Wrap Text
Interim results for the six months ended 30 June 2023
SHAFTESBURY CAPITAL PLC
(Incorporated and registered in the United Kingdom
with Registration Number 07145051 and
registered in South Africa as an external company
with Registration Number 2010/003387/10)
JSE code: SHC ISIN: GB00B62G9D36
LEI: 549300TTXXZ1SHUI0D54
3 August 2023
SHAFTESBURY CAPITAL PLC ("SHAFTESBURY CAPITAL" or "THE COMPANY")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023
Excellent momentum post-merger
Ian Hawksworth, Chief Executive, commented:
"We have had an excellent start as a newly merged company, creating the leading
central London mixed-use REIT. The team has come together to deliver strong
performance with growth in annualised rent and ERV with a strong pipeline of demand
for the second half. Despite the challenging macroeconomic backdrop, valuations are
unchanged reflecting the resilience of our exceptional portfolio.
Trading conditions across our West End locations are positive, with high footfall and
customer sales now tracking 15 per cent ahead of 2019 levels. 220 leasing
transactions completed in the first half of the year, at rents on average 5 per cent
ahead of December 2022 ERV providing confidence in the prospect of continued rental
growth from our unique portfolio. We are already seeing the benefits of the combined
platform and with our strong balance sheet, we look forward with confidence on
delivering further growth and returns in the years ahead."
Overview
- Excellent operational momentum with high footfall, positive trading activity,
strong demand for all uses, excellent leasing activity and low vacancy
- ERV growth over six months resulting in 3.3 per cent (like-for-like) increase to
£235 million and annualised gross income increased 5.6 per cent to £188 million
(pro forma: £178 million). Equivalent yield moved out 10 basis points to 4.2 per
cent (pro forma Dec 2022: 4.1 per cent)
- Valuation of wholly owned portfolio unchanged at £4.9 billion in line with pro
forma Dec 2022 £4.9 billion
- Excellent progress on integration with cost savings ahead of schedule and overall
savings now anticipated to be £13.5 million
- Strong balance sheet with access to £457 million of cash and undrawn facilities
- 5 per cent of the portfolio value anticipated to be recycled
- Despite macroeconomic uncertainty, the heart of the West End remains attractive
with competition for space in our areas anticipated to remain healthy,
underpinning rental growth prospects
Key financials
- EPRA NTA of 194 pence per share (Dec 2022 reported pre-merger and pro forma Dec
2022: 182 pence per share and 193 pence per share respectively)
- Total equity of £3.6 billion (Dec 2022 reported pre-merger: £1.6 billion)
- Net debt of £1.6 billion (pro forma Dec 2022: £1.5 billion) and EPRA loan-to-
value ratio of 31 per cent
- Underlying earnings of £27.5 million, equivalent to 1.9 pence per share
- Interim dividend of 1.5 pence per share
Strong operational momentum
- Positive trading activity for our customers, with reported sales in aggregate 15
per cent above 2019
- High footfall across the West End buoyed by increasing international visitor
numbers
- 220 leasing transactions with a rental value of £15.1 million concluded,
comprising:
- 89 commercial lettings and renewals: £10.5 million, 6 per cent ahead of 31 Dec
2022 ERV; and
- 131 residential lettings and renewals: £4.6 million, 13 per cent above previous
passing rents
- In addition, 41 commercial rent reviews were concluded, with a rental value of
£7.7 million, 7 per cent ahead of previous passing rents
- Low vacancy: 2.5 per cent of ERV available to let
- 27 new retail and hospitality brands and concepts introduced across the portfolio
- Annualised gross income up 5.6 per cent to £188 million, now ahead of pre-
pandemic levels (pro forma 2019: £187 million)
- Portfolio reversionary potential of £46.4 million, with current ERV 25 per cent
ahead of annualised gross income
- Contracted income of £20.5 million which will be realised on expiry of rent-free
periods, and contractual rent increases
- Schemes with an ERV of £6.9 million completed of which £5.5 million is let or
under offer. ERV of space under refurbishment at 30 June 2023 is £15.7 million
(6.7 per cent of portfolio ERV)
Robust balance sheet with a focus on resilience, flexibility and efficiency
- Liquidity of £457 million (cash of £157 million and £300 million undrawn
facilities)
- Modest capital commitments of £23 million
- Net debt of £1.6 billion (pro forma Dec 2022: £1.5 billion) and EPRA loan-to-
value ratio of 31 per cent
- The weighted average cost of drawn debt is 4.3 per cent (reported Dec 2022 pre
merger: 2.7 per cent). The effective running cash cost of drawn debt is 3.4 per
cent taking account of interest on cash deposits and the benefit of interest rate
hedging
- Weighted average maturity of debt of 4 years
Commitment to environment, sustainability and supporting our local communities
- Combined 2023 Net Zero Carbon Pathway will be published later this year based on
our "retrofit first" approach to the management of our heritage buildings
- Sustainable refurbishment activity continues across the portfolio enhancing the
energy performance credentials of our heritage properties; 68 per cent EPC rating
of A-C, up five percentage points during the period
- Continued support of community-led initiatives and charities which work with
organisations active in the West End
Outlook
- Strong performance demonstrates the exceptional qualities of the portfolio
delivering growth in both annualised rent and ERV
- Despite economic uncertainties, strong leasing pipeline and positive trading
conditions across our West End locations, provide us with confidence in the
growth prospects for our unique portfolio
Joint ventures
- Longmartin property value* of £159 million, a decrease of 1.1 per cent since Dec
2022. Lillie Square property value* of £72 million, a decrease of 3.1 per cent
(like-for-like) since Dec 2022
* Our 50% share
Refer to Glossary of terms on pages 56 to 60 of the full announcement.
