HALF YEAR RESULTS Great Hall, Bay Campus, Swansea University - - PowerPoint PPT Presentation

HALF YEAR RESULTS PRESENTATION

TO 31st MAY 2016

Great Hall, Bay Campus, Swansea University

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.

INTRODUCTION

3

Presenters: Bill Oliver

Chief Executive

Rob Hudson

Group Finance Director

Contents:

Highlights 4 Operational Overview 5 Financial Results 13 Outlook 22 Appendices 23

Welcome to St. Modwen Properties PLC Half year results presentation

The UK’s leading regeneration specialist

4

HIGHLIGHTS

PERFORMANCE AND OPERATIONS

• Commercial property development contributes £21m to strong property

profits of £36m (H1 2015: £37m)

• 15% increase in residential profits to £15m (H1 2015: £13m), supported

by good sales rates across the UK

• Increased investment in Private Rented Sector
• Major projects reaching important milestones and all holding good

potential for long-term development opportunities

STRONG RESULTS DRIVEN BY ROBUST UNDERLYING PERFORMANCE

NCGM under construction, Nine Elms, London Bay Campus, Swansea University Longbridge, Birmingham

FINANCIAL HIGHLIGHTS

• Shareholders’ equity NAV per share up 2% to 421p (Nov 2015: 414p)

and EPRA NAV up 1% to 451p (Nov 2015: 446p)

• Profit before all tax of £30m (H1 2015: £206m including £128m NCGM

valuation gain)

• Results include one-off £13m impact from SDLT increase and £21m

reduction from NCGM re-valuation

• Interim dividend increased by 2% to 1.94p per share (H1 2015: 1.9p)

5

OPERATIONAL OVERVIEW

Access 18, Avonmouth

6

LANDBANK AND PORTFOLIO – VALUE GENERATION

• 6,000 acre land bank sits at the core of the business
• 64% wholly owned and 36% under development agreement/JV
• Provides opportunity to continually add value
• Over the last three years, over £40m has been generated from secured planning permissions
• £1.7bn property portfolio, predominantly regional and superbly placed to generate value for the Group

through our own actions

CONTINUALLY PROVIDING OPPORTUNITIES FOR LONG-TERM VALUE CREATION

• 1.7m sq ft pipeline
• Representing £236m GDV
• A further 13m sq ft with

planning permission already secured, to be delivered over time

• A further 6.5m sq ft already

identified for future pipeline, subject to planning

• 26,167 plots with planning

recognition*

• Realised via land sales

and St. Modwen Homes

* Allocated in local plan or similar, resolution to grant, outline permission or detailed permission – see slide 41

Commercial land and development £157m 9% Income producing £804m 47% Residential land and development £738m 44%

7

REGIONAL COMMERCIAL HIGHLIGHTS

£1.7BN PROPERTY PORTFOLIO DELIVERING STRONG REGIONAL ACTIVITY

North West

Key acquisitions (£4.7m net rental income):

• Crosby Town Centre
• Kirkby Town Centre
• 17 acres for development &

260,000 sq ft industrial estate, Bury, Greater Manchester

South West

Development agreement: £90m development of 1m sq ft industrial park, Chippenham, Wiltshire

North East & Yorkshire

Active development: Over 100,000 sq ft retail and industrial space, Doncaster (£11m GDV)

Midlands

Active development: Over 450,000 sq ft across four projects, incl. new facilities for Travis Perkins and DFS (£37m GDV)

London & South East

Development agreement: £200m development of Spray Street, Woolwich in 50/50 JV with Notting Hill Housing

South Wales

Active development: Phase 1c Bay Campus, Swansea University, 538 rooms, £2.2m net rental income

Northern Home Counties

Development agreement: 1m sq ft industrial development, part of £900m Stanton Cross regeneration, Wellingborough

8

MAJOR PROJECTS

MAJOR PROJECTS HOLD EXCELLENT POTENTIAL FOR FUTURE VALUE GENERATION

NEW COVENT GARDEN MARKET:

• Optimal location, adjacent to new Nine Elms tube station & US Embassy
• A long-term (10 year) project
• Value creation from land barter with minimal capital outlay
• Accounts for 11% of Group NAV
• SMP share of value now £106m (Nov 2015: £127m) driven by a 3.75%

reduction in residential sales prices to £1,276 per sq ft (Nov 2015: £1,325 per sq ft) LONGBRIDGE, BIRMINGHAM:

