Results Presentation. Half Year Results ending 28 February 2013

Transcription

1 Results Presentation Half Year Results ending 28 February 2013

2 Contents Page Introduction Financial Results Operations Asset Management Looking Forward Additional Information Document Half Year Results name Presentation and description April 2013 here 2

3 Introduction Brentford Lock, Holiday Inn

4 Income focused property investment Portfolio and strategy focused on income within tightly defined business segments Each business segment supported by specialist and proven asset management teams Diversification provides exposure to different sources of income Ability to allocate capital to performing business segments Policy to distribute at least 90% of distributable earnings Document Half Year Results name Presentation and description April 2013 here 4

5 Results highlights Operating HY2013 FY2012 Change Occupancy (by area) 95.9% 95.5% ppt Indexation 58.4% 52.0% ppt WAULT (1) (years) (0.1) Income HY2013 HY2012 Change Distributable earnings ( m) % Distributable EPS (32.7%) Dividend per share (29.8%) Financial Position HY2013 FY2012 Change Adjusted NAV per share % Group LTV 51.2% 81.7% (30.5) ppt Successful 127.5m capital raise and improved capital structure Improvements in key operating metrics Distributable EPS ahead of post capital raising consensus Distributable earnings delivered off a substantially stronger capital base Investment of capital raising proceeds yet to be fully reflected Notes: (1) Excluding the Delta portfolio EPS figures reflect 962,855,467 ordinary shares outstanding as at 28 February 2013 following the capital raise Document Half Year Results name Presentation and description April 2013 here 5

6 Progress on corporate restructuring The anticipated changes to the corporate structure are aimed at delivering improved transparency, liquidity and access to capital Inward listing onto the Johannesburg Stock Exchange subject to South African Reserve Bank approval Simplified corporate structure to provide a single entry point to all shareholders Free float anticipated to increase to c.65% Redefine Properties Limited Minorities Potential index inclusion and improved liquidity c.35% c. 65% Proposed conversion to a UK REIT Proposals to internalise management under review Redefine International (LSE & JSE) Note: Structure and shareholding percentages are indicative only and subject to the proposed restructuring Document Half Year Results name Presentation and description April 2013 here 6

7 Brentford Lock, Holiday Inn Financial Results

8 Earnings available for distribution Gross rental income Operating expenses Income from associates (Cromwell) 1 and joint ventures 0.83 Fee & other income 0.04 Admin. expenses 0.22 Investment management fee 0.07 Net finance charges reduced to 40% of gross rental income, down from 59% in August 2012 Noncontrolling interest 0.12 Net finance charges 0.85 UK Stable Income, 37.7% UK Retail, 20.3% Europe, 17.5% Hotels, 24.5% Tax & FX loss 0.10 Distributable EPS 1.50 Notes: (1) Cromwell accounts for 0.68 pence per share (2) All figures are per share reflecting 962,855,467 shares outstanding as at 28 February 2013 Document Half Year Results name Presentation and description April 2013 here 8

9 Portfolio valuation Cromwell security price +29.8% in Sterling terms (+25.3% in $AUD) 86m Cromwell securities sold post period end to crystallise 12.9m profit and generate 52.8m of cash UK Retail values stabilised supported by successful lettings and investment European values declined 2.6% but benefitted from a stronger / exchange rate Exposure to UK Stable Income reduced to 175m (15.9% (1) of the portfolio) Portfolio valuation movement m Proportion of portfolio by value Market value 28 February 2013 Valuation movement H1 Net initial yield UK Stable Income 17.1% (6.1%) 7.5% UK Retail 22.1% % 7.5% Hotels 12.0% (0.1%) 7.0% Europe 19.3% % 7.9% Cromwell % % 8.4% Total like-for-like portfolio 87.2% % 7.7% Acquisitions 3 7.3% % 7.6% Total investment portfolio 94.5% % 7.7% Delta portoflio 5.5% 56.1 (8.7%) 12.6% Total portfolio (incl. Delta) 100.0% 1, % 8.0% Notes: (1) Reflects percentage of portfolio based on underlying share of Cromwell s assets (2) Cromwell reflects market value at the closing price of 94.0 Australian cents per security (3) Acquisitions include Earls Court, Kaiserslautern, Huckelhoven and additional Cromwell securities Document Half Year Results name Presentation and description April 2013 here 9

