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Audited Preliminary Results for the year ended 31 December 2019
Capital & Counties Properties PLC
(Incorporated and registered in the United Kingdom and
Wales with registration Number 07145041 and registered in
South Africa as an external company with Registration
Number 2010/003387/10)
JSE code: CCO
ISIN: GB00B62G9D36
26 February 2020
CAPITAL & COUNTIES PROPERTIES PLC (“CAPCO”)
AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019
Ian Hawksworth, Chief Executive, commented:
“Capco looks forward to the next phase of growth, with a strategic focus on the West
End and Covent Garden, where we have created a world-class estate. As a strongly
capitalised REIT, with access to substantial liquidity, Capco is well-positioned to
take advantage of investment opportunities whilst also offering resilience during
periods of economic uncertainty. Our creative approach to leasing and asset management
continues to contribute to increased footfall and tenant sales at Covent Garden,
giving us confidence in the long-term prospects of the business to deliver superior
total returns to our shareholders.”
Key financials
- Equity attributable to owners of the Parent of £2.5 billion (2018: £2.7 billion)
- EPRA NAV 293 pence per share, a decrease of 10 per cent (2018: 326 pence per share
and Jun 2019: 315 pence per share), driven primarily by Earls Court and Covent
Garden valuation movement
- Total property value £2.8 billion, a decrease of 1.7 per cent (like-for-like)
(2018: £2.8 billion adjusted for the sale of Earls Court interests)
- Underlying EPS 1.0 pence per share (2018: 0.9 pence per share)
- Proposed final 2019 dividend of 1.0 pence per share resulting in a full-year
dividend of 1.5 pence per share
- Total shareholder return of 14 per cent in 2019
Strong balance sheet with significant financial flexibility
- Sale of Capco’s interests in Earls Court for £425 million, enhancing financial
flexibility and positioning Capco to capitalise on investment opportunities
- Current group loan to value of 16 per cent, before receipt of Earls Court deferred
consideration (2018:18 per cent)
- Group cash and undrawn facilities £895 million (2018: £854 million)
- Group net debt £442 million (2018: £573 million), with capital commitments of £14
million (2018: £53 million)
- Weighted average debt maturity of 4.9 years (2018: 6 years) and weighted average
cost of debt of 2.97 per cent (2018: 2.92 per cent)
- Intention to grow dividend distributions in line with progression in underlying
earnings
- Return of capital of up to £100 million through share buyback programme this year
Covent Garden
An active year across the estate; average sales and footfall continue to trend upwards
- Continued growth in net rental income, up 1.8 per cent (like-for-like) and 7.0 per
cent in absolute terms
- Robust demand across all uses; 92 new leases and renewals, representing £17.4
million contracted income transacted at 1.3 per cent above 31 December 2018 ERV
- 13 new brands opened across the estate including Lacoste, Polo Ralph Lauren, VyTA
and Glossier
- Expansion and investment by global brands, including upsizing of Bucherer and
extension of Apple lease
- High occupancy, renewal rates and strong demand for offices and residential
Resilient performance
- London’s West End has proved to be more resilient than the wider UK market but is
not unaffected
- Total property value of £2.6 billion, a decrease of 1.4 per cent (like-for-like)
(2018: £2.6 billion) driven by positive performance across the estate, offset by
negative adjustments at Long Acre and James Street
- ERV broadly stable, -0.1 per cent (like-for-like) to £108 million (2018: £108
million)
- Equivalent yield up 6 basis points to 3.65 per cent (2018: 3.59 per cent)
- Initial yield moved from 2.4 per cent to 2.5 per cent as the reversionary potential
continues to be captured
- EPRA vacancy remains stable at 3 per cent (2018: 3 per cent) with a small number of
units available for letting
Strong track record of investment activity
- Accretive investment and aggregation of ownership of Covent Garden estate
generating £1.2 billion of value since 2010
- Award winning Floral Court residential new-build apartments fully sold for £100
million of cumulative proceeds
- Over £70 million invested in 2019 through targeted acquisitions on the southern
side of the estate and pipeline of additional opportunities under review
Other investments
- Sale of Capco’s interests in Earls Court for £425 million, in line with long-term
strategy
- Deferred consideration of £210.4 million from the sale of Earls Court to be
received over the next two years
- Lillie Square Phase 2 completion and handover on track for 2020, over 80 per cent
pre-sold representing approximately £100 million of sales proceeds (Capco share)
KEY FINANCIALS
2019 2018
Equity attributable to owners of the Parent £2,478m £2,736m
Equity attributable to owners of the Parent per share 290.0p 321.6p
-9.6% Total return in 2019 (2018: -2.0%)
EPRA net asset value £2,506m £2,777m
EPRA net asset value per share 292.9p 325.7p
Dividend per share 1.5p 1.5p
-5.4% Total property return in 2019 (2018: 0.4%)