• 468 acre site, 40% delivered to date
• Town Centre phase 2 complete with further lettings to national retailers
• Works to Royal Centre for Defence Medicine facility commenced
• 350 of 2,000 homes completed

BAY CAMPUS, SWANSEA UNIVERSITY:

• Phase 1c progressing well (538 student rooms)
• Opening September 2017 when total student residents will total 2,000
• Will add £2.2m incremental income, bringing total rental income of scheme to

£4.8m

• Good potential for delivery of additional phases

NCGM, Nine Elms, London Longbridge, Birmingham Bay Campus, Swansea University

9

RESIDENTIAL

Hilton Valley, Derbyshire

10

RESIDENTIAL HIGHLIGHTS

RESIDENTIAL BUSINESS DELIVERING ACCELERATED GROWTH

• Continued strong growth of residential profits to £15m

(H1 2015: £13m), supported by growth of St. Modwen Homes

• St. Modwen Homes’ profit levels now surpassing

Persimmon

• Total of 461 residential completions
• St. Modwen Homes active on 14 sites, all provided

from our own land bank

• Current average selling price for St. Modwen Homes

£200k

2 4 14 15 7 4 5 10 13 8

5 10 15 20 25 30

FY 2012 FY 2013 FY 2014 FY 2015 HY 2016

Persimmon JV

• St. Modwen Homes

£m

101 239 562 652 259 158 126 258 315 202

100 200 300 400 500 600 700 800 900 1000 FY 2012 FY 2013 FY 2014 FY2015 HY 2016 Units

Residential completions Residential development profits 259 461 967 820 365 15 28 24 9 6

11

RESIDENTIAL SITES

BROADENING REACH ACROSS THE UK

12

PRIVATE RENTED SECTOR (PRS)

INCREASED INVESTMENT IN PRS

Completed developments:

Two schemes 64 apartments £0.7m annual rent £15m GDV

Future opportunities:

Nine schemes

• Approx. 1,400* apartments
• Approx. £12m annual rent
• Approx. £250m GDV

*subject to planning 4 5 6

Utilising land bank to deliver both development profits and growth in rental income

Wembley Central (38 apts) Edison Place, Rugby (26 apts) Edison Place Phase 2, Rugby

• St. Andrew’s Park, Uxbridge

3 Edmonton Green, Enfield Lee Green, Lewisham Spray Street, Woolwich Farnborough Town Centre, Hampshire Wythenshawe Town Centre, Manchester Longbridge, Birmingham

• St. Andrew’s Park Phase 2, Uxbridge

5 1 9 10 11 6 7 8 2 3 4 1 2 3 5 6 7 11 8 9 10 4

13

FINANCIAL RESULTS

Burton Gateway, Burton upon Trent

14

FINANCIAL HIGHLIGHTS

EXCELLENT UNDERLYING TRADING PROFITS DEMONSTRATE THE STRENGTH OF THE BUSINESS

• Shareholders’ equity NAV per share up 2% to 421p (Nov 2015: 414p) and EPRA NAV per share up 1%

to 451p (Nov 2015: 446p)

• Profit before all tax of £30m (H1 2015: £206m including £128m benefit from NCGM)
• Results include one-off £13m impact from SDLT and a £21m impact from the reduction in the NCGM

valuation, combined reducing NAV and EPRA NAV growth by 4% and 3%, respectively

• Further added value gains of £15m coupled with market driven gains of £13m
• Trading profits of £34m in line with record levels in previous year (H1 2015: £35m)
• Adjusted gearing at 48% (Nov 2015: 48%) and see-through LTV at 30% (Nov 2015: 30%)
• Interim dividend increased by 2% to 1.94p per share (H1 2015: 1.9p per share)

15

PROFIT AND LOSS

31 May 2016 £m 31 May 2015 £m 30 Nov 2015 £m Net rental income 24.8. 18.6. 38.7. Property profits 36.1. 37.3. 67.4. Other income 2.1. 2.1. 4.2. Overheads (17.0) (12.1) (26.5) Operating profit 46.0. 45.9. 83.8. Interest (11.6) (10.5) (20.5) Trading profit 34.4. 35.4. 63.3. Added value valuation gains 14.9. 28.4. 38.6. Market valuation movement 13.0. 20.4. 35.7. Other finance (income/charges) 1.0. (6.5) (6.6) Underlying profit before all tax 63.3 (-19%) 77.7. 131.0. NCGM valuation movement (20.8).. 128.0... 127.4... SDLT impact (12.5)

