FULL YEAR RESULTS TO 30 TH NOVEMBER 2015 PRESENTATION Agenda 1. - - PowerPoint PPT Presentation

FULL YEAR RESULTS PRESENTATION

TO 30TH NOVEMBER 2015

Agenda

1. Highlights 2. Financial Results 3. Operational Review 4. Outlook

Comparative information: 1. During the period we were required to adopt IFRS 10 Consolidated Financial Statements. This requires that we change the basis of accounting for VSM Estates (Holdings) Ltd from consolidation to equity accounting. Comparative information has been restated accordingly. 2. During the period, further consideration was given to the revenue streams associated with the first two phases of student accommodation at the Bay Campus, Swansea University. It has been concluded that the transaction with M&G for 50% of income associated with this accommodation is more appropriately accounted for as a finance lease arrangement, rather than the sale of 50% of the assets. To reflect this, our 2014 results have been restated. Further detail on restatements is included in the Appendix. Disclaimer

This presentation does not contain or constitute an invitation or inducement to any person to underwrite, subscribe for, or otherwise acquire or dispose of any shares in St. Modwen Properties PLC or other securities and should not be relied on for such purposes. This presentation may contain certain forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and

• circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward looking statements.

Any forward looking statements made by or on behalf of St. Modwen Properties PLC speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. St. Modwen Properties PLC does not undertake to update forward looking statements to reflect any changes in St. Modwen Properties PLC's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Statements are made in this presentation about the price and past performance of shares in St. Modwen Properties PLC. Past performance cannot be relied upon as a guide to future performance.

2

Highlights

Financial

• 91% increase in profit before all tax to £258m

(2014: £135m)

• 27% increase in NAV per share to 414p (2014:

325p) and EPRA NAV per share up 30% to 446p (2014: 342p)

• Earnings per share up 82% to 97.9p (2014: 53.8p)
• Property profits up 31% to £67m (2014: £51m)
• New Covent Garden Market (NCGM) contributes

£127m to net valuation increase of £202m (2014: £94m)

• 25% increase in total dividend for the year to

5.75p per share (2014: 4.6p per share) Operational

• Major projects achieving significant milestones:

− NCGM – unconditional status achieved in H1, now reflected on balance sheet. Procurement of new market gaining momentum marking step forward to vacant possession of first 10 acres − Bay Campus, Swansea University – opened in September 2015 to 917 new students. Next phase opened in January 2016 and third phase started on site bringing total number of rooms to 2,000 by 2017 − Longbridge – 150,000 sq ft Marks & Spencer store and Phase 2 of Town Centre now open and trading

• Commercial property development pipeline

continues to deliver strong flow of profits

• Continued growth in residential development profits

to £29m (up 21%) (2014: £24m)

Strategy for growth has produced another year of record results

3

FINANCIAL RESULTS

4

Financial highlights

• Shareholders’ equity NAV per share up 27% to 414p (2014: 325p)
• EPRA NAV per share up 30% to 446p (2014: 342p)
• 91% increase in profit before all tax to £258m (2014: £135m)
• Trading profit up 39% to £63m (2014: £46m)
• NCGM recognised on balance sheet in H1, contributing a net gain of £127m in the year
• Further added value gains of £39m coupled with market driven gains of £36m taking total valuation

gain to £202m (2014: £94m)

• Adjusted gearing at 48% (Nov 2014: 47%) and see-through LTV at 30% (Nov 2014: 31%)
• Total dividend payable for the year up 25% to 5.75p per share (2014: 4.6p per share)

Excellent year of portfolio-wide delivery

5

Profit and loss Continued focus on value generation while working our income producing assets

6 Year ended 30 November 2015 £m Year ended 30 November 2014 £m

Net Rental Income

38.7 37.1

Property Profits

67.4 51.3

Other Income

4.2 3.6

Overheads

(26.5) (23.2)

Operating Profit

83.8 (+22%) 68.8

Interest

(20.5) (23.1)