KEY FINANCIALS
As at 30 As at 31
June December
2023 2022
Total equity(1) £3,553.7m £1,561.6m
Total equity per share(1) 194.5p 183.2p
Total return 7.4% (13.6)%
EPRA net tangible assets(1) £3,541.3m £1,552.2m
EPRA net tangible assets per share(1) 193.8p 182.1p
Total property return 1.4% 2.8%
Property market value(2) £4,898.5m £1,743.7m
Restated(1)
Six months Six months
ended ended
30 June 30 June
2023 2022
Gross profit £58.3m £26.9m
Profit/(loss) for the period(3) £799.1m £(11.4)m
Basic earnings/(loss) per share(1) 54.2p (1.3)p
Headline earnings/(loss) per share(1) 0.8p (10.9)p
EPRA earnings per share(1) 0.7p 1.4p
Underlying earnings per share(1) 1.9p 0.4p
Interim dividend per share(4) 1.5p 0.8p
1. Prior period comparatives have been restated to reflect a change in accounting
policy following clarification by the IFRS Interpretations Committee ("IFRIC")
during 2022 of how a lessor should account for the forgiveness of lease payments and
for the representation of expected credit losses, which are now included within
Costs. Details of the restatements and impact on prior period comparatives are set
out in note 1 'Changes in accounting policies' page 28 of the full announcement.
2. Refer to note 2 'Performance Measures' on page 32 of the full announcement.
3. Refer to note 10 'Investment Properties' on page 38 of the full announcement.
4. Refer to the 'Statement of Comprehensive Income' on page 23 of the full
announcement.
5. Refer to note 8 'Dividends' on page 36 of the full announcement.
This results announcement is the responsibility of the Directors of Shaftesbury
Capital. 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 consideration of the full announcement accessible from 3 August 2023 via the
JSE cloudlink at https://senspdf.jse.co.za/documents/2023/jse/isse/SHCE/HY23Result.pdf
and also available on the Company's website at
https://www.shaftesburycapital.com/en/investors/results-reports-presentations.html.
Copies of the full announcement may also be requested by contacting the Company
(feedback@shaftesburycapital.com or telephone +44 (0)20 3214 9170).
DIVIDENDS
The Directors of Shaftesbury Capital declared an interim cash dividend of 1.5 pence
per ordinary share (ISIN GB00B62G9D36) payable on 18 September 2023.
Dates
The following are the salient dates for payment of the interim cash dividend:
Sterling/Rand exchange rate struck Monday, 14 August 2023
Sterling/Rand exchange rate and dividend amount in Rand Tuesday, 15 August 2023
announced
Ordinary shares listed ex-dividend on the JSE, Wednesday, 23 August 2023
Johannesburg Stock Exchange
Ordinary shares listed ex-dividend on the London Stock Thursday, 24 August 2023
Exchange
Record date for the cash interim dividend in UK and Friday, 25 August 2023
South Africa
Dividend payment date for shareholders Monday, 18 September 2023
South African shareholders should note that, in accordance with the requirements of
Strate, the last day to trade cum-dividend will be Tuesday, 22 August 2023 and that
no dematerialisation or rematerialisation of shares will be possible from Wednesday,
23 August 2023 to Friday, 25 August 2023 inclusive. No transfers between the UK and
South African registers may take place from close of business on Tuesday, 15 August
2023 to Friday, 25 August 2023 inclusive.
The above dates are proposed and subject to change.
The interim cash dividend will be paid wholly as an ordinary dividend (non-PID).
There will be no PID element of the interim cash dividend. As such, the entire
interim cash dividend will be treated as an ordinary UK company dividend and no
element of the interim cash dividend will be subject to a deduction of a 20 per cent
UK withholding tax.