• Profit before all tax

30.0 (-85%) 205.7. 258.4. Earnings per share 11.8p 76.0p 97.9p BUSINESS DELIVERS ROBUST PROFITS AGAINST RECORD YEAR IN 2015

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

16

INCOME PRODUCING PORTFOLIO

Significantly improved rent roll now covering more than 100% of business running costs – net rent and other income increased to £27m (H1 2015: £21m) £804m portfolio of income producing assets (47% of total portfolio), with annualised gross rent roll exceeding £60m Stable level of tenant vacations and good level of occupancy at 89% maintained through development Investment properties delivering high yields with an equivalent yield of 7.7% (Nov 2015: 7.7%) on income producing properties Average lease length of 7 years

PROVIDING A FIRM FINANCIAL BASE THAT COVERS BUSINESS RUNNING COSTS

Business running costs restated to exclude direct residential overheads (see appendix, slide 39)

19.8 19.5 20.1 20.7 26.9 39.0 39.2 40.7 42.9

• 10.0

20.0 30.0 40.0 50.0 2012 2013 2014 2015 HY 2016 £m Increasing rent & other Income

HY FY

94% 89% 92% 96% 101% 80% 85% 90% 95% 100% 105% 2012 2013 2014 2015 2016 HY Improving cost coverage 105 100 95 90 85 80 %

17

STRONG PROPERTY PROFITS

• Strong property profits of £36m (H1 2015: £37m)
• Continued strength in the commercial development pipeline across

the regions

• Housebuilding profits up 15% to £15m (H1 2015: £13m), driven by

growth in St. Modwen Homes

• Development of Swansea phase 1c student accommodation now

generating added value gains

CONTINUED DELIVERY OF EXCELLENT COMMERCIAL AND RESIDENTIAL PROPERTY PROFITS

Meon Vale, Warwickshire Bay Campus, Swansea University Parkside Business Park, Doncaster

2 9 13 15 6 4 21 21 8 6 3 16 19 37 36

• 10

20 30 40 HY 2013 HY 2014 HY 2015 HY 2016 £m Bay Campus, Swansea University Commercial Housebuilding

18

BALANCE SHEET

ROBUST BALANCE SHEET DEMONSTRATES STRENGTH OF THE BUSINESS 31 May 2016 £m 30 Nov 2015 £m Property assets 1,311. 1,265. Investments in JVs and other assets 198. 232. Debtors 114. 112. Gross assets 1,623. 1,609. Net borrowings (454) (443) Finance leases (57) (55) Trade payables etc. (173) (189) Gross liabilities (684) (687) Net assets 939. 922. Non-controlling interests (7) (7) Shareholders’ funds 932. 915. NAV per share 421p (+2%) 414p EPRA NAV per share 451p (+1%) 446p

19

NAV MOVEMENTS

Nov 2015 May 2016 NAV per share 414p 421p EPRA NAV per share 446p 451p CONTINUE TO GROW NAV WITH UNDERLYING STRENGTH OF BUSINESS 966 932 (11) (13) (21) 34 15 13 915 700 750 800 850 900 950 1,000 Nov-15 Trading profit Value added gains Market valuation gains Dividend / Tax / Other Subtotal SDLT NCGM May-16 £m

+6% +2%

20

BANKING FACILITIES

JV facilities: KPI £85m (St. Modwen share 50% of £68m drawn) Expires 2019 VSM Uxbridge £30m (St. Modwen share 50% of £26m drawn) Expires 2019

MATURITIES EXTENDED THROUGH CONTINUED REFINANCING ACTIVITY 100 125 80 100 50 103 457 101 100 200 300 400 500 600 May-16 2016 renewal 2017 renewal 2018 renewal 2019 renewal 2020 renewal 2021 renewal £m

Headroom Borrowings Santander Barclays HSBC Convertible Bond RBS Retail Bond

21

FINANCIAL HIGHLIGHTS

STRONG RESULTS AND RESILIENT BALANCE SHEET

Weighted average debt maturity increased to

3.7 years

Shareholders’ equity NAV per share increased by

2% to 421p

(EPRA NAV per share up 1% to 451p)

