Half year results presentation To 31 st May 2017 Disclaimer This - - PowerPoint PPT Presentation

Half year results presentation

To 31st May 2017

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.

Disclaimer

Balanced and diverse portfolio, well positioned for growth

• Commercial development proceeding in

line with expectations, growing pipeline for future delivery:

– active regional pipeline of 1.8m sq ft – delivered approx. 400,000 sq ft in H1 with rate of delivery increasing in H2 – weighted to sectors with good structural growth prospects

• Continued residential growth:

– 55% growth in St. Modwen Homes profits – average sales rates remain strong

• Good progress with major projects:

– exchanged contracts on the sale for the Nine Elms Square, NCGM – progressing the sale of student accommodation at the Bay Campus, Swansea 3 May 2017 May 2016 Nov 2016 EPRA NAV per share 468.4p 450.9p 460.5p Total Accounting Return 2.6% 1.8% 4.5% Commercial development profits £11.5m £21.1m £30.4m Residential development profits £13.4m £12.9m £27.1m Profit before all tax £29.3m £30.0m £60.8m Dividend per share 2.02p 1.94p 6.00p See-through net borrowings £580.3m £500.6m £517.0m See-through LTV ratio 33.1% 30.5% 30.5%

Four strategic objectives

• Potential >7.5m sq

ft to build out in medium term

• Industrial/

logistics focus

• Need to manage

risk carefully

Accelerate our commercial development activity Grow our residential and housebuilding business

• Potential >7,500

units for St. Modwen Homes to build out in medium term

• Potential >9,000

units third party land sales in medium term

• Need to manage

risk carefully

Cement and grow our regeneration reputation

• Deliver brilliantly on
• ur existing major

regeneration projects

• Longbridge
• Swansea
• NCGM
• Town centres
• Unlock the next

generation of regeneration

Portfolio focus and capital discipline

• Reduce borrowings

further

• Focus on fewer,

larger projects

• Focus on sectors

with best structural growth prospects

• Levels of activity to

be carefully balanced vs market conditions

Changing places. Creating better futures

4

Business and market overview

Commercial development

Near term committed pipeline

• Increased development pipeline to 1.8m sq ft from 1.6m

sq ft in November 2016, deliverable over next 18 months

• Focus on ‘sheds and beds’ – increase in industrial /

logistics and continued delivery at Bay Campus

• £246m total project cost, average yield on cost of approx.

8%, yield on completion of 6.5% and profit on cost of

• approx. 20%

–

• approx. £45m profits still to book
• Pipeline is 43% pre-let / pre-sold (November 2016: 41%)

– expect further progress

Medium term pipeline

• Prioritising 7.5m sq ft of Industrial / Logistics development

in A1 locations

• GDV of these sites approx. £700m, rental value approx.

£45m, land book value approx. £90m, land capex approx. £65m, build capex at approx. £425m and profit of approx. £115m

• Volume growth unlikely to exceed 25% per annum
• Offers potential to rebalance portfolio over time

6

Near term pipeline

Location / demand Deliverability (sq ft)* 1 2 3 Total A 7.5m 3.0m 2.2m 12.7m 74% B 1.9m 1.8m 0.0m 3.7m 21% C 0.0m 0.8m 0.1m 0.9m 5% Total 9.4m 5.6m 2.3m 17.3m 55% 32% 13%

Medium term pipeline

£689m 71% £144m 15%

£50m 5%

£140m 47% £52m 18% £52m 18% £51m 17%

Medium term opportunity

GDV £295m GDV £974m

£91m 9%

Industrial / logistics Student / PRS Office / Other Retail

* See slide 31 of appendix for definitions

Delivering value from the residential land bank

Residential land bank – total value £783m

• Residential land values stable in the first half of the year
• Continue to add value through planning gains
• Achieved residential land sales of £17m at or above book in

H1 (H1 2016: £14m), with approx. £40m anticipated for the full year

• Rate of disposal expected to be approx. £50m - £60m per

annum over medium term, with capex of £30m - £40m

Medium term pipeline

• 16,900 units deliverable in the medium term (excl. NCGM and

South Wales) – balanced between 7,700 units in the pipeline for St. Modwen Homes and 9,200 units for third party land sales

