Half year results to 30 September 2007

Transcription

1 Half year results to 30 September 2007

2 Agenda 1. Introduction John Plender Chairman 2. Market Review Adrian Wyatt CEO 3. Financials Rebecca Worthington Finance Director 4. Investments & Special Projects Nick Shattock Deputy CEO 5. Fund Management Tonianne Dwyer Head of Fund Management 6. Outlook Adrian Wyatt CEO 7. Questions

3 Quintain Estates & Development PLC Diversified business model Valuation uplifts at Greenwich and Wembley Significant activity across the business 3

4 Adrian Wyatt Chief Executive Overview

5 Market conditions Performance News Business model 5

6 The Market Uncertainty prevails Conditions may worsen before they improve Will give rise to opportunities Fundamentals of London mean residential demand should remain robust Greater resilience of mid-market Regeneration impact 6

7 Performance: IPD IPD Percentile Ranking Over 6 months Over 1 year Over 5 years Over 10 years 3rd 1st 1st 1st PERCENTILE PERCENTILE PERCENTILE PERCENTILE 6 month period 12 month period Quintain benchmark Quintain benchmark 9% 1.3% 25.4% 7.7% 7

8 Performance: IPD Total return Relative Fund Benchmark S-98 S-99 S-00 S-01 S-02 S-03 S-04 S-05 S-06 S-07 8

9 Performance: IFRS IFRS 6 Months 7.3% Total Return IFRS 12 Months 25.1% 9

10 News TFL lease at Greenwich Acquisition of retail park at Wembley Buy-in of Countryside stake at City Park Gate One Gallions development agreement signed for BioRegional Quintain iq delivery of 2 new schemes 97% occupancy 10

11 Risk and Financials Gearing of 39% - relatively low 150m of further facilities secured Increasing income from fund management RPI limited Growth in underlying earnings Self-fulfilling regeneration effect Little reliance on conventional investment to produce returns Diversified, hungry and opportunistic 11

12 Rebecca Worthington Finance Director Financials

13 Financial Highlights 30 September September 2006 % Change Total Return 7.3% 9.6% Gross Profit 16.2m 13.7m % Profit before tax ( 3.8m) 24.4m % Earnings per share 0.5p 15.9p % Dividend per share 3.75p 3.5p + 7.1% 30 September March 2007 % Change Net asset value per share Basic 700p 660p + 6.1% Diluted 693p 655p + 5.8% EPRA 829p 784p + 5.7% 13

14 Income Statement Net rent Trading sales Income from hotel operations Fees from fund management Other income Gross profit Administration Exceptional costs Profit on property sales Revaluation movements Net finance expenses JVs & Associates Pre-Tax Profit Tax Profit for financial period 30 September 2007 m (16.8) (1.5) - (15.3) (0.9) 14.5 (3.8) September 2006 m (14.5) (3.6) (3.9)

15 Joint Ventures Quercus Meridian Delta iq Other Total Net Rent Admin (0.8) (0.1) (0.7) (0.3) (1.9) Sales Revaluation Net Interest (2.6) - (0.3) - (2.9) Profit before Tax (0.2) (0.3) 18.0 Tax (1.8) (1.5) (0.1) (0.1) (3.5) Profit After Tax (0.3) (0.4)

16 Balance Sheet Investment properties Development properties Investment in JVs Other non current assets Current assets Net debt Other liabilities September 2007 m (350.5) (216.0) March 2007 m (302.8) (211.0) Net Assets

17 Balance Sheet Investment and Development Properties m As at 31 March 2007 Property purchases Capital expenditure Interest capitalised Disposals book value Net transfer into joint ventures Revaluation Surplus (9.3) (6.2) 54.3 As at 30 September

18 Investment in Joint Ventures iq Quintessential Homes (W01) BioRegional Quintain 1.3 Quantum 2.7 Other Joint Ventures Meridian Delta Ltd GROUP SHARE OF JOINT VENTURES 218.1m Quercus 18

19 Revaluation Surpluses Surplus / deficit m Valuation m % Uplift Wembley Meridian Delta Greenwich * Other developments (1.6) 79.2 (2.0) Other property investments (16.4) (6.5) MDL joint venture interests * MDL loan notes Quercus iq Quantum *including MDL joint venture interests 19