Resilient balance sheet with see-through LTV at

30%

Weighted average cost

• f debt reduced to

3.8%

(Nov 2015: 3.9%)

Business running costs fully covered

101%

(Nov 2015: 96%)

Trading profit in line with 2015 record year

£34m

(Nov 2015: 3.6 years)

22

OUTLOOK

BUSINESS REMAINS IN EXCELLENT SHAPE, UNDERPINNED BY STRONG REGIONAL PORTFOLIO

• Strong results, with good momentum across major projects as well as

regional commercial and residential development

• Growing and profitable residential business
• Continue to consider new commercial opportunities to add to £1.7bn

portfolio whilst recycling assets to which we can no longer add significant value

• 2% increase in interim dividend to 1.94p per share
• Until there is more clarity following the Referendum result we will take

a more cautious approach to the delivery of our development strategy, albeit the company remains in an exceptionally strong financial position

Celtic Business Park, Newport, Wales DFS, Centurion Park, Tamworth Trentham Manor, Stoke-on-Trent

23

APPENDICES

Ivor Goodsite, Meon Vale, Warwickshire

• ST. MODWEN PROPERTIES PLC

24

25

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

26

HOW WE GENERATE VALUE

Consistent ratio of rental and other income to

• perating costs including

interest Property valuation uplifts through active development Delivery of property profits

101% £15m £36m

94 89 92 96 101

20 40 60 80 100 FY 2012 FY 2013 FY 2014 FY 2015 HY 2016

35 18 15 28 15

20 40 60 HY 2012 HY 2013 HY 2014 HY 2015* HY 2016

17 16 19 37 36 20 40

HY 2012 HY 2013 HY 2014 HY 2015 HY 2016

1

HY 2016

* Before £128m benefit from NCGM

27

BUSINESS MODEL

28

TIMELINE

29

THE LAND BANK

JV 8% Wholly

• wned

64%

Land bank ownership

Development agreement 28% SMH £87m

Residential land bank

Persimmon JV £22m Under management - Regions £330m Under management – London & SE £299m Developable acres May 2016 Nov 2015 Nov 2014 Retail 335 344 342 Industrial and Commercial 3,109 2,923 2,935 Residential 1,970 2,021 1,954 Not yet specified 766 724 642 Total developable 6,180 6,012 5,873

Within 5 years 15% Within 5- 10 years 20% 10+ years 65%

Development timescales

30

PORTFOLIO SHAPE

• 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

£m Valuation Movement Nov 2015 Additions Reductions SDLT Updated Portfolio Market

• St. Modwen

Added May 2016 Commercial Land (9%) 152 34 (34) (1) 151 1) 5 157 Income Producing (47%) Industrial 276 23 (6) (3) 290 4) 7 301 Retail 338 11 (8) (3) 338 4) 3 345 Residential 106 10

• (1)

115 1)

• 116

Office 48 2 (8)

• 42
• )
• 42

Residential Land (44%) 772 133 (144) (5) 756 (18)

• 738

1,692 213 (200) (13) 1,692 (8) 15 1,699

31

VALUATION MOVEMENTS

GOOD ACTIVE AND MARKET VALUATION GAINS BEFORE SDLT AND NCGM IMPACT

FY 2013 FY 2014 FY 2015 HY 2016 Market valuation gains Market valuation gain 14 58 36 13i Stamp Duty Land Tax

• (13)

New Covent Garden Market

• (21)

Reported market valuation gain 14 58 36 (21) Added value valuation gains Residential land 6 19 17

• )

Income producing and commercial land 22 17 22 15. New Covent Garden Market

• 127
• .

Reported added value valuation gains 28 36 166 15i

32

RESIDENTIAL LAND BANK

31 May 2016 30 Nov 2015

Acres Plots Acres Plots With planning recognition

• Allocated in local plan or similar

103 1,768 107 1,963

• Resolution to grant

99 1,236 123 1,736

• Outline permission

1,107 20,301 1,104 19,829

• Detailed permission

182 2,862 161 2,498 1,491 26,167 1,495 26,026 No planning recognition

• Planning application submitted

88 1,688 186 2,236

• Other land

391 4,417 340 4,254 TOTAL RESIDENTIAL LAND* 1,970 32,272 2,021 32,516

*Includes 100% of JV's

33

MAJOR PROJECT: LONGBRIDGE

40% DELIVERED TO DATE AND £XM VALUE GENERATED

34

MAJOR PROJECT: NEW COVENT GARDEN MARKET (OVERVIEW)