Trading Profit

63.3 (+39%) 45.7

Added Value Valuation Gains

38.6 35.9

NCGM Valuation Gain

127.4

• Market Valuation Gain

35.7 57.6

Other Finance Charges

(6.6) (3.8)

Profit Before All Tax

258.4 (+91%) 135.4

Earnings per share

97.9p 53.8p

NOTE: the above figures are stated on a proportionally consolidated basis, including our share of JVs

Income producing portfolio

• A £768m portfolio of income producing assets (45% of

total portfolio):

• affordable rents on flexible leases
• diversified rent roll and tenant base
• Expertise in managing sites to generate income that

typically covers the running costs of the business

• Net rental and other rental style income increased to

£43m (2014: £41m) and driven by retained developments (Bay Campus for Swansea University and Longbridge Town Centre Phase 2) and new assets (Kirkby Town Centre), adding £9m of annualised net rental income

• Annualised gross rent roll increased during the year to

£58m (2014: £45m)

• Stable level of tenant vacations and good level of
• ccupancy (89%) maintained through to development
• Average lease length 6 years (2014: 5 years)
• Investment properties delivering high yields with an

equivalent yield of 7.7% (2014: 8.9%) on income producing properties

Increasing net rental income and other income £m

Increased rent roll covering greater percentage of business running costs

7

19.3 19.8 19.5 20.1 20.7 38.7 39.0 39.2 40.7 42.9

10 20 30 40 50 2011 2012 2013 2014 2015 HY FY

38.7 39.0 39.2 40.7 42.9 41.2 42.5 45.7 46.3 47.0

10 20 30 40 50 2011 2012 2013 2014 2015

Income Producing Portfolio Business Running Costs

Coverage of business running costs £m

Record property development profits

6 9 24 29 10 5 4 23 19 22 34 10 20 30 40 50 60 70 2012 2013 2014 2015

Commercial Swansea University, Bay Campus Housebuilding

51 29 67 38

8

• Commercial development

pipeline converting into record profits

• Significant milestones on major

projects reached:

• Bay Campus for Swansea

University opened in September 2015

• 150,000 sq ft M&S at

Longbridge Town Centre

• pened in November 2015
• 21% increase in total

housebuilding profits

Delivery of major projects and conversion of commercial and residential

• pportunities drive record property profits

£m

E&C=£10m Commercial=£9m

*

*Profits for Swansea University are now recorded both in Development Profits and Revaluations

NCGM

6 19 22 22 17 17

20 40 60 80 100 120 140 2013 2014 2015

Active management: Residential land Active management: Income producing and commercial land

Valuation movements

£m

Exceptional year adding value to assets with significant benefit from all major and regional projects

Active management valuation increases

£m 9

20 38 20 16

5 10 15 20 25 30 35 40 45 50 H1 2014 H2 2014 H1 2015 H2 2015

Market value gains

127

Strong balance sheet

30 Nov 2015 £m 30 Nov 2014 £m

Property assets

1,265 1,058

Investments in JVs and other assets

232 134

Debtors

112 72

Pensions

• Gross assets

1,609 1,264

Net borrowings

(443) (337)

Finance leases

(55) (23)

Trade payable etc.

(189) (180)

Gross liabilities

(687) (540)

Net assets

922 724

Non-controlling interests

(7) (6)

Shareholders’ funds

915 718

NAV per share

414 (+27%) 325p

EPRA NAV per share

446 (+30%) 342p

A successful business with substantial balance sheet flexibility

10

Nov 2014 Nov 2015 NAV per share 325p 414p EPRA NAV per share 342p 446p

NAV movements

11

Valuation gains reflect NCGM impact and strong year for commercial and residential markets

718 43 (47) 67 39 127 36 (11) (57) 915

500 600 700 800 900 1000

At Nov 2014 Net rents & other income Overheads & interest Development profit Value added portfolio NCGM Market valuation movement Dividend Tax / other movements At Nov 2015

£m

Net borrowing movements

12

Company remains acquisitive and continues to invest in development to generate future returns

250 300 350 400 450 500 550 600 650 700 750 800

Nov 2014 Net rents & other income Overheads & interest Tax & net dividends Working capital & finance leases Acquisitions & development expenditure Disposals Nov 2015 (337) 37 (51) (14) 27 (443)

£m

(370) 265

443

100 200 300 400 500 600

2015 2016 Renewal 2017 Renewal 2018 Renewal 2019 Renewal 2020 Renewal 2021 Renewal

£m

….