20 Capital Commitments 30 September 2007 m Wembley directly owned Wembley Retail Park Wembley - W01 BioRegional Quintain iq student accommodation fund Quercus Quantum science park fund Meridian Delta Limited Other

21 Financing September 2007 March 2007 Net debt Committed but undrawn debt Average maturity of debt Gearing Marking to market of debt Interest cover per banking covenants 350m 119m 5 years 39% 0.1m 2.2 times 303m 164m 5 years 36% - 4.4m 3.4 times 21

22 Bank Facilities m Maturity Syndicated corporate facility: Liquidity facility: 20 5 Bilateral facility: Discussions progressing well for further facilities 22

23 Greenwich Indicative Cash Flow Quintain s Share ( m) Direct development funding Infrastructure costs Direct development receipts Quintain landowner receipts MDL land receipts / / / / / / 12 Value of retained assets

24 Wembley Indicative Cash Flow ( m) Retail and leisure JV receipts W01 receipts JV residential sales receipts W03 receipts enhanced W04 receipts W05 receipts E01 receipts Infrastructure, site wide and parking Retail & leisure JV - investment JV residential construction cost / / / / / 12 Value of retained assets W03 construction cost plus share of Olympic steps W04 construction cost W05 construction cost -100 Land cost POI, LDA & acquisition of Retail Parks E01 construction cost plus share of Olympic steps -200 Value of retained assets 24

25 Financial Outlook Gearing remains relatively low at 39% Strong banking relationships and additional facilities raised Significant net creator of value 25

26 NICK SHATTOCK, DEPUTY CEO INVESTMENT PORTFOLIO & SPECIAL PROJECTS

27 Urban Regeneration: Strategy Inherent value in our major projects continues to rise We are in the right market Mixed use and London Residential Our development model will support further growth We build locations and places Towns as businesses Low to zero carbon 27

28 Property Highlights Greenwich 20% uplift to 278m after 5.8m Capex Transport for London 135,000 sq ft pre-let O2 opening success Valuation assumptions in the appendices Wembley 5.7% uplift to 595m after 39m Capex 226,000 sq-ft Stadium and Wembley Retail Parks purchased for 109.1m Now 85 acres ( 8m per acre) Valuation assumptions in the appendices Investment Portfolio written down to 262.5m from 244m ([7%]) BioRegional Quintain from concept to delivery On site RiversideOne (Middlehaven) Development agreement at One Gallions with GLA On site at One Brighton Preferred Bidder Status at West Moseley and Rochester 28

29 INVESTMENT PORTFOLIO Current Holdings Gross Assets Passing Rent ERV Yield Reversionary Yield March m m m 4.8% 7.0% September m m m 5.4% 7.5% 29

30 The Residential Market October Surveys Nationwide: +1% Halifax: -1% Savills: +3% National Provincial market volume falls Tightening terms for buy to let investors Mortgage approvals down 20% YT September 2007, and 37% October Quintain exposure minimal: Brighton and Middlehaven London Demographics population surge Experian: more than 5% rise 2008 Savills: 4.5-5% Little Quintain Exposure for 12 months Gallions Reach 260 units W01 JV Wembley PC August 2008 (50% affordable) 100% private sold W04 (70% affordable) 66% private sold Quintain will continue to de-risk with pre-sales and pre-lets 30

31 Comparable Recent Residential Sales Figures Pan Peninsula 880 units Average: 882 psf Highest: 1008 psf Greenwich Reach 660 units Average: 778 psf Highest: 1100 Capital East 335 units Average: 460 psf Highest: 597 psf GMV 148 units Average: 541 psf Highest: 600 psf 31

32 Wembley Valuation and Commercial Update Wembley Valuation: 595m Discount rate remains at 10% In house model assumes residential sales prices growth rate 1.1% above construction cost inflation 12.9 acre Junction Retail Park purchased for 85m post period takes site value to 680m Stage 2 masterplanning to include P0I and both retail parks 1.2m of retail, leisure and A3 now secured (stage 1 outline consent and retail parks) Stage 2 lands in Local Plan for up to 9.2m sq-ft, but could be considerably in excess of 10m sq ft Retail Update 32

33 Kalaty House Acres 10.25m registered Dec m / acre registered Rumoured to be sold with a total price c 30m on planning Dexion House Acres 11m registered May m / acre registered 17m reported but not registered, equates to 35.5m / acre Shubette House Acres 28m registered April m / acre registered 33