10 Adjusted NAV per share Pro-forma (1) Adjusted NAV (Aug 2012) EPRA NAV (Aug 2012) Impact of capital raise +10.7% Portfolio revaluation Distributable EPS Dividends Other items (2) EPRA NAV (Feb 2013) Delta negative equity 2.52 Gamma nonrecourse residual debt 4.83 Cromwell (3) 4.59 Adjusted NAV (Feb 2013) Notes: (1) August 2012 Adjusted NAV per share of pence adjusted for the issuance of 490,384,616 new ordinary shares at 26 pence per share and the subsequent 0.9:1 share consolidation (2) Other items include 16.4m related to the gain on the write-off of VBG debt on restructuring and 5.6m foreign currency translation reserve movements (3) Cromwell impact accounts for the investment in Cromwell at market value as opposed to the equity accounted net asset value reflected on the balance sheet (4) All figures are per share reflecting the fully diluted number of shares of 992,702,043 shares as at 28 February 2013 Document Half Year Results name Presentation and description April 2013 here 10

11 Debt position Group LTV reduced to 51.2% (43.6% excluding the Delta facility) See through LTV including share of JVs reduced to 61.9% (56.0% excluding the Delta facility) Debt maturity profile significantly enhanced to 8.2 years (excluding the Delta facility) Weighted average interest rate reduced to 4.3% (5.0% excluding the Delta facility) 99.9% of debt at fixed or capped rates Debt maturity profile ( m) m remaining Delta facility to be sold down (non-recourse) Credit approved terms received for renewal of 46.0m Zeta facility FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022+ Notes: (1) The Delta facility remains non-recourse to the Group and is subject to an agreed sales process which will be utilised to repay debt Document Half Year Results name Presentation and description April 2013 here 11

12 Operations VBG, Stuttgart

13 Portfolio overview Capital allocation to target performing sectors or asset specific opportunities Exposure to UK regional offices significantly reduced Recent and targeted future acquisitions to improve the quality of portfolio Sales of smaller non-core assets completed with more to come Gross rental income breakdown Attractive acquisition opportunities at advanced stages of negotiation Cromwell Property Group 30.0m 32.1% 15.1% UK Stable Income 14.1m Leveraging performance of existing assets through investment and redevelopment opportunities 21.9% UK Retail 20.5m Europe 17.9m 19.1% 11.9% Hotels 11.1m Notes: (1) Cromwell data reflects share of underlying portfolio as at 28 February 2013 St George s, Harrow Document Half Year Results name Presentation and description April 2013 here 13

14 Lease expiry profile Strong income visibility Indexation increased to 58.4% of portfolio rental income Exposure to regional offices and Government occupiers significantly reduced Lease expiry profile Gross income excl. Cromwell and Delta ( m) 37.7% UK Stable Income UK Retail Europe Hotels % of total 20.1% % 6.2% 7.1% % % % % % Notes: (1) Rental income reflects 100% of property assets including joint ventures Document Half Year Results name Presentation and description April 2013 here 14

15 UK Stable Income The portfolio has and continues to be restructured to provide exposure to high quality covenants, indexlinked leases and an increasing focus on Greater London and the South East Gross rental income Occupancy maintained (1) at 93.2% despite challenging market Evidence of increased occupier demand from small to medium private sector occupiers Inflation remains above target supporting cashflow growth from index linked leases Opportunities to redevelop well located assets and recycle capital in progress Other 4.2m 29.5% Lease expiry profile Gross rent ( m) % Government 7.4m Kwik Fit 1.1m 7.5% Petrol Filling Stations 1.5m 10.6% Notes: 1) Includes the Delta portfolio to provide a comparable figure to August 2012 of 93.3% Document Half Year Results name Presentation and description April 2013 here