Resources and headroom to fund significant development pipeline Current banking facilities

HSBC Barclays Retail Bond RBS Convertible Bond Santander

….

JV facilities: KPI £85m (St. Modwen share 50% of £68m drawn) Expires 2019 VSM Uxbridge £30m (St. Modwen share 50% of £30m drawn) Expires 2019

99 100 125 80 100 50

Key ratios: Nov Nov

2015 2014

• Average facility

. maturity (years) 3.6 4.6

• Weighted average

. interest rate 3.9% 4.8%

• Adjusted gearing

48% 47%

• See through LTV

30% 31%

111 Headroom Borrowings

13

Note: adjusted gearing is the ratio of net borrowings (at amortised cost and excluding finance leases) to net assets

Financial summary

• Record profits
• Shareholders’ equity NAV per share increased by 27% to 414p (EPRA: 446p)
• NCGM adds 58p per share to EPRA NAV
• Dividend increased by 25% to 5.75p
• Regional development pipeline and investment in residential converted to realised property profits
• Weighted average interest rate reduced to 3.9% (2014: 4.8%)
• Proactive portfolio management continues to generate increase in value

14

Record results with strong pipeline of activity in 2016

19.3 19.8 19.5 20.1 20.7

38.7 39.0 39.2 40.7 42.9

10 20 30 40 50 2011 2012 2013 2014 2015

Secure net rental and other income

£m

HY FY 39 41 33 31 30

25 50 75 100 2011 2012 2013 2014 2015

See-through LTV

%

OPERATIONAL REVIEW

15

Highlights

• Significant milestones achieved across major projects:

− NCGM – works to market progressing well since going unconditional and advancing towards vacant possession of first 10 acres (Nine Elms Square) and we will explore our options to either sell, joint venture or develop the property during 2016 − Bay Campus, Swansea University – opened in September 2015 to 917 new students with next phase of accommodation opened in January 2016 and to be followed by Phase 3 in September 2017, bringing total number of rooms to 2,000. ‘St. Modwen Student Living’ established − Longbridge – second phase of the Town Centre including 150,000 sq ft Marks & Spencer store and other major national retailers now open

• Active development pipeline of 1.6m sq ft continually being replenished with new opportunities such as:

214,000 sq ft for Travis Perkins in Whitley, Coventry and 148,000 sq ft of speculative development in Avonmouth, Bristol (50% now let and sold)

• Regional housebuilding activity continues to grow, supported by ongoing demand for residential land

Development pipeline converted into record profit generation

16

Portfolio – shape

£m Nov 2014 Additions Reductions Updated Portfolio Nov 2015 Residential Land (46%) Residential Portfolio 553 167 (187) 533 2 17 552 NCGM 3 90

• 93
• 127

220 Commercial Land (9%) 146 86 (77) 155

• (3)

152 Income Producing (45%) Industrial 248 22 (14) 256 15 5 276 Retail 220 102

• 322

16

• 338

Residential 33 52

• 85

1 20 106 Office 61

• (15)

46 2

• 48

1,264 519 (293) 1,490 36 166 1,692

Significant gain from NCGM together with continued positive impact from residential and the regions deliver strong valuation growth

• Stated on a proportionally consolidated basis, including share of JVs
• Analysis provided by Cushman & Wakefield and Jones Lang LaSalle
• Additions include purchases, capital expenditure and inward reclassifications
• Reductions include disposals and outward reclassifications
• Income Producing Residential includes PRS and Bay Campus student accommodation

