FULL YEAR RESULTS YEAR TO 30 th NOVEMBER 2012 PRESENTATION Agenda - PowerPoint PPT Presentation

FULL YEAR RESULTS YEAR TO 30 th NOVEMBER 2012 PRESENTATION

Agenda 1. Highlights 2. About St. Modwen 3. Financial Results 4. Operational Review 2

Highlights Financial Operational • 8% increase in NAV per share to 251p (Nov 2011: • Valuation gains of £48m (2011: £33m) generated 232p). EPRA NAV per share up 9% to 272p (Nov through active asset management and planning 2011: 250p) gain offset £20m market driven valuation loss (2011: £1m gain). Net valuation increase of • 12% increase in net trading profit to £25.5m (2011: £28m (2011: £34m) £22.8m) • Strong performance from residential land and • 22% increase in realised property profits to house sales; outlook good £29.0m (2011: £23.8m) • Development agreement signed for £2bn New • Profit before all tax £52.8m (2011: £51.7m) Covent Garden Market scheme – an extremely • 10% increase in total dividends to 3.63p per share positive, high profile London opportunity • Successful £80m retail bond issued October 2012 • Agreed terms with Swansea University for the provision of the £150m first phase of the New Science and Innovation Campus. To be delivered on St. Modwen’s 65 acre Transit site Milestones achieved with considerable potential for future growth 3

About St. Modwen Properties PLC • The UK’s leading regeneration specialist: • Residential development: Residential income Wholly focused upon regeneration stream experiencing strong growth via three routes – residential land sales, Persimmon joint • An established business: A FTSE250 company venture and St. Modwen Homes with a 25 year track record • Commercial development: Consistent long- • Experienced management team: Extensive term, high-value commercial redevelopment operational expertise in regeneration and activity. A strong pipeline of development brownfield renewal opportunities • A stable and growing business with a solid • Diverse UK-wide portfolio and long-term balance sheet: A property portfolio of £1.1bn with development: Land bank of over 5,800 acres. a see-through loan-to-value ratio of 41%. No No over-exposure to any single scheme, tenant facilities expiring before November 2014 or sector • Running costs underpinned by recurring • Active management to increase portfolio revenue streams from a £562m portfolio of value and to reduce development risk: income producing assets: Net rental income Through planning gains, pre-let and pre-sold has grown steadily since 2008 and typically opportunities and increasing the number of covers the running costs of the business design and build projects An established, stable business and the leader in its field 4

How we generate value Property valuation increases through Ratio of rental and other income to Continuous delivery of property active management operating costs including interest profits £m £m % 30 29.0 70 100 25 102 60 97 97 65 23.8 92 80 89 20 21.9 50 20.9 60 48 40 15 30 40 10 33 20 27 20 5 7.6 18 10 0 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Strong recurring incomes complemented by active asset management and property profits 5

St. Modwen’s business model Invest Dividend Assets St. Modwen payment Income Commercial Receive cash Residential producing land and 37% 51% development 12% Persimmon JV, Land St. Modwen Homes, Regenerate Regenerate Remediate Scheme either pre-sold or Generate marketed income and cover costs Construction expertise Planning and change of use expertise Development Finished scheme - add value through the planning process schemes Business model generates regular income and drives portfolio value 6

FINANCIAL RESULTS 7

Financial Highlights • Post dividend, shareholders’ equity NAV up 8% to 251p (Nov 2011: 232p) • EPRA NAV up 9% to 272p (Nov 2011: 250p) • Continued growth in net rental income to £36.2m (2011: £35.5m) • Trading profit up 12% to £25.5m (2011: £22.8m) • Profit before all tax £52.8m (2011: £51.7m) • Dividend up 10% to 3.63p per share for the year (2011: 3.3p per share) • Gearing 71% (Nov 2011: 73%) • Successful £80m retail bond gives substantial headroom in facilities Another positive year in building the business for future growth 8

Profit and Loss Full Year 2012 Full Year 2011 Total £m Total £m Net Rental Income 336.2 35.5 Property Profits 129.0 23.8 Other Income 2.8 3.2 Overheads (18.6) (16.7) Operating Profit 49.4 (+8%) 45.8 Interest (23.9) (23.0) Trading Profit 25.5 (+12%) 22.8 Added Value Property Valuation Gains 48.3 32.9 Market Property Valuation Movement (20.3) 1.0 Other Finance Charges (0.7) (5.0) Profit Before All Tax 52.8 (+2%) 51.7 Continued focus on generating value across the land bank while working our income producing assets hard 9