16 UK Retail Improvements in key operating metrics Continued investment and asset management initiatives have been reflected in income and value stability Gross rental income Harrow 4.2m Valuations stabilised +1.0% vs IPD Shopping Centres (-4.9%) Net income +1.58% vs IPD (-1.9%) Footfall (-2.6%) vs Experian (-3.8%) Sales +2.0% (BRC index +1.1%) Occupancy 95.9% up 0.7% 8 new leases signed +14,000 sqft net increase Key letting to Nandos at St Georges, Harrow Crewe 0.9m 4% 21% 36% Wigan 7.4m Lease expiry profile Gross rent ( m) 8.1 Seaham 1.4m 7% 3.9 Birchwood 2.6m 13% 19% Coventry 3.9m Document Half Year Results name Presentation and description April 2013 here 16

17 Hotels Focused strategy on limited service branded hotels in London to capitalise on long-term growth in business and leisure demand Portfolio strengthened with acquisition of Earls Court Holiday Inn Express London market has seen a slow start to trading in 2013 but Company's portfolio is outperforming its peer group Gross rental income New InterContinental Group open lobby concept completed at Holiday Inn Brentford Lock Ongoing opportunities to leverage the management platform Earls Court 2.1m 18.9% 16.8% Brentford Lock 1.9m Reading 1.0m 9.4% 16.2% Southwark 1.8m 13.5% Park Royal 1.5m 14.5% 10.6% Limehouse 1.2m Royal Docks 1.6m Brentford Lock, Holiday Inn Document Half Year Results name Presentation and description April 2013 here 17

18 Europe The European portfolio continues to be a highly cash generative investment supported by strong covenants on index-linked leases Gross rental income The Netherlands 1.9m VBG restructuring completed delivering 19% cash on cash returns 18.0m acquisition of two further German convenience retail centres completed in joint venture with pension fund partner Further investment opportunities at advanced stages of negotiation Cashflow growth supported by inflation-linked leases Switzerland 1.4m 8.0% 10.8% Lease expiry profile Gross rent ( m) % Germany 14.5m Document Half Year Results name Presentation and description April 2013 here 18

19 Cromwell Cromwell is well positioned to deliver on its growth strategies with A$198m of cash available for acquisitions Results for 6 months to 31 December 2012 Operating earnings increased by 24% to A$45.9m Growth in distributions of 3% Gross rental income Other 0.9m Distribution of cps for H1 with guidance of 7.25 cps for full year Redefine International holding of 22.01% (reduced to 16.12% post period end) New South Wales 6.1m 20% 3% 28% Queensland 8.5m Completed acquisition of unlisted Cromwell Property Fund Gearing reduced from 51% to 44% LTV 23% ACT 7.0m 25% Victoria 7.5m Notes: (1) Cromwell data reflects share of underlying portfolio as at 28 February 2013 Quantas GlobalHeadquarters, Sydney Document Half Year Results name Presentation and description April 2013 here 19

20 Asset Management Southwark, Holiday Inn Express

21 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 Jan 2013 Feb 2013 Mar 2013 Cromwell Share Price AUD Cromwell Identified as an undercapitalised company at the bottom of the cycle with a strong management team Provided strategic support as a cornerstone shareholder and underwriter to raise growth capital Remain a strategic shareholder (16.1%) (1) together with parent company (10.0%) 1.40 Cromwell Cromwell (GBP) ASX 200 Closing Share price (AUD) +27.0% since entry Share price (GBP) % since entry 1.20 Initial acquisition of 12.97% at $0.70 Share price of $1.04 as at 22 April 2013 Supported capital raising at $ Supported placement and rights issue at $0.72 $0.75 Supported rights issue at $0.71 Supported entitlement offer at $0.68 Sale of 84.5m securities between $0.90 and $ Notes: 1) Shareholding post period end reflecting the sale of 85m securities Document Half Year Results name Presentation and description April 2013 here 21

22 Birchwood Redevelopment 50,000 sqft extension and refurbishment 6.0m investment programme largely complete Extension anchored by Home Bargains (20,000 sqft) and QVC (9,000 sqft) Securing Birchwood s role as a dominant, out of town value and convenience centre Extension has enabled the centre to be anchored at both ends Document Half Year Results name Presentation and description April 2013 here 22

23 Seaham Dominant value and convenience centre anchored by ASDA Scheme five years old with opportunities for further investment Retail demand has driven Redefine International to progress development extension Currently in pre-application discussions with the supportive Durham Council Options to extend within existing ownership Document Half Year Results name Presentation and description April 2013 here 23