17

Commercial development opportunities

• £152m book value of commercial land held for potential

development – largest part of business by acreage (3,300 acres vs. land bank of 6,000 acres)

• Continued strong pipeline of projects across the UK
• Enhancing property profits with continued delivery of major

development schemes: Longbridge and Avonmouth

Continued strong pipeline of development generating cash and profits, supported by regions

18

One of three new depots for DPD (UK) totalling 189,000 sq ft

• Continuously converting significant new opportunities in the year including:

− Sale of 36 acres of land to Jaguar Land Rover and Travis Perkins at Whitley Business Park Coventry (£25.2m) − 90,000 sq ft of speculative development at Letchworth, 100% occupied and now sold − Development of three delivery depots for DPD (UK), totalling 189,000 sq ft at three St. Modwen sites (Exeter, Liverpool and Stoke-on-Trent), all sold in two separate transactions at yields of 5.0% and 5.3%

Commercial development pipeline

Number of schemes sq ft % pre-let/ pre-sold Dev Expen- diture £m GDV £m Movement during year Position at 30/11/14 32 2,045,000 62% 136 259 Sold / transferred to investment properties (10) (855,000) Schemes added to the pipeline 11 400,000 Position at 30/11/15 33 1,590,000 51% 114 213 Analysis of position at 30/11/15 Retail 10 305,000 50% 28 64 Industrial 23 1,285,000 52% 86 149 Total 33 1,590,000 51% 114 213

19

1.6 million sq ft active commercial development pipeline

Major Project: New Covent Garden Market (NCGM) Continued progress towards vacant possession of Nine Elms Square

• Development Agreement with CGMA became

unconditional in April 2015

• Outline planning permission for 3,019 new homes

(600 affordable) and 100,000 sq ft of office and retail space

• Procurement of new 500,000 sq ft market commenced

summer 2015

• Interim flower market works now advancing to

anticipated vacant possession of the first 10 (of 19) acres of surplus land (Nine Elms Square)

• We will explore our options to sell, joint venture or

develop the property during 2016 as we draw closer to vacant possession

20

Nine Elms Square, London Acres Private Units Affordable Density/Acre Land Values £m* Nine Elms Square: 10.2 1,821 94 (5%) 188 616 Nine Elms Gardens/Nine . Elms Grove: 8.5 598 506 (46%) 130 27 Total 18.7 2,419 600 (20%) 161 643

* Valuation based on forecast average sale price of £1,325 per sq ft (H1 2015: £1,333 per sq ft) for private residential sales (source: Jones Lang LaSalle)

NCGM - value Group share of NCGM valuation unchanged at year end

• Current serviced land value of

£643m, based on static residential sales values but impacted by build cost inflation

• Build cost inflation offset by

discount unwind as we move closer to vacant possession and reduced overage

• JLL net valuation of £440m after

enabling costs and overage remains unchanged from H1 2015 position

• Group share of valuation gain

after CGMA market liability of £127m 30 Nov 2015 31 May 2015 £m £m

Current value

643 660

Enabling costs and overage

(203) (220) 440 440

Less enabling costs incurred

(1)

• CGMA market liability

(184)

(184) VSM (NCGM) gain

255

256

• St. Modwen share

127

128 21

Major Project: Swansea University, Bay Campus Realising land, development, investment and asset management opportunities

Progress to date

• Campus opened to 917 students in September

2015, Phase 2 accommodation opened January 2016

• Phase 3 accommodation to open September 2017,

bringing total number of student rooms to 2,000 and providing continued valuation gains

• Total annualised net income stream of £1.8m as at

30/11/15 which will grow to £4.5m by 2017

• St. Modwen Student Living established to manage

student accommodation and associated facilities Future phases

• Planning granted to develop 300 homes at former

Hendrefoilan Campus site

• Works to next phase of student accommodation

commenced in January 2016 representing development expenditure of £32m

22

Swansea University, Bay Campus

Major Project: Longbridge, Birmingham Delivering shareholder value through long-term regeneration