34 Junction Retail Park extends estate to 85 acres The Junction Industrial units 8,000 sq-ft at 2.3m/ 7m per acre 8,900 offices Marketed by JLL at 20 per sq-ft 34

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36 Stadium Retail Park The Junction Stadium Access Corridor Palace of Industries Wembley Landholdings Landholding Retail Boulevard 36

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38 MASTERPLAN 2008 Palaces of Arts and Industries The Junction South east South west 38

39 Wembley Northern Lands Masterplanning 39

40 Wembley Valuation and Commercial Update Wembley Valuation: 595m Discount rate remains at 10% In house model assumes residential sales prices growth rate 1.1% above construction cost inflation 12.9 acre Junction Retail Park purchased for 85m post period takes site value to 680m Stage 2 masterplanning to include P0I and both retail parks 1.2m of retail, leisure and A3 now secured (stage 1 outline consent and retail parks) Stage 2 lands in Local Plan for up to 9.2m sq-ft, but could be considerably in excess of 10m sq ft Retail Update 40

41 Greenwich Valuation and Commercial Update Blended discount rate of 12% and annual growth rates of 0.3% above construction cost inflation 135,000 NIA sq-ft pre-let to Transport for London (TFL) with detailed consent 60,000 sq-ft on floors 5 and 6 optioned to TFL for 12 months 15,000 retail, GEA c. 300,000 sq-ft New office location for London established 41

42 Transport for London at Greenwich Peninsula 42

43 Greenwich Commercial Update Ravensbourne College construction commences 999 year Dome/O2 lease completed uplift 6-7m to 13.2m (MDL 26.4m) O2 success feeds into RPI rent 43

44 Peninsula Square 44

45 Greenwich Residential Strategy Strategy is to develop the North-West (Peninsula Quays) as principals, the North-East in JV and the South-East as a combination of land sales, joint ventures and affordable heavy development. Ravensbourne College TFL 45

46 Greenwich Residential Update Strategy is to develop the North-West (Peninsula Quays) as principals, the North-East in JV and the South-East as a combination of land sales, joint ventures and affordable heavy development. On the North East, the Crest JV, where we see an average 575 per sq-ft 46

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48 Greenwich Peninsula PENINSULA QUAYS JV FOR FIRST TWO BLOCKS 378 apartments, 30% affordable in design and due for planning application early To be developed by Quintain and Lend Lease as principals within Peninsula Quays JV 424 units (45% affordable) on inland block in design for October 08 application by Peninsula Quays JV

49 Peninsula Quays 49

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52 Greenwich Peninsula Construction and a land sale of 50% of plot to EP s First Time Buyers Initiative, 40% affordable with RSL s and 10% private retained for sale by MDL 50:50 MDL / RSL s JV in legals with 40% affordable RSLs (Moat, L&Q) will share private sector residential risk 100 unit affordable land sale Bellway (land sale) on site January JV WITH RSLs 2 100% AFFORDABLE 3 First Time Buyers Initiative

53 BEVERLEY FLEMINGATE One Brighton (with Crest Nicholson): One Gallions (London, with Crest Nicholson): Appointed preferred developer November 07 West Molesey (Surrey, with Crest Nicholson): Application for planning consent Q1, 08 Rochester (with Crest Nicholson): On-site Development Agreement in negotiation Riverside One (Middlesbrough): Detailed consent on first two of nine blocks (150 apartments, 13,000 sq ft commercial) Construction starts summer 08 Middlesbrough OneBrighton RiversideOne College 53

54 Regional Special Projects Emersons Green Determination by Planning Committee: key issue is affordable housing Beverley Determination Q4 07 or Q1 08 for 70m GDV scheme City Park Gate 1million sq ft, including 25,000 sq ft offices and 800 apartments, to be re-masterplanned for hotel and additional offices Silvertown Leasing programme and joint venture discussions with adjoining owners underway 54

55 Drivers and Outperformance Greenwich established as a commercial centre Residential values at Greenwich and Wembley rise steadily Supply Chain Management: Philips, Siemens, Scottish & Newcastle, Scottish & Southern Energy BioRegional Quintain firmly in delivery mode Wembley: Stage 2 Lands set to transform perceptions with potential for more than 10m sq ft 1 million sq-ft Regional Special Projects mature with several planning decisions due 55

