INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016 1
AGENDA OVERVIEW AND HIGHLIGHTS FINANCIAL RESULTS STRATEGIC UPDATE + DEVELOPMENT AND TRADING PORTFOLIO + INVESTMENT PORTFOLIO + SPECIALIST PLATFORMS SUMMARY APPENDICES + APPENDIX 1: OVERVIEW + APPENDIX 2: FINANCIALS + APPENDIX 3: PORTFOLIO STATS + APPENDIX 4: ECONOMIC CHARTS 2
OVERVIEW AND HIGHLIGHTS 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 3
HY2017 HIGHLIGHTS ENCO COURA RAGING Development and trading guidance reassessed PROGRE RESS M MADE ADE + £11.5m of development and trading gains in H1 (H1 guidance £8m) with £11m secured in DE DESPITE H2; £22.5m in the year to date CH CHALLE ALLENGING + EPRA NAV at 272p – after payment of supplemental dividend; development and trading ENVI VIRONMENT portfolio reported at cost (will mark to market from end of FY2017) + Investment portfolio value of £180.1m (initial yield maintained at c7%) – disposals of £17.0m, valuation decline of £7.9m (including share of JVs) + Overheads: targeting a contribution of £2m in FY2018 through a reduction in recurring overhead and from net management fees from specialist platforms + Interim dividend maintained at 2.4p per share PROGRE RESS ON ON Major regeneration project wins in core regions STRA RATEGIC + Focus on fewer, larger mixed-use regeneration projects: 8 Albert Embankment, Cockpit INITIATIVE VES Yard, Westminster Industrial Estate (London City Region) and Mayfield (Manchester) + Good visibility on trading profits in next few months + Investment portfolio impacted by EU referendum; conditions improved in recent weeks despite ongoing economic and political uncertainty + Repositioning investment portfolio to align to Group’s focus on regeneration + Creating specialist platforms for growth and efficiency 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 4
FINANCIAL RESULTS 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 5
HY2017 PERFORMANCE HY2017 Y2017 HY 2016 FY2016 £11.5m Development and trading gains £12.5m £51.1m £340.8m (1) EPRA Net Asset Value (NAV) (2) £342.7m £363.5m £340.5m (1) Basic NAV £342.9m £363.3m 272p (1) EPRA NAV per share 274p 291p 272p (1) Basic NAV per share 274p 291p (£11.7m) (Loss)/Profit before tax £1.4m £25.8m (1.8p) EPRA (loss)/earnings per share 0.4p 17.1p (9.9p) Basic (loss)/earnings per share 0.4p 17.1p 2.4p Dividend per share (in respect of period reported) 2.4p 5.9p - Supplemental dividend per share declared - 8.0p £128.0m Net debt £203.3m £161.4m 37.6% Gearing 59.2% 44.4% (1) After payment of supplemental dividend (£10.0 million/8p per share) – declared for FY2016 and paid in June 2016. (2) The development portfolio is reported at the lower of cost and net realisable value at the end of August; a full EPRA NAV will be reported at the end of the financial year to value the development and trading assets at fair value. 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 6
MOVEMENT IN EPRA NAV THROUGH THE PERIOD NOTE: Development and trading assets not revalued, held at lower of book cost or net realisable value. 295 291 290 3.5 Valuation reduced by 4.6% on a 285 like for like basis 8.0 Pence per share 2.6 8.5 9.2 280 279.5 6.3 275 3.3 0.1 1.1 272 270 265 EPRA NAV Final Supplemental Adjusted Investment Property Development Operating Net interest Taxation Other EPRA NAV Feb 2016 dividend dividend EPRA NAV portfolio revaluations & trading costs costs Aug 2016 FY2016 FY2016 contribution contribution 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 7