• 750,000 sq ft commercial space now developed

and occupied, including Town Centre phases and M&S

• Annual net rental income of Town Centre to

increase to £4m per annum

• Planning approved for 90,000 sq ft HQ office

building and 180-bed accommodation for the Royal Centre for Defence Medicine for Defence Infrastructure Organisation

• St. Modwen Homes starting on site with new

scheme of 175 units in 2016, to add to 360 homes already delivered on site

• ‘ExtraCare’ on site with 260 assisted living units

and Waterloo Housing constructing 72 affordable housing units

The new 150,000 sq ft Marks & Spencer store open and trading

23

Residential planning and land sales

24

• St. Modwen’s planning expertise creates land value
• Strong and growing residential land bank now increased to 26,026 plots with planning recognition
• Stream of residential land continues to progress through planning process with major milestones in

2015 including: Secured 2015 Units Key targets 2016 Units − New Covent Garden Market, London 3,000 − Wolverton, Milton Keynes 375 − Meon Vale, Warwickshire 550 − Taylors Lane, Worcester 255 − Copthorne, Sussex 500 − Leegate, London 229 − Hendrefoilan, Swansea 300 − Sully, Barry, South Wales 200 − Trentham Manor, Stoke-on-Trent 300 − Locking Parklands, Weston-super-Mare 168 − St. Andrew’s Park, Uxbridge 71 − Hilton Valley, Staffordshire 130

• Planning applications awaiting determination for 2,236 plots
• Eight land sales agreed/completed at FY2015 representing 70.1 acres and £87m value

Residential – active sites

25

Good UK coverage for residential development

Residential development

101 239 562 652 15 158 126 258 315

200 400 600 800 1000

2011 2012 2013 2014 2015

• St. Modwen Homes

Persimmon JV

820 365 259 26

• Good residential sales rates and St. Modwen

Homes continues to perform well with new sites coming on stream for delivery in 2016

• 2015 reservation rates running at 0.70 per outlet

per week

Continued sales momentum across the UK

967

Legal completions

Residential development

• Generating significant cash flows and a full year profit of £29m

(+21%)

• St. Modwen Homes continues to mature with 18 sites
• Persimmon on site with all eight sites in the joint venture
• St. Modwen Homes growing to replace profits from

Persimmon as JV winds down

Growing residential revenue stream

27

6 8 24 29 10 20 30 2012 2013 2014 2015 2016(e)

£m

Residential profits

• St. Modwen

Homes Persimmon joint venture TOTAL Completed sites 3

• 3

Active sites 13 8 21 Pending 2016 5

• 5

£m profits to date 32 36 68 Potential St. Modwen share of future development profits (£m) 103 24 127 TOTAL 135 60 195 Units 3,809 2,420 6,229 Units completed to 30/11/15 861 1,554 2,415

• Continued strong momentum across flagship schemes as well as regional commercial and

residential development

• Investor appetite continues to remain strong for St. Modwen developments
• St. Modwen Homes to scale up activities further
• Strong results reflected in 25% increase in dividend, highlighting most recent performance
• Good visibility on future NAV growth

232 251 279 325 414

2011 2012 2013 2014 2015

Shareholders’ Equity NAV

Outlook Firmly on track for continued NAV growth

p per share

28

ABOUT ST. MODWEN PROPERTIES PLC

29

30

Our strategy

Our expertise in remediation, planning, asset development and construction supports our strategy of securing excellent returns through a focus on long-term significant added value while protecting our assets

Strategically agile – able to take advantage of opportunities

31

How we generate value Strong recurring income complemented by active asset development and property profits

£m % £m

Consistent ratio of rental and other income to

• perating costs including

interest Property valuation uplifts through active development Improving delivery of property profits

91% £166m £67m

97 92 86 88 91

20 40 60 80 100 2011 2012 2013 2014 2015

33 48 28 36 166

20 40 60 80 100 120 140 160 180 2011 2012 2013 2014 2015

24 29 40 51 67

20 40 60 80 2011 2012 2013 2014 2015

32

• St. Modwen’s business model

Business model generates regular income and drives portfolio value

33

Timeline

1986:

• St. Modwen established by reverse takeover in April

1986 by Redman Heenan International plc and becomes a publicly listed company

1986 - 1990:

• Rapid growth due to substantial development

programme based on enterprise zones and industrial schemes

• Programme moved to include retail schemes and
• ffice parks

1991:

• Attention switched to increasing rental income
• Regeneration strategy established
• Major expansion of range of partnerships with

landowners, local authorities and major companies

1997:

• Joint venture with Salhia Real Estate Company

K.S.C (KPI) entered into

2000 - 2003:

• Major acquisitions include portfolios from Alstom

and Marconi

• St. Modwen enters FTSE250 (November 2003)

2005 - 2010:

• Selected as preferred developer on many town

centre regeneration schemes

• Acquisition of large industrial sites including:

Longbridge, Llanwern, Project MoDEL, Coed Darcy and BP Portfolio

• £107m equity issue in 2009
• Establishes JV with Persimmon Homes plc
• Establishes St. Modwen Homes

2012:

• Selected as development partner with VINCI PLC for

the proposed redevelopment of New Covent Garden Market

• £80m retail bond issued

2013:

• Development Agreement signed with CGMA for

redevelopment of NCGM

• Development Agreement signed with Swansea

University for first phase of its £450m Bay Campus development

• £49m equity placing

2014:

• £100m convertible bond launched
• New student accommodation Development Agreement

signed with Swansea University to deliver 538 additional student apartments

• Resolution to grant planning secured for the

regeneration of the NCGM sites

2015:

• NCGM contract unconditional and recognised on

balance sheet

• Bay Campus, Swansea University opened to 917 new

students

• Phase 2 Longbridge Town Centre plus 150,000 sq ft

M&S store completed and now trading

2016:

• 30th Anniversary as a publicly listed company

Broad expertise and extensive land bank provides flexibility to move with market demands

34

APPENDICES

35

VSM Estates and Swansea University Restatements

VSM Estates

• VSM Estates (Holdings) Ltd (“VSM Estates”), our Mill Hill Joint Venture, previously consolidated

under SIC 12 due to our greater share of the risks and rewards

• Adoption of IFRS 10 removes this option and requires VSM Estates be equity accounted on the

basis of joint control

• Comparatives required to be restated
• No changes to shareholders’ equity net assets or NAV per share

Swansea University

36

• During the year, following receipt of the first rental income, further consideration was given to the

revenue streams associated with the first two phases of student accommodation at the Bay Campus development for Swansea University

• Due to the fixed (subject only to annual RPI adjustment) nature of the Group’s annual rental

payments to M&G, it has been concluded that the transaction is more appropriately accounted for as a finance lease arrangement, rather than as the sale of 50% of the assets

• We have restated our 2014 results to reflect recognition by the Group of the whole (rather than 50%)
• f the property interest in the student accommodation, and to account for the amounts due to M&G as

a finance lease liability. The previous construction contract accounting recognised in respect of the proportion of the development work performed on these sites that was funded by M&G has been eliminated and replaced by revaluation of the whole site during the course of construction

Restatements continued/….

30 Nov 2014 £m unless otherwise stated Previously reported Restated VSM Movement Swansea Movement Profit before all tax 138.1 135.4 (5.7) 3.0 Basic EPS 52.7 53.8

• 1.1

Property Portfolio 1,258.5 1,264.0 (17.2) 22.7 Net Assets 736.5 724.0 (12.8) 0.3 EPRA NAV per share 344p 342p (2p)

• Net Borrowings

334.1 337.4 (3.3)

• Net Debt

338.0 360.0 (3.3) (18.7) Gearing 46% 50% (1%) (3%) Adjusted Gearing 45% 47% (2%)

• See-through LTV

30% 31% (1%)

• 37

Rental income and recurring costs Growth in annualised rent roll reflecting net acquisitions and continued strong tenant demand