• Optimal location and superbly connected

adjacent to new Nine Elms tube station

• A long-term (10 year) project
• Value creation from land barter with minimal

capital outlay to date

• Accounts for 11% of Group NAV

A CLASSIC ST. MODWEN LONG-TERM REGENERATION PROJECT

Development agreement unconditional Procurement of new 500,000 sq ft market commenced Handover of temporary flower market Nine Elms Square (10 acres) – vacant possession Nine Elms Gardens – vacant possession Nine Elms Grove – vacant possession April 2015 July 2015 2017 2017 2022 2022 2022 New market completion

35

SWANSEA UNIVERSITY RESTATEMENT

• Following receipt of the first rental income during the second half of 2015, 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, meaning that the Group retains exposure (both positive and negative) to all variability in net rentals generated from the properties, it was concluded that the transaction was more appropriately accounted for as a finance lease arrangement, rather than as the sale of 50%

• f the assets.
• Consequently, for the year ended 30th November 2015 we restated our 2014 results and opening

Balance Sheet as reported in the Financial Statements for that period. This restatement has now also been applied to the results for the six months ended 31st May 2015 to reflect recognition by the Group of the elements below: − the whole (rather than 50%) of the property interest in the student accommodation; − to account for the amounts due to M&G as a finance lease liability; − to eliminate the construction contract accounting recognised in respect of the proportion of the development work performed on these sites that was funded by M&G; and − to revalue the site during the course of construction.

• Details of this restatement are included in the notes to the Condensed Financial Statements.

36

SWANSEA UNIVERSITY RESTATEMENT CONTINUED/…

31 May 2015

£m unless otherwise stated Previously reported Restated Swansea Movement Profit before all tax 203.1 205.7 2.6 Basic EPS 75.4p 76.0p 0.6p Property portfolio 1,528.7 1,580.4 51.7 Net assets 876.7 878.3 1.6 EPRA NAV per share 427p 428p 1p Net borrowing 383.6 431.0 47.4 Gearing 44% 49% 5% See-through LTV 29% 31% 2%

37

PROFIT AND LOSS

31 May 2016 £m 31 May 2015 £m

House building Land & Comm. Property Total House building Land & Comm. Property Total Net rental income 24.8 24.8

• 18.6

i18.6 Property profits 15.0 21.1 36.1 12.8 24.5 i37.3 Other income iz2.1 zi2.1

• z2.1

iz2.1 Overheads n(4.5) (12.5) (17.0) z(2.7) (9.4) (12.1) Operating profit 10.5 35.5 46.0 10.1 35.8 i45.9 Interest b(0.8) (10.8) (11.6) (0.8) i(9.7) (10.5) Trading profit 9.7 24.7 34.4 z9.3 26.1 i35.4 Added value property valuation gain 14.9 z28.4 NCGM valuation movement (20.8) 128.0 Market property valuation movement 13.0 z20.4 SDLT (12.5)

• Other finance charges

zi1.0 z(6.5) Profit before all tax 30.0 205.7

38

COST COVERAGE

£m FY 2012 FY 2013 FY 2014 FY 2015 H1 2016 Net rental income 36.2 36.3 37.1 38.7 24.8 Other income 2.8 2.9 3.6 4.2 2.1 Income producing portfolio 39.0 39.2 40.7 42.9 26.9 Group overheads 18.6 20.2 23.2 26.5 17.0 Less direct residential costs* (1.2) (1.9) (2.0) (2.4) (1.9) Adjusted Group overheads 17.4 18.3 21.2 24.1 15.1 Interest 23.9 25.5 23.1 20.5 11.6 Business running cost 41.3 43.8 44.3 44.6 26.7 Cost coverage % 94% 89% 92% 96% 101%

*Direct residential costs are the total employee costs for dedicated residential employees only and exclude any allocation of Group resources

39

INCOME PRODUCING – TOP 10 TENANTS

£m* Alstom Group UK Ltd 4.0 Swansea University 2.7 Shanghai Automotive 1.7 Marks & Spencer 1.5 Knorr Bremse SFS 1.5 Paragon Automotive Services Ltd 1.4 Beko PLC 1.1 Arlington Fleet and Retail Group 1.0 Siemens Industrial Turbomachinery Ltd 1.0 Wireless Data Services 0.8