Income producing portfolio Increasing net rental income • A £562m portfolio of income producing assets (51% of total portfolio) £m 40 36.2 35.5 • Expertise in managing sites to generate income that 33.2 33.5 33.7 35 typically covers the running costs of the business 30 25 20 • Affordable rents on flexible leases 15 10 17.8 18.3 17.1 17.4 16.7 • Investment properties at high yields with an 5 equivalent yield of 9.2% on income producing 0 2008 2009 2010 2011 2012 properties HY FY Strong and consistent rental revenue stream 10

Income producing portfolio Occupancy rates • Diversified rent roll and tenant base: – Over 100 commercial properties and 1,700 tenants % spread across regions and sectors 100 – Largest tenants are sound covenants 88 88 80 87 84 83 • High level of churn, but good level of occupancy 60 maintained through to redevelopment 40 • Average rental lease length of 5.0 years at Nov 2012 (Nov 2011: 4.6 years) 20 • Voids deliberately maintained on properties being 0 prepared for redevelopment as vacant possession is 2008 2009 2010 2011 2012 required Diversified tenant base with consistent occupancy rates 11

Rental income and recurring costs 30 November 2012 30 November 2011 £m £m Rent Roll at Start of Period / Year 346.4 45.7 Acquisitions / (Disposals) (2.8) 0.3 43.6 46.0 Tenant Vacations (6.9) (6.6) £m Tenant Administrations (1.4) (0.2) Coverage of business running costs 50 Rent Reviews 0.6 0.1 42.5 41.2 39.7 39.0 38.7 New Lettings 9.7 7.1 36.8 Closing Rent Roll 45.6 46.4 Void Percentage 13% 12% 0 2010 2011 2012 Net Rental Income 36.2 35.5 Other Rental Style Income 2.8 3.2 Rental Income Business Running Costs 39.0 38.7 Overheads and Interest (42.5) (39.7) % Coverage 92% 97% Rental income underpins running costs of the business 12

Strong balance sheet 30 th November 2012 £m 30 November 2011 £m Property assets 946 1,040 82 57 Investments in JVs and other assets Debtors 68 60 - - Pensions Gross assets 1,096 1,157 Debt (366) (347) Trade payable etc. (216) (334) Gross liabilities (582) (681) Net assets 514 476 Non-controlling Interests (11) (12) Shareholders’ Funds 503 464 NAV per share 251p (+8%) 232p EPRA NAV per share 272p (+9%) 250p A solid business with a robust balance sheet 13

NAV movements £m 550 48 (20) (7) (7) (43) 39 503 500 29 464 450 At Nov 2011 Net Rents & Other Overheads & Development Profit Value Added Underlying Dividend Tax / Other At Nov 2012 Income Interest Valuation Movements Movement Active management and increased residential / South East focus driving valuation gains 14

Net debt movements £m 540 (122) 129 490 440 (9) 14 390 (35) (27) (374) 31 (366) (347) 340 290 240 At Nov 2011 JV Debt Taken Like For Like Net Rents & Overheads & Tax & Working Acquisitions & Disposals Nov-12 On Nov 2011 Other Income Interest Dividends Paid Capital Capex Debt levels not expected to increase 15

Facilities Group Facility • Successful £80m Retail Bond issue • Substantial facility headroom • All corporate facilities extended until at least November 2014 Other JV Facilities • New £135m KPI facility in place. Five year term from Lloyds, RBS and Santander to 2017 • Wembley facility now consolidated into the Group • New Uxbridge facility with HSBC. £60m amortising over five years. Matches £60m land sale to Persimmon Future Facilities • Continue to explore options for asset specific funding and alternative sources of finance in the longer term Proactive management to enhance robust financing 16

Financial resources - Group Nov Nov 2012 2011 See-through loan-to-value Net debt £341m £347m % Wembley JV now consolidated £25m £27m 100 £366m £374m 80 Average facility maturity (years) 3.4 3.5 60 Weighted average interest rate 5.6% 5.6% 40 46 42 41 2.1x 2.0x Interest cover - Actual 40 39 20 - Covenant 1.25x 1.25x 0 71% 79% Gearing - Group (including Wembley) 2008 2009 2010 2011 2012 - Covenant 175% 175% - See-through including share of JVs 87% 91% % Debt hedged (excl. VSM, inc. Retail Bond) 93% 86% Loan-to-value – Group 40% 38% - See-through including share of JVs 41% 40% Sound financial base with significant headroom on existing facilities 17