24 St Georges Harrow Town centre scheme anchored by one of Vue s most successful cinemas 2.2m refurbishment project to modernise the scheme in progress Leasing plan focused on food and beverage to reposition the centre as the leisure and shopping destination of choice in the catchment New Nandos (3,500 sqft), spending 1m on a fit-out New Pizza Express (2,859 sq ft) McDonalds extended and comprehensively refurbished Vue Cinema, Prezzo and TK Maxx refurbished New family orientated national multiple restaurant, young fashion store and café in solicitors hands New H&M kids and Deichmann store Five further new retailers and/or shop fits planned Document Half Year Results name Presentation and description April 2013 here 24

25 Harrow residential conversion Planned conversion of vacant office site to residential led mixed use scheme Site value enhanced through land assembly and successful planning application for 238 private residential units and approximately 30,000 sqft of commercial space Partnered with Metropolitan Housing Trust to agree the provision of 49 affordable units Document Half Year Results name Presentation and description April 2013 here 25

26 Southwark Holiday Inn Express Forwarding funding of 50 bedroom extension Planning for an additional 10 rooms and upgrade to external facade submitted Improving location with significant investment and redevelopment of the surrounding area anticipated Document Half Year Results name Presentation and description April 2013 here 26

27 Brentford Lock, Holiday Inn Looking Forward

28 Looking Forward Finalise proposed corporate restructuring subject to necessary approvals Progress conversion to a REIT and management internalisation Continue to improve the quality of the portfolio and long term income security and growth potential Selective redevelopment and investment into existing assets to support income growth Compelling acquisition opportunities at advanced stages of due diligence Continue to recycle capital across the portfolio into performing sectors Document Half Year Results name Presentation and description April 2013 here 28

29 Additional Information Crowne Plaza, Reading

30 Business Segments Portfolio Metrics Group Europe Gross asset value 1,046.8m Gross asset value 213.5m Gross rent 93.6m Gross rent 17.9m ERV 89.9m ERV 14.5m Ave. rent per sq. ft Ave. rent per sq. ft 10.8 Net intial yield (%) 7.7 Net intial yield (%) 7.9 Occupancy (by area) 95.5% Occupancy (by area) 99.0% Total area (sq. ft '000) 6,560 Total area (sq. ft '000) 1,661 No. of assets 151 No. of assets 37 WAULT 8.5 WAULT 8.0 UK Stable Income Hotels Gross asset value 175.4m Gross asset value 150.2m Gross rent 14.1m Gross rent 11.1m ERV 13.4m ERV 11.1m Ave. rent per sq. ft 8.5 Ave. rent per sq. ft 38.6 Net intial yield (%) 7.5 Net intial yield (%) 7.0 Occupancy (by area) 91.0% Occupancy (by area) 100.0% Total area (sq. ft '000) 1,651 Total area (sq. ft '000) 288 No. of assets 75 No. of assets 7 WAULT 9.2 WAULT 10.3 UK Retail Cromw ell Property Group Gross asset value 226.3m Gross asset value 281.4m Gross rent 20.5m Gross rent 30.0m ERV 20.9m ERV n/a Ave. rent per sq. ft 12.8 Ave. rent per sq. ft n/a Net intial yield (%) 7.5 Net intial yield (%) 8.4 Occupancy (by area) 95.9% Occupancy (by area) 94.9% Total area (sq. ft '000) 1,602 Total area (sq. ft '000) 1,358 No. of assets 6 No. of assets 26 WAULT 11.0 WAULT 6.0 Notes: (1) Gamma portfolio assets excluded following deconsolidation (2) Excludes Delta assets valued at 56.1m at a net initial yield of 12.6% Document Half Year Results name Presentation and description April 2013 here 30

31 Document Half Year Results name Presentation and description April 2013 here 31

32 Contacts Mike Watters Chief Executive Officer, RIPML t: +44 (0) e: Redefine International P.L.C. Top Floor, 14 Athol Street Douglas Isle of Man IM1 1JA t: +44(0) Stephen Oakenfull Chief Operating Officer, RIPML t: +44 (0) e: Redefine International Property Management Limited 2nd Floor, 30 Charles II Street London SW1Y 4AE t: +44 (0) Document Half Year Results name Presentation and description April 2013 here 32