ANTICIPATED GAINS TO FY2019 Full year guidance reassessed to a range (to allow for impact of uncertain market trading conditions) 3 - 5 year target + £50m plus pa + 12% post-tax total return* £m £155 - £175m 80 72 70 65-70 63 60 55-65 50 42 40 35-40 30 51 46 20 11 27 10 11.5 0 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Realised gains (H1) Realised gains (H2) Expected gains Revised guidance (October 2016) Previous guidance (April 2016) *Total returns: the growth in our basic net asset value including dividends 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 8
OUTLOOK FOR FY2017: DEVELOPMENT AND TRADING GAINS Previ Previous (1) Forec recast (2) Realised Forec recast (2) Projec roject t name me FY17 FY17 H1/1 H1 /17 H2 H2/1 /17 Profit Prof t tr trigger Letting: 90% of office space, impacted by EU 12 Hammersmith Grove – – – £10m referendum (FY2018) Dublin: Entire building under offer (Oct-16) triggering profit The Vertium Building – – £4-5m £4-5m payment entitlement Percy Place (sold); Beacon & Nutgrove (sold); Other £7m £5-6m £3m £2-3m Robswall (sell remaining units); Pembroke Road (sale of consented site) Exchange of contracts (Phase 1); secure planning Maidstone £4m £2-4m £2-4m and sell Phase 2 (BTR) Ashford (Powergen site) – £3m £4m £4m Site disposal completed Secure planning and sell consented residential site; The Old Vinyl Factory – – – £3m funding and letting of Record Store building (FY2018) Planning secured, contracts exchanged, completion Birmingham International Park – £2m £8m £8m subject to JR only (Nov-16) Sale of consented site marketing commenced, Norwich – – – £2m impacted by EU referendum (FY2018) Woking £2m £2-6m £2m £0-4m Secure planning and sell Other (8 projects) £9m £8m £2.5m £5.5m Guidance £42m £35 - 40m £11.5m £23.5 - 28.5m (1) Previous guidance (April 2016) (2) Revised guidance (October 2016) 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 9
DEBT FINANCE FY2016 FY2016 HY2017 £m £m £m 177.3 Gross debt 213.3 (49.3) Cash (51.8) 128.0 Net debt 161.5 37.6% Gearing 44.4% 44.1 Share of net debt in joint ventures 43.6 172.1 Net debt including joint ventures 205.1 50.5% Gearing including joint ventures 56.4% Analysis of gross debt (excluding JVs) 41.7% Fixed rate 35.1% 37.8% Capped / SWAP 30.1% 20.5% Floating rate 34.8% 5.0% Weighted average interest rate 4.9% 4.8 years Weighted average maturity 4.5 years 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 10
DEBT MATURITY PROFILE 80 70 70 60 60 50 50 40 £m £m 40 69.5 31.4 30 30 40.0 20 20 22.7 27.9* 10 10 2.5 8.7 8.3 0 0 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Feb-24 Feb-25 Feb-26 Corporate Drawn - Investment Drawn - Development *Terms of refinance agreed ** On Balance Sheet 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 11
IMPROVING BUSINESS EFFICIENCY Overhead Analysis Efficiency Gains FY2018 HY2017 £m £m Reduction in recurring overhead (1) 1.0 Core recurring overhead (1) 9.5 Platform management fees 1.9 LTIP charge 0.8 Offsetting costs (0.9) Close down historic tax structuring 0.4 Net management fees (2) 1.0 10.7 2.0 (1) Targeting a 5% reduction in FY2018 (2) Across specialist platforms + Reduction in recurring overhead (from FY2018) + Additional revenue – net management fees from specialist platforms and major schemes 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 12
FINANCIAL HIGHLIGHTS H1 gains ahead of expectation with good progress and clear visibility on H2 pipeline Anticipated gains from secured pipeline of £155-175m to FY2019; target over £50m of development and trading gains per annum, with a 12% post-tax annual return (within 3 – 5 years) Business efficiencies of £2m in FY2018 through overhead reduction and net management fees from specialist platforms Strong balance sheet and focus on capital efficiency 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 13
STRATEGIC UPDATE 03/04 – OVERVIEW AND HIGHLIGHTS 05/13 – FINANCIAL RESULTS 14/31 – STRATEGIC UPDATE 32/33 – SUMMARY 34/55 – APPENDICES 14
Recommend
More recommend