Property market value1 £2,774m £3,268m
Net rental income from continuing operations2 £61.2m £57.5m
Loss for the year attributable to owners of the Parent £(253.6)m £(56.9)m
Headline loss per share3 (2.2)p (0.8)p
Basic loss per share3 (29.7)p (6.7)p
Underlying earnings per share3 1.0p 0.9p
1. On a Group share basis. Refer to Property Data for the Group’s percentage ownership of property.
2. On a Group share basis. Refer to the Financial Review.
3. From continuing and discontinued operations. Refer to Consolidated Underlying Profit Statement.
SHORT FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the Directors. It is only a
summary of the information contained in the full announcement and does not contain
full or complete details. Any investment decision should be based on the full
announcement accessible from 26 February 2020 via the JSE link and also available on
the Company’s website at www.capitalandcounties.com. Copies of the full announcement
may also be requested by contacting the Company Company
(feedback@capitalandcounties.com or telephone +44 (0)20 3214 9184).
The JSE link is as follows:
https://senspdf.jse.co.za/documents/2020/jse/isse/CCO/FY19Result.pdf.
DIVIDEND DECLARATION
The Directors of Capital & Counties Properties PLC have proposed a final dividend per
ordinary share (ISIN GB00B62G9D36) of 1.0 pence payable on 14 May 2020.
Dates
The following are the salient dates for payment of the proposed final dividend:
Sterling/Rand exchange rate struck: 2 April 2020
Sterling/Rand exchange rate and dividend amount in Rand announced: 3 April 2020
Ordinary shares listed ex-dividend on the JSE: 15 April 2020
Ordinary shares listed ex-dividend on the London Stock Exchange: 16 April 2020
Record date for final dividend in UK and South Africa: 17 April 2020
Election date for scrip dividend alternative (SA) by noon: 24 April 2020
Election date for scrip dividend alternative (UK) by 5:30pm: 24 April 2020
Dividend payment date for shareholders 14 May 2020
South African shareholders should note that, in accordance with the requirements of
Strate, the last day to trade cum-dividend will be 14 April 2020 and that no
dematerialisation of shares will be possible from 15 April 2020 to 17 April 2020
inclusive. No transfers between the UK and South Africa registers may take place from
3 April 2020 to 17 April 2020 inclusive.
Subject to SARB approval, the Board intends to offer an optional scrip dividend
alternative in respect of the 2019 final dividend.
No element of the 2019 final dividend will be treated as a Property Income
Distribution (“PID”) for tax purposes. The Board intends that the interim dividend
for 2020 will include an element which will be treated as a PID, for tax purposes, in
respect of the qualifying rental profits arising in 2019.
The above dates are proposed and subject to change.
Important information for South African shareholders
The final dividend declared by the Company is a foreign payment and the funds are
sourced from the UK.
The final cash dividend declared by the Company will constitute a dividend for
Dividends Tax purposes, declared in respect of a share listed on the exchange
operated by the JSE. Dividends Tax will therefore be withheld from the amount of the
final cash dividend which is paid at a rate of 20 per cent, unless a shareholder
qualifies for an exemption and the prescribed requirements for effecting the
exemption, as set out in the rules of the Scrip Dividend Scheme, are in place by the
requisite date.
It is the Company’s understanding that the issue and receipt of shares pursuant to
the scrip dividend alternative will not have any Dividends Tax nor income tax
implications. The new shares which are acquired under the scrip dividend alternative
should not comprise of a "foreign dividend" nor a "foreign return of capital" and
will be treated as having been acquired for nil consideration.
Any residual cash payments to account for fractional share payments will be subject
to Dividends Tax, which will be withheld from the residual payment to South African
shareholders at a rate of 20 per cent, unless a shareholder qualifies for an
exemption and the prescribed requirements for effecting the exemption (as set out in
the Scrip Dividend Scheme Booklet) are in place by the requisite date.
This information is included only as a general guide to taxation for shareholders
resident in South Africa based on Capco’s understanding of the law and the practice
currently in force. Any shareholder who is in any doubt as to their tax position
should seek independent professional advice.
A presentation to analysts and investors will take place today at 08:15am at UBS, 5
Broadgate, London, EC2M 2QS. The presentation will also be available to international
analysts and investors through a live audio call and webcast and after the event on
the Group’s website www.capitalandcounties.com.
Enquiries:
Capital & Counties Properties PLC:
Ian Hawksworth Chief Executive +44 (0)20 3214 9188
Situl Jobanputra Chief Financial Officer +44 (0)20 3214 9183
Sarah Corbett Head of Investor Relations +44 (0)20 3214 9165
Media enquiries:
Director of Communications Sarah Hagan +44 (0)20 3214 9185
UK: Hudson Sandler Michael Sandler +44 (0)20 7796 4133
SA: Instinctif Frederic Cornet +27 (0)11 447 3030
A presentation to analysts and investors will take place today at 08.15am (UK time)
at the offices of UBS, 5 Broadgate, London, EC2M 2QS. The presentation will also be
available to international analysts and investors through a live audio call and
webcast and after the event on the Group’s website at www.capitalandcounties.com.
JSE Sponsor:
Merrill Lynch South Africa (Pty) Limited
Date: 26-02-2020 09:00:00
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