Embed Size (px)
Citation preview
Workspace Group PLC
Interim Results
for the six months ended
30 September 2007
Agenda
1. Introduction
2. Highlights – H1 2007
3. Financial Performance – H1 2007
4. Prospects
The Business: A Reminder
“ We provide affordable, flexible space for new and small businesses in London”
• c.4,500 customers over 119 estates; 6.2 million sq .ft
• Over 10,000 enquiries a year; market leading brand in fragmented market
• A simple product offer
• Superior service from in-house management
• Customer focused
Dynamics of London
• London is THE Global city
• London drives the UK economy
• Most multicultural – home to more than 300 languages
• 42 immigrant populations of 10,000 or more
• Home to 12.5% of UK population, produces 16.5% of its output
• Highest concentration of fastest-growing, most productive business sectors
London is our Knowledge Base
Unique London Portfolio
Workspace Customer Base
Customer base of more than 4,000 small businesses
18%
6%
1%2%
1%
12%5%
10%
45%
Manufacture
Retail
Construction
Utilities/Infrastructure
Organisations
Design & Creative
Services
Storage & Distribution
Unclassified
Classification based on DTI categories
Three Drivers of Growth
CORE BUSINESS Strong Rental Growth
High Occupancy
Proven Track Record
Extensive Database
In-house expertise
Employment led regeneration
ACQUISITIONS
REDEVELOPMENT
+
+
Agenda
1. Introduction
2. Highlights – H1 2007
3. Financial Performance
4. Prospects
Highlights
September 2007 March 2007
Rent Roll £49.5m £47.2m
Occupancy 86.4% 84.8%
Portfolio Valuation £1,035m £1,002m
Number of Estates 104 101
Valuation Performance
Valuation Surplus £12.2m £47.8m
ERV growth
+6.1% +14.5%
Reversionary Yield movement -18 bps - 19 bps
Relative IPD Ranking 10 15
To September 2007 6 months 12 months
Valuation – London Portfolio
Business Centres
Industrial
Number of properties 71 33
Valuation £800m £235m
Valuation Surplus +£12m 0
Capital Value/sq ft £245 £138
Average Rent/sq ft £13.92 £7.12
ERV/sq ft £17.03 £8.01
Valuation – Southbank Portfolio
Number of properties 9
Valuation £248m
Valuation Surplus +£6m
Capital Value/sq ft £305
Average Rent/ sq ft £17.19
ERV/sq ft £21.21
Occupancy
September 2007 March 2007 September 2006
Like-for-Like 89.2% 87.6% 85.9%
Clerkenwell, EC1 95.4% 89.4% 49.8%
The Light Box, W4 84.5% 81.4% 33.4%
Enterprise House, SE1 97.8% 88.5% 71.2%
Lombard House, Croydon 33.4% 23.4% 23.4%
Avro & Hewlett House, SW8 95.9% 85.6% -
Exmouth House, EC1 100.0% 100.0% -
Kennington Park, SW9 69.4% 75.7% 74.8%
Total Occupancy 86.4% 84.8% 81.7%
Rent Roll Growth
To September 2007 6 Months 12 Months
Like-for-like +£1.6m (4.2%) +£2.9m (8.0%)
Completed Developments +£0.4m +£2.1m
Ongoing Developments -£0.4m -£0.3m
Acquisitions/Disposals +£0.8m +£1.8m
Total Rent Roll +£2.4m (5.0%) +£6.5m (15.1%)
Acquisitions
£m
Neil House, E1 10.8
Other Properties 11.3
Total 22.1
Capital Value £159 per sq. ft
Initial Yield 3.8%
Reversionary Yield 7.5%*
* Excluding any additional potential in our hands
Neil House
Agenda
1. Introduction
2. Highlights
3. Financial Performance
4. Prospects
Financial Performance
Income Statement September 2007 September 2006 Change
Trading Operating Profit £20.7m £16.4m +26%
Trading PBT £7.0m £5.1m +37%
Trading EPS 4.0p 2.2p +82%
Dividend per share 1.52p 1.38p +10%
Balance Sheet September 2007 March 2007 Change
Portfolio Valuation £1,035m £1,002m +3%
Diluted adjusted NAV per share 343p 336p +2%
Financial Resources
September 2007 March 2007
Net debt £422m £381m
Net gearing 71% 65%
Trading interest cover 1.52 1.44
Average interest cost 7.0% 6.3%
Available undrawn facilities £79m £65m
Loan to value 41% 38%
Valuation - Fundamentals
September 2007 March 2007
ERV £69.3m £65.3m
Valuation £1,035m £1,002m
Reversionary Yield 6.70% 6.52%
Equivalent Yield (90%) 6.03% 5.87%
Current Yield 4.78% 4.71%
Reversionary Potential (to 90%) £12.9m £11.6m
Core Business Valuation
Over next18 months
Yields Stable
Yields out 50bps
Yields out 100bps
ERV up
5% p.a. +£80m 0 -£70m
ERV up
10% p.a. +£160m +£80m 0
What if…..
Reversionary Yield
6.7% 7.2% 7.7%
Typical Customer
+£17 / week
+£34 / week
Agenda
1. Introduction
2. Highlights
3. Financial Performance
4. Prospects
London Growth
• Population expected to grow from 7.5 million to 8.8 million in 2029
• Households expected to grow from 3.2 million to 3.6 million by 2021(source: ONS, Population trends 128; Summer 2007)
Source: Domestic & International Net Migration in London, 1981-2005
Source: GLA Working paper 24: An analysis of London’s employment by sector
Trading Outlook
To September 2007 6 Months 12 Months
Enquiries
- Number/month 790 750
New Lettings
- Number/month 88 92
Renewals
- Number/month 24 27
Refurbishment Update
Kennington – Canterbury Court
• Expected completion December 2007
• Total cost £12.2m
• 188,000 sq ft
Greville Street
• Completed June 2007
• Total cost £1.1m
• 11,500 sq. ft – currently 41% occupancy
Lombard House
• Completed June 2007 • Total cost £5.7m• 46,000 sq ft – currently 33% occupancy
Wharf Road
• To be completed H1 2008
• 32,000 sq ft
Redevelopment Pipeline
Planning Application Timescales
Workspace Glebe JV
2007 4 2 (1 approved)
2008 9 1
2009 5 4
• Also adding our name and brand to other large strategic schemes across London
• Will continue to feed into the redevelopment process other sites as opportunities appear/ conditions suit
Redevelopment Scale
+ Residential+ Affordable
+ Student Housing
+ Residential+ Affordable
45 apartments27 apartments
230 rooms
156 apartments53 apartments
Aberdeen
Wandsworth(Glebe JV)
Greenheath
Before After Intensification
x 2.0
x 2.6
x 2.5
Commercial 66,000 sq ft 66,000 sq ft
Commercial 46,000 sq ft 74,000 sq ft
Commercial 86,000 sq ft 86,000 sq ft
Outlook
CORE BUSINESS
ACQUISITIONS
REDEVELOPMENT
London
• SMEs
• Available space
• Mixed use agenda
• Residential demand
• Pricing
• Market
Workspace
• Brand
• Portfolio
• Asset Management Skills
• Database
• Financial Resources
• Mixed use credentials
• Partners
• Pipeline
Long-term track record
LAST6 MONTHS
LASTYEAR
LAST3 YEARS
LAST5 YEARS
LAST10 YEARS
IPD PERCENTILE RANKING
Top 10
Top 20
10
15 15
10
1