• Considering strategic options for large South Wales sites
• Opportunity to accelerate activity but likely to limit volume

growth of St. Modwen Homes to 25% per annum – prioritise A1 sites – larger sites require strategic approach 7

Total plots 25,230 NCGM / South Wales (10,730) Total plots excl. NCGM / South Wales 14,500 Third-party controlled 2,400 Pipeline: total residential plots 16,900

Location / demand Deliverability (units)* 1 2 3 Total A 6,450 1,750 1,760 9,960 59% B 4,300 940 1,240 6,480 38% C 340 120 460 3% Total 11,090 2,810 3,000 16,900 66% 17% 17%

Total residential plots (excl. NCGM and South Wales)

* See slide 31 of appendix for definitions

Continued strength in housebuilding

• St. Modwen Homes
• Continued growth will at least offset reduction in

profits from planned Persimmon JV in wind-down

• Build active on 17 sites with 3 new sites to be

added in H2

• Focus remains on quality

– 5 star housebuilder

• Targeting approx. 700 units in 2017 with approx.

80% of our target exchanged or reserved at the end of May

• Approx. 20% increase in private average selling

price – 4% increase on a like-for-like basis – balance due to increase in average unit size

• Margin will fall slightly in H2 due to higher

affordable completions

8

May 2017 May 2016 Nov 2016 Total units sold SMH:

• private

220 182 438

• affordable

10 20 47

• private sales rate SMH

0.8 0.6 0.8 Average number of sales active sites SMH 13 9 11 Average selling price SMH:

• private

£262k £199k £217k

• affordable

£86k £83k £90k Share of profit £m:

• SMH

9.0 5.8 15.3

• Persimmon JV (SMP

share) 4.4 7.1 11.8 Total residential (£m) 13.4 12.9 27.1 SMH operating profit margin 15.3% 15.2% 13.4%

Major regeneration projects

New Covent Garden Market

• Contracts exchanged for sale
• f our interest in Nine Elms

Square, to complete in the Summer as old flower market is demolished

• Works to interim flower market

now complete and facility is

• pen and trading

Bay Campus, Swansea University

Longbridge, Birmingham

• 40% of 468 acre site now

delivered following extensive remediation programme and providing excellent potential for future value creation

• Works to Extra Care and

RCDM close to completion

Applying our skills more broadly ...

• Over 2,000 student rooms

completed by September 2017

• Progressing with the sale of

student accommodation assets, taking advantage of strong investment demand for student housing

9

• 227 acre site already secured

in Wantage, Oxfordshire. Planning for 1,500 home to be delivered over next 10 – 15 years

• Other large scale residential
• pportunities being pursued
• Works to Food Exchange progressing well and construction of

fruit and vegetable market to commence this year

• Plans submitted for delivery of 65,000 sq ft phase 3 of

Longbridge town centre, a leisure led scheme with cinema, gym and restaurants

• Future phases of housing planned for St. Modwen Homes
• 30 acres (46% of site) remains for future development, to

complement University growth plans with planning for a further 2,000 student rooms

• St. Modwen Homes, 300 homes on site at Hendrefoilan

£64m 14% £238m 52% £119m 26% £34m 8%

Investment portfolio

Industrial/logistics Retail Student/PRS Office/other

Portfolio focus and capital discipline

• Industrial and logistics - £268m value

– good levels of occupier demand across the UK – continued valuation growth, in particular in the high- yielding portfolio where we are benefiting from ongoing asset management and lease re-gears – yields steady at 8.4% (Nov 2016: 8.4%)

• Retail - £341m value:

– modest outward movement in yields to 7.7% in May 2017 (Nov 2016: 7.5%), in line with expectations –

• pportunity for value creation through asset

management and development activity in high yielding portfolio – expect to recycle drier retail assets over time, replenishing with industrial / logistics pipeline

• Good progress in the targeted disposal of £100m

smaller asset portfolio

– proceeds of approx. £15m realised in H1, in line or slightly above book value 10