30 Nov 2015 £m 30 Nov 2014 £m Rent Roll at Start of Period / Year 45.4 44.7 Acquisitions / (Disposals) 2.4 (0.9) 47.8 43.8 Tenant Vacations (4.0) (4.2) Tenant Administrations (0.2)

• Rent Reviews

1.7 0.5 New Lettings 13.1 5.3 Closing Rent Roll 58.4 45.4 Void Percentage 11% 11% Net Rental Income 38.7 37.1 Other Rental Style Income 4.2 3.6 42.9 40.7 Overheads and Interest 47.0 46.3 % Coverage 91% 88%

% 88 87 88 89 89

20 40 60 80 100

2011 2012 2013 2014 2015

Occupancy rates

38

Profit and loss Continued focus on generating value across the land bank results in record profits

39

Year ended 30 November 2015 £m Year ended 30 November 2014 £m House- building Land & Comm. Property Total House- building Land & Comm. Property Total Net Rental Income

• 38.7

38.7

• 37.1

37.1 Property Profits 29.1 38.3 67.4 24.4 26.9 51.3 Other Income

• 4.2

4.2

• 3.6

3.6 Overheads (5.2) (21.3) (26.5) (5.0) (18.2) (23.2) Operating Profit 23.9 59.9 83.8 19.4 49.4 68.8 Interest (2.0) (18.5) (20.5) (2.4) (20.7) (23.1) Trading Profit 21.9 41.4 63.3 17.0 28.7 45.7 Added Value Property Valuation Gain 166.0 35.9 Market Property Valuation Movement 35.7 57.6 Other Finance Charges (6.6) (3.8) Profit Before All Tax 258.4(+91%) 135.4

Portfolio overview

Property portfolio by value £1.7bn

Income producing

£768m

• f portfolio

Regenerate, manage planning (currently 26,026 plots with planning recognition) and sell Persimmon JV

• St. Modwen Homes

NCGM Generate income to cover running costs of business Expertise in managing sites to maximise income Commercial assets awaiting redevelopment, manage planning, develop and sell Now includes Income Producing Residential: PRS & St. Modwen Student Living Regenerate, remediate, manage planning, develop and sell land Flagship projects Practical approach

Residential land

£772m

• f portfolio

Commercial land and development

£152m

• f portfolio

Extensive portfolio diversifies risk and creates opportunities

45% 46% 9%

40

Income producing portfolio

Yield Analysis (including Group share of JVs) Equivalent Net initial 30 Nov 2015 30 Nov 2014 30 Nov 2015 30 Nov 2014 Industrial 8.4% 8.8% 7.3% 7.7% Retail 7.6% 8.9% 6.1% 7.1% Residential 5.0% N/A 5.0% N/A Office 8.9% 9.2% 6.6% 7.3% Portfolio 7.7% 8.9% 6.5% 7.4%

Strong and consistent rental revenue stream

• Investment properties at high yields and low affordable rents
• Properties held for future development profits, not investment

41

The land bank

Developable acres 2015 2014 2013 Retail 344 342 337 Industrial and Commercial 2,923 2,935 2,997 Residential 2,021 1,954 1,893 Not yet specified 724 642 716 Total developable 6,012 5,873 5,943

Land bank ownership Development timescales

Substantial land bank provides solid asset value and substantial future

• pportunities

JV 8%

Wholly

• wned

68%

Development agreement 24% Within 5 years 15% Within 5-10 years 20%

10+ years 65%

• London & SE

Under management £330m Under management

• Regions

£343m SMH £53m

Residential land bank

42

Residential land bank

30 Nov 2015 30 Nov 2014 Acres Plots Acres Plots With planning recognition − Allocated in local plan or similar 107 1,963 92 1,789 − Resolution to grant 123 1,736 397 5,395 − Outline permission 1,104 19,829 891 14,680 − Detailed permission 161 2,498 144 2,022 1,495 26,026 1,524 23,886 No planning recognition