* Gross annual rent before minority interest or joint venture accounting

Top 10 of 1,700+ tenants across the portfolio, representing a third of Group income

40

RENTAL INCOME AND OCCUPANCY COSTS

31 May 2016 30 Nov 2015

£m £m Rent roll at start of period / year 58.4 45.4 Acquisitions / (disposals) (0.2) 2.4 58.2 47.8 Tenant vacations (2.7) (4.0) Tenant administrations

• (0.2)

Rent reviews 1.8 1.7 New lettings 5.2 13.1 Closing rent roll 62.5 58.4 Void percentage 11% 11%

87 88 89 89 89

10 20 30 40 50 60 70 80 90 100 FY 2012 FY 2013 FY 2014 FY 2015 HY 2016

%

Occupancy Rates

1

HY 2016

41

INCOME PRODUCING PORTFOLIO

Yield Analysis (including Group share of JVs) Equivalent Net initial 31 May 2016 30 Nov 2015 31 May 2016 30 Nov 2015 Retail 7.4% 7.6% 6.1% 6.1% Office 9.3% 8.9% 7.4% 6.6% Residential 4.6% 5.0% 4.6% 5.0% Industrial 8.4% 8.4% 8.3% 7.3% Portfolio 7.4% 7.7% 6.6% 6.5%

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

42

NET BORROWING MOVEMENTS

NET BORROWINGS MAINTAINED IN THE PERIOD THROUGH BALANCED ACQUISITIONS AND DISPOSALS (454) 24 1 3 200 (26) (213) (443)

300 350 400 450 500 550 600 650 700 Nov 2015 Net rents &

• ther income

Overheads & interest Tax & net dividends Working capital & finance leases Acquisitions & development Disposals May 2016

£m

43

CURRENT BANKING FACILITIES

AMPLE RESOURCES AND HEADROOM TO FUND SIGNIFICANT DEVELOPMENT PIPELINE

4.8% 4.4% 3.9% 3.8% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Nov 2014 May 2015 Nov 2015 May 2016

Weighted average interest rate

4.6 4.1 3.6 3.7 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Nov 2014 May 2015 Nov 2015 May 2016

Average facility maturity

years

31% 31% 30% 30% 30% 30% 31% 31% 32% Nov 2014 May 2015 Nov 2015 May 2016

See-through LTV

47% 44% 48% 48% 42% 43% 44% 45% 46% 47% 48% 49% Nov 2014 May 2015 Nov 2015 May 2016

Adjusted gearing

43

BANKING COVENANTS

Description Covenant Actual

31 May 2016 Net assets >£250m £939m Gearing <175% 54% See-through interest cover ratio >1.25x 3.9x See-through loan to value <65% 30%

• Net assets must be greater than £250m
• Gearing must not exceed 175%
• See-through interest cover ratio* must be greater than 1.25x
• See-through loan to value must not exceed 65%

* excludes non-cash items such as revaluation movements

45

PERFORMANCE SUMMARY

£m unless stated otherwise FY 2012 FY 2013 FY 2014 FY 2015 31 May 2016 Rental and other income 39.0) 39.2) 40.7) 42.9) 26.9) Property profits 29.0) 39.8) 51.3) 67.4) 36.1) Overheads (18.6) (20.2) (23.2) (26.5) (17.0) Interest (23.9) (25.5) (23.1) (20.5) (11.6) Trading profit (before revaluation movements) 25.5) 33.3) 45.7) 63.3) 34.4) Property portfolio (exc. assets under finance leases) 1,098.2) 1,141.8) 1,244.0) 1,638.5) 1,641.5) See-through net borrowings 448.7) 367.9) 380.2) 489.3) 500.6) See-through LTV 41% 33% 31% 30% 30% Net assets 513.7) 616.6) 724.0) 921.5) 939.4)

43

GLOSSARY

• Active management valuation: The

component of property revaluations delivered as a direct result of management actions and initiatives e.g. obtaining 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 other 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
• wned 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 of 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

• f 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
• f net borrowings to the property portfolio on

a proportional consolidated basis (including Group share of joint venture and associates)

• Trading profit: Operating income less
• perating costs