Information for shareholders
The information below is included only as a general guide to taxation for
shareholders based on Shaftesbury Capital'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.
UK shareholders
There is no PID element of the interim cash dividend. The entire interim cash
dividend will be paid as an ordinary dividend (non-PID) and therefore treated as an
ordinary UK company dividend.
South African shareholders
The interim cash dividend declared by the Company is a foreign payment and the funds
are sourced from the UK.
PIDs: There is no PID element of the interim cash dividend.
Non-PID: The entire interim cash dividend will be paid as an ordinary UK dividend
(Non-PID), and as such the entire interim cash dividend will be exempt from income
tax but will constitute a dividend for SA Dividends Tax purposes, as it will be
declared in respect of a share listed on the exchange operated by the JSE. SA
Dividends Tax will therefore be withheld from the entire interim cash dividend at a
rate of 20 per cent, unless a shareholder qualifies for an exemption and the
prescribed requirements for effecting the exemption are in place by the requisite
date.
Additional information on PIDs and ordinary dividends (non-PIDs) can be found at
https://www.shaftesburycapital.com/en/investors/investor-information/reit.html.
ENQUIRES:
Shaftesbury Capital PLC +44 (0)20 3214 9150
Ian Hawksworth Chief Executive
Situl Jobanputra Chief Financial Officer
Sarah Corbett Director of Commercial Finance and Investor
Relations
Media enquiries:
UK: Hudson Sandler Michael Sandler +44 (0)20 7796 4133
UK: RMS Partners Simon Courtenay +44 (0)20 3735 6551
SA: Instinctif Frederic Cornet +27 (0)11 447 3030
A presentation to analysts and investors will take place today at 9:00am at the
offices of UBS, 5 Broadgate, London, EC2M 2QS. The presentation will also be
available to analysts and investors through a live audio call and webcast and after
the event on the Company's website at www.shaftesburycapital.com.
A copy of this announcement is available for download from our website at
www.shaftesburycapital.com and hard copies can be requested via the website or by
contacting the Company (feedback@shaftesburycapital.com or telephone +44 (0)20 3214
9150).
DISCLAIMER
This announcement contains or may contain certain forward-looking statements. These
statements are often, but not always, made through the use of words or phrases such
as "believe," "anticipate," "could," "may," "would," "should," "intend," "plan,"
"potential," "predict," "will," "expect," "estimate," "project," "positioned,"
"strategy," "outlook", "target" and similar expressions. These include statements
regarding our intentions, beliefs or current expectations concerning, amongst other
things, our results of operations, financial condition, liquidity, prospects, growth,
strategies and the economic and business circumstances occurring from time to time in
the countries and markets in which Shaftesbury Capital operates.
All such forward-looking statements involve estimates and assumptions that are
subject to risks, uncertainties and other factors that could cause actual future
financial condition, performance and results to differ materially from the plans,
goals, expectations and results expressed in the forward-looking statements and other
financial and/or statistical data within this communication. Among the key factors
that could cause actual results to differ materially from those projected in the
forward-looking statements are uncertainties related to the following: the failure to
realise contemplated synergies and other benefits from mergers and acquisitions; the
effect of mergers, acquisitions and divestitures on Shaftesbury Capital's operating
results and businesses generally; the impact of adverse domestic or international
legislation and regulation; changes in domestic or international tax laws and rates;
adverse litigation and dispute outcomes and the effect of such outcomes on
Shaftesbury Capital's financial condition; changes or differences in domestic or
international economic or political conditions; the ability to obtain price increases
and the impact of price increases on consumer affordability thresholds; adverse
decisions by domestic or international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and transactional foreign exchange
rate exposure; the ability to maintain credit ratings; the ability to develop,
produce or market new alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to increase sales
growth; the ability to enhance cash generation and pay dividends and changes in the
market position, businesses, financial condition, results of operations or prospects
of Shaftesbury Capital.
It is believed that the expectations reflected in this announcement are reasonable
but they may be affected by a wide range of variables that could cause actual results
to differ materially from those currently anticipated. Past performance is no guide
to future performance and persons needing advice should consult an independent
financial adviser. The forward-looking statements in this announcement reflect
knowledge and information available at the date of preparation of this announcement
and Shaftesbury Capital undertakes no obligation to update or revise these forward-
looking statements, whether as a result of new information, future events or
otherwise. Readers are cautioned not to place undue reliance on such forward-looking
statements.
No statement in this communication is intended to be, nor should be construed as, a
profit forecast or a profit estimate and no statement in this communication should be
interpreted to mean that earnings per share of Shaftesbury Capital for the current or
any future financial periods would necessarily match, exceed or be lower than the
historical published earnings per share of Shaftesbury Capital.
JSE sponsor
Java Capital
Date: 03-08-2023 08:00:00
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