56 TONIANNE DWYER, HEAD OF FUND MANAGEMENT FUND MANAGEMENT

57 QUINTAIN FUND MANAGEMENT Attractive returns through specialist asset management Growing contribution to group performance Three funds 57

58 PROGRESS TO DATE 1338m 711m 895m Quantum iq completions 09/10 470m iq completions 08/09 iq completions 07/08 245m 296m iq March 07 Quercus completions 07/08 Quercus September / / / /07 SEP/ Position at September 07 FUND UNDER MANAGEMENT UP 26% SINCE 31 MARCH Funds Under Management and 'Agreed Terms' transactions at 30 September

59 Quercus: Healthcare RPI linked healthcare fund FUM up 20% to 776m in 241 properties with 36 operators 87.7m invested in the 6 months to Sept 07 at an average NIY of 7.13% 5 th largest owner of care homes Yields remain firm, occupier market remain strong 8% total return for six months Quintain receives asset management, performance and procurement fees 59

60 iq - STUDENT ACCOMODATION 50:50 Partnership with The Wellcome Trust 100m equity each Initial target 600m Direct-let schemes in underprovided University cities 2 new schemes opened September 07 were well received Occupancy 97% Sept 07 Completed Exchanged / on site In Legals m Beds Sheffield Nottingham Birmingham Salford 08: Kingston Preston Sheffield Edinburgh 09: Leeds Bristol Demand remains strong and yields show little sign of weakening

61 iq - STUDENT ACCOMODATION 50:50 Partnership with The Wellcome Trust 100m equity each Initial target 600m Direct-let schemes in underprovided University cities 2 new schemes opened September 07 were well received Occupancy 97% Demand remains strong and yields show little sign of weakening 61

62 iq - STUDENT ACCOMODATION 50:50 Partnership with The Wellcome Trust 100m equity each Initial target 600m Direct-let schemes in underprovided University cities 2 new schemes opened September 07 were well received Occupancy 97% Demand remains strong and yields show little sign of weakening 62

63 iq - STUDENT ACCOMODATION 50:50 Partnership with The Wellcome Trust 100m equity each Initial target 600m Direct-let schemes in underprovided University cities 2 new schemes opened September 07 were well received Occupancy 97% Demand remains strong and yields show little sign of weakening 63

64 iq - STUDENT ACCOMODATION 50:50 Partnership with The Wellcome Trust 100m equity each Initial target 600m Direct-let schemes in underprovided University cities 2 new schemes opened September 07 were well received Occupancy 97% Preston Salford Sheffield Birmingham Edinburgh Leeds Sheffield 2 Nottingham Demand remains strong Bristol Kingston W05 Wembley 64

65 iq - STUDENT ACCOMODATION 65

66 iq - STUDENT ACCOMODATION 66

67 iq - STUDENT ACCOMODATION 67

68 QUANTUM - SCIENCE PARKS 50:50 partnership with Morley Fund Management 10 year development agreement with SWRDA for Bristol and Bath Science Park signed December 06 SPark Emersons Green Consent for 77,000sqm. GDV circa 200m. In committee in December Initial investment estimated at 30m to fund infrastructure, Innovation Centre and Grow-on space. Thereafter demand led. 5.45m acquisition on Heriot Watt Science Park 68

69 QUANTUM - SCIENCE PARKS 50:50 partnership with Morley Fund Management 10 year development agreement with SWRDA for Bristol and Bath Science Park signed December 06 Consent for 77,000sqm. GDV circa 200m. In committee in December Initial investment estimated at 30m to fund infrastructure, Innovation Centre and Grow-on space. Thereafter demand led. 5.45m acquisition on Heriot Watt Science Park 69

70 QUANTUM - SCIENCE PARKS 50:50 partnership with Morley Fund Management 10 year development agreement with SWRDA for Bristol and Bath Science Park signed December 06 Consent for 77,000sqm. GDV circa 200m. In committee in December Initial investment estimated at 30m to fund infrastructure, Innovation Centre and Grow-on space. Thereafter demand led. 5.45m acquisition on Heriot Watt Science Park 70

71 QUANTUM - SCIENCE PARKS 34,000 sqft Innovation Centre to be managed in partnership with the Universities of Bristol, Bath and UWE 20,000 sqft Grow on Space for smaller companies The Forum a networking interaction hub 71

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73 Adrian Wyatt Chief Executive

74 Uncertainty creates opportunity 74