Equivalent yield May 2017 Nov 2016 Industrial / logistics 8.4% 8.4% Retail 7.7% 7.5% Student / PRS / other 5.9% 6.0% Total 7.6% 7.5%

Total value: £320m Average equivalent yield: 8.8% Average net initial yield: 6.6% £204m 64% £103m 32% £13m 4%

High yield portfolio

Total value: £455m Average equivalent yield: 6.6% Average net initial yield: 5.9%

Financial review

Highlights - a resilient performance in an uncertain market

• Resilient performance in uncertain market

environment:

– EPRA NAV up 1.7% to 468.4p – total accounting return of 2.6% – profit before all tax of £29.3m

• Business continues to perform in line with

expectations:

– commercial profits reduced by £9.6m, reflecting deliberate slow down post Brexit – stable valuation environment – continued strong contribution from residential – non cash interest charges markedly higher at £7.9m (H1 2016: credit of £1.0m), increased share price increases fair value liability of the convertible bond

• Continued strong balance sheet:

– net borrowings increased by £85m from net investment activity – post period end, exchanged contracts on Nine Elms Square sale – progressing sale of accommodation at Bay Campus, Swansea 12 May 2017 May 2016 Nov 2016 EPRA NAV per share 468.4p 450.9p 460.5p Total Accounting Return 2.6% 1.8% 4.5% Commercial development profits £11.5m £21.1m £30.4m Residential development profits £13.4m £12.9m £27.1m Trading profit £26.4m £34.4m £56.1m Profit before all tax £29.3m £30.0m £60.8m See-through LTV ratio 33.1% 30.5% 30.5% Interim/ total dividend per share 2.02p 1.94p 6.00p Earnings per share 12.1p 11.8p 24.1p

Summary profit and loss account

Notes:

• Stated on a proportionally consolidated basis including share of JVs
• Residential profits include direct residential overheads of £3.2m to 31 May 2017, £2.1m to 31 May 2016 and £4.5m in 2016

13 May 2017 £m May 2016 £m Nov 2016 £m Net rental and other income 27.0 26.9 50.1 Property profits ‒ commercial 11.5 21.1 30.4 ‒ residential 13.4 12.9 27.1 Overheads (14.0) (14.9) (29.3) Operating profit 37.9 46.0 78.3 Interest (11.5) (11.6) (22.2) Trading profit 26.4 34.4 56.1 Valuation movements (excluding NCGM) 10.6 15.4 28.4 Valuation movement (NCGM) 9.4 (20.8) (24.3) Increase in provision for NCGM market costs (9.2)

• Other finance income / (charges)

(7.9) 1.0 0.6 Profit before all tax 29.3 30.0 60.8 Earnings per share 12.1p 11.8p 24.1p Cost coverage 106% 101% 98%

Total residential profits

14

• St. Modwen Homes H1 net operating margins 15.3%
• Margin reflects land transfer from Group to St.

Modwen Homes at current market values rather than cost

• Including approx. £5m per annum of residential

planning gains margins would be approx. three to four percentage points higher

Nov 2016 Residential planning gains Nov 2016 pro-forma SMH revenue £114m

• £114m

SMH operating profit £15.3m £4.8m £20.1m SMH operating profit margin 13.4% 17.6%

Our actions driving continued NAV growth

May 2017 Nov 2016 Movement NAV per share 439.6p 431.0p 2.0% EPRA NAV per share 468.4p 460.5p 1.7%

980 18 13 12 11 962 850 900 950 1,000 1,050 Nov 2016 Residential dev profits Commercial dev profits Valuation gains exc NCGM Dividend / tax /

• ther

May 2017 £m

• Balanced growth delivered across residential and commercial developments, and value added gains.
• Market valuations continue to be subdued:

– industrial / logistics and student accommodation continue to be resilient, yields stable at 8.4% (Nov 2016: 8.4%) and 5.9% (Nov 2016: 6.0%) respectively – as anticipated, some weakness in retail with yield expansion to 7.7% (Nov 2016: 7.5%) – residential land values holding firm

