% 2016 7.0p 0 2 4 6 8 10 Interim Final Forecast Focus on continual growth in distributions All distributions from cash earnings 5

Proforma Balance Sheet 31-Aug-17 Post 31-Aug-17 £’m £’m Investment Properties 303.4 303.4 Investment in Joint Venture - 24.3 Listed REIT’s 0.7 7.0 Cash 7.2 24.7 Interest bearing debt (151.3) (153.6) Fair value of derivatives (1.7) (1.7) Other net assets/(liabilities) (2.9) (2.9) Net assets 155.4 201.2 NAV per share £1. 09 £1.07 6

Increasing Trade & Liquidity Shares in issue/New shares added Total number of shareholders 200 450 395 46 400 ALP Shares (m) 150 324 350 19 290 100 300 189 143 250 216 123 50 200 150 - 100 29-Feb- Added in 28-Feb- Added in 30-Sep- 16 FY 17 17 FY 18 17 50 0 Closing shares in issue (m) Shares added (m) 28-Feb-16 31-Aug-16 28-Feb-17 31-Aug-17 Liquidity & Free Float Average number of shares traded per day 80,000 69,089 70,000 34% 33% 60,000 51,952 50,000 40,000 FY 2017 YTD 2018 30,600 30,000 21,597 17,134 20,000 10,000 67% 66% - 31-Aug-16 30-Nov-16 28-Feb-17 31-May-17 31-Aug-17 Tightly held Free float Tightly held 7

Key Objectives Key Objectives Current Position £150m by Feb 2016 £300m by Feb 2017 £47m raised in September 2017 Target 20-30% growth in AUM subject to AUM AUM of £335m at September 2017 - Opportunities that fit Grow the company Good pipeline of opportunities in place - Appropriate yields - Raising new capital Diversification Shareholder Improved trading liquidity (34% free float) Attract more institutional investors Number of shareholders increasing steadily Increase trading liquidity Deliver performance Distribution 2016: 7.0 pence 2016: 7 pence 2017: 8.5 pence 2017: 8.5 pence 2018: Initial Projection 8.9 pence 2018: Revised Forecast 9.1 pence Notes: 8

Results for the six months ended 31 August 2017

Financial Highlights 6 months 6 months Revenue ended 31- ended 31- +18% Aug-17 Aug-16 Revenue £11.4m £9.7m Distributable Earnings +12% Distributable earnings £6.4m £5.7m Adjusted Earnings per share 4.51 pence 4.57 pence Dividends +7.14% Dividend per share 4.5 pence 4.2 pence NAV per share 1.09 1.09 Solid growth 10

Key Financial Metrics Loan to Value Interest Cover Cost of Debt Debt Maturity Debt Hedged Ratio Ratio (%) (Years) (%) (%) 3.5% 60% 4.5 80 4.0 76 4.2 74 3.2% 3.2% 3.2% 4.0 52% 3.4 4.0 50% 3.5 70 3.0% 63 50% 3.5 2.9 60 3.0 2.5% 39% 40% 3.0 2.4 50 2.5 2.6 2.0% 2.5 40 30% 2.0 2.0 1.5% 30 1.5 20% 1.5 1.0% 20 1.0 1.0 10% 0.5% 10 0.5 0.5 - - 0% - 0.0% Feb-16 Feb-17 Aug-17 Feb-16 Feb-17 Aug-17 Feb-16 Feb-17 Aug-17 Feb-16 Feb-17 Aug-17 Feb-16 Feb-17 Aug-17 11

Statement of Comprehensive Income For the 6 For the 6 months ended months ended 31-Aug-2017 31-Aug-2016 £’m £’m Net rental income 11.4 9.7 Property Operating expenses (0.4) (0.4) Net operating expenses (1.1) (0.7) Finance costs (2.5) (2.2) Tax Expense (1.0) (0.7) Adjusted Earnings/Distributable earnings 6.4 5.7 Once-off transaction costs - 0.4 Reported Profit 6.4 5.3 12

Statement of Financial Position 31-Aug-2017 31-Aug-2016 £’m £’m Investment Properties 303.1 263.7 Cash 7.2 5.1 Interest bearing debt 151.3 134.1 Fair value of derivatives 1.7 3.0 Other net assets/(liabilities) (1.9) 3.6 Net assets 155.4 135.3 NAV per share £1.09 £1.09 13

Our Portfolio

UK property market Industrial logistics and warehousing remains in vogue with further yield compression and upward rental growth trajectory UK industrial logistics properties remains in vogue for Industrial transaction volumes ¹ local and foreign investors Demand remains for secure, long term income Investment volumes in the industrial sector up on 2016 highlighting the renewed strength post Brexit Yield compression evident in the market and rental growth continues its upward trajectory on the back of strong occupier demand and limited supply of new accommodation Segments of the market beginning to look fully priced, with investors also looking to retail, office and alternative sectors for opportunities Real estate market indicators ² All industrial 12 month market rental value growth ³ Indicator Date Rate/Yield Trend GDP Q2 2017 0.3% Upwards BOE base rate Sep 2017 0.25% Flat RPI inflation rate Aug 2017 3.9% Upwards Prime distribution Sep 2017 4.85% Lower Good Secondary Industrial Sep 2017 5.75% Lower ¹ Property data/Knight Frank 15 ² CBRE, ONS ³ IPD

Property portfolio 100% occupied, long term cash flows supported by strong tenant covenants Salient details Sector spread 14% 31 Aug 2017 30 Sep 2017 Property AUM ( £’m) 303 350 No. of properties 48 59 No. of tenants 14 15 22% Property forward yield 7.3% 7.4% 64% WAULT (Years) 11.1 11.2 Vacancy 0% 0% Industrial warehouse/logistics Office Retail Warehouse Tenant classification Regional spread 3% 2% 2% 2% 3% 2% 4% 18% 3% Booker exposure 3% 7% 31% * 3% 5% 4% 10% 5% 17% DFS exposure 5% 12% 15% 7% 15% 14% 7% 13% 8% North East North West West Midlands South West Booker DFS Santander Halfords DHL East Midlands Scotland York. & the humber South East Epwin Thomas Cook E. ON Inspirepac Gestamp East Anglia Wales EE P&H Bauer Robert McBride Homebase Note: Graphs illustrate the property portfolio as at 30 Sep 2017 (post DFS transaction) 16 * Booker exposure diversified across 31 assets

DFS acquisition Yield accretive strategic stake in a retail warehouse and industrial portfolio Salient details JV structure Total portfolio value (£’m) 104.5 Shareholders LondonMetric controlled entity (55%) Atlantic Leaf (45%) Atlantic Leaf holding 45% LTV 50% Net rental income (£’m) 8.4 Debt outstanding (£’m) 51 Tenant covenant DFS Trading Limited Debt maturity July 2019 No. of assets 11 Interest rate 3 month Libor + 275 bps Area (sq ft) 436,615 Hedging Interest rate cap at 3.5% Location United Kingdom WAULT (years) 12.6 Cash on cash return (50% gearing) ¹ 9.29% Investment highlights ▪ Strategic JV partnership with LondonMetric, a leading UK property company ▪ Yield accretive acquisition ▪ Investment vehicle to grow JV partnership with LondonMetric ▪ Pipeline of opportunities to acquire further assets/grow the income stream ▪ DFS has a 5A1 Dun & Bradstreet credit rating (the most secure rating on the risk scale) ▪ Net ALP investment after gearing of £24 million DFS Head Office, Doncaster United Kingdom ¹ Cash on cash return after taking into account transaction costs and UK tax 17