• Planning application submitted

186 2,236 167 2,042

• Other land

340 4,254 263 2,862 TOTAL RESIDENTIAL LAND 2,021 32,516 1,954 28,790

NOTE: Includes 100% of JVs

Residential land actively managed through the planning process

43

Performance summary Strong operating track record consistently producing trading profit and ability to add value

£m unless otherwise stated 30 Nov 2011 30 Nov 2012 30 Nov* 2013 30 Nov* 2014 30 Nov 2015 Rental and other income 38.7 39.0 39.2 40.7 42.9 Property profits 23.8 29.0 37.7 51.3 67.4 Overheads (16.7) (18.6) (20.2) (23.2) (26.5) Interest (23.0) (23.9) (25.1) (23.1) (20.5) Trading profit (before revaluation movements) 22.8 25.5 31.6 45.7 63.3 Net property portfolio (exc. assets under finance leases) 1,102.5 1,098.2 1,124.6 1,244.0 1,638.5 See-through net borrowings 431.6 448.7 367.9 380.2 489.3 See-through LTV 39% 41% 33% 31% 30% Net assets 476.0 513.7 616.6 724.0 921.5 44 £m unless otherwise stated

* Restated

Income producing – Top 10 tenants

£m* Alstom Group UK Ltd 4.0 Swansea University 2.5 Shanghai Automotive 1.7 Marks & Spencer 1.5 Knorr Bremse SFS 1.5 Paragon Automotive Services Ltd 1.4 Siemens Industrial Turbomachinery Ltd 1.0 Beko PLC 1.0 Arlington Fleet and Retail Group 1.0 Wireless Data Services 0.9 Blue Diamond (UK) Ltd 0.6

* Gross annual rent before minority interest or joint venture accounting

Largest tenants have sound covenants

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Glossary

• Active management valuation: The component
• f property revaluations delivered as a direct

result of management actions and initiatives e.g.

• btaining planning consent, achieving

remediation milestones and improving lease terms

• Adjusted gearing: The ratio of net borrowings

(at amortised cost and excluding finance leases) to net assets

• Cost cover ratio: The ratio of recurring rental

and other income to operating costs

• Gearing: The ratio of net debt to net assets
• Gross development value (GDV): The sale

value of property after construction

• Interest: Net finance costs (excluding the mark-

to-market of derivative financial instruments and

• ther non-cash items) for the Group (including its

share of joint ventures and associates)

• Interest cover: The ratio of operating income to

interest

• Land bank: 100% of land and property owned

and controlled by the Group together with joint ventures and associates

• Net borrowings: Total borrowings (excluding

finance leases at amortised cost) less cash and cash equivalents

• Net debt: Total debt (including finance leases)

less cash and cash equivalents

• Net rental income: Rental income receivable

less non-recoverable property costs for the Group (including its share of joint ventures and associates)

• Occupancy rates: Estimated rental value

(ERV) attributable to vacant units as a proportion

• f total ERV (including the Group’s share of joint

ventures and associates). ERV is determined by the Group’s external valuers

• Operating costs / business running costs:

Administrative expenses plus net finance costs (excluding the mark-to-market of derivative financial instruments and other non-cash items) for the Group (including its share of joint ventures and associates)

• Other income: Other rental type income

generated from the operating assets of the Group (including its share of joint ventures and associates)

• Operating income: net rental income, property

profits and other income for the Group (including its share of joint ventures and associates)

• Persimmon joint venture: A contractual

arrangement with Persimmon to develop residential units on agreed sites within the St. Modwen land bank

• Property portfolio: Investment properties and

inventories of the Group (including its share of joint ventures and associates) comprising income producing properties together with residential and commercial land

• Property profits: Development profit (before the

deduction of net realisable value provisions) plus gains on disposals of investments/ investment properties for the Group (including its share of joint ventures and associates)

• RCF: Revolving Credit Facility
• Average lease length: The weighted average

lease term to the first tenant break

• See through loan-to-value ratio: The ratio of

net borrowings to the property portfolio on a proportional consolidated basis (including Group share of joint venture and associates)

• Trading profit: Operating income less operating

costs

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