15

Managing leverage

NET BORROWINGS MAINTAINED IN THE PERIOD THROUGH BALANCED ACQUISITIONS AND DISPOSALS

300 400 500 600 700 800 Nov 2016 Net rents,

• verheads &

interest Working capital, tax & dividends Acquisitions & development Disposals May 2017 Pro-forma NCGM sale May 2017 pro- forma

(70) 31 78 (191) 181 72 (47) (74)

(489) 50

(517) (580)

Notes:

• Prepared on a proportionally consolidated basis.
• Overheads in the above are stated on a cash basis and include overheads directly attributed to the residential business.

Commercial investment Residential development Acquisitions Residential land Commercial Residential units (2) (51)

• See-through net borrowings increased in H1 reflecting net investment activity,

will reduce in H2 with major asset sales.

• See-through LTV 33.1% (Nov 2016: 30.5%), and 59.7% (Nov 2016: 54.3%)

excluding residential land.

• Adjusting for sale of Nine Elms Square, see-through net borrowings reduced

pro-forma to £390m, LTV to 25%, LTV excluding residential land to 40%. £190m proceeds, of which £70m held in JV for future market construction

• Intention to hold LTV excluding residential land to under 40% over the

medium term

See-through net debt bridge

16 £m

(517) 190 (390)

0% 20% 40% 60% 80% 2013 2014 2015 2016 2017 H1 2017 H1 pro-forma

Trend in LTV ( ) and see-through LTV excluding residential land ( )

Impact of Nine Elms Square disposal

17

Post disposal £m

• St. Modwen

share £m Investment property ..10 ...51 Net cash funds 143 72 Other assets ….1 ..1 Gross assets 154 77 Shareholder loans

• Market construction obligation

(144) .(72)2 Deferred tax ….(1) ..(1) Other liabilities ..(15) ..(7) Gross liabilities (160) (80) Net assets ...(6) ..(3)

Notes: 1. Represents our 50% share of the value of Nine Elms Grove, Nine Elms Gardens and Thessaly Road sites retained after the disposal of Nine Elms Square. 2. Represents our 50% share of the discounted liability for the obligation to construct the market.

• Nine Elms Gardens, Nine Elms Grove and Thessaly Road sites (10 acres) held on the balance sheet at £10m

(St. Modwen share £5m)

• Market construction obligation is £250m, discounted to £216m. A total of £72m has been spent to date, leaving

£144m as the discounted liability (St. Modwen share £72m)

May 2017 £m NCGM disposal Pro-forma post disposal £m Property portfolio 1,813.4.. (202.5) 1610.9. Net borrowings (580.3) 190.0 (390.3) Other assets and liabilities (258.8) 12.5 (246.3) Equity attributable to

• wners of the Company

974.3

• 974.3

LTV 33.1% 25.2% LTV excl. residential land 59.7% 40.2%

Pro-forma see-through balance sheet VSM (NCGM) JV balance sheet

Continued financial flexibility

125 100 80 54 163 150 50 100 200 300 400 2017 renewal 2018 renewal 2019 renewal 2020 renewal 2021 renewal HSBC Barclays Santander

• Debt financing managed through a set of

agreed principles: – to diversify our sources of finance – phase the maturity of our debt portfolio – maintain liquidity – maintain flexibility – maintain strong balance sheet metrics – maintain a cost-effective debt structure

• We continue to operate with good levels of

financial flexibility: – weighted average facility life of 3.2 years – see-through headroom of £142m – weighted average cost of debt of 3.7% – 65% of our borrowings fixed / hedged

See-through net borrowing facilities

£m

Retail bond RBS Convertible bond Share of JV facilities 4.6 3.6 3.7 3.2 2 3 4 5 Nov 2014 Nov 2015 Nov 2016 May 2017

Average facility maturity 18

years

Summary and outlook

Summary and outlook

• Resilient performance across the business in an

uncertain market

• Strategy and portfolio review confirms potential in

business – well-positioned for ongoing structural shifts in UK economy

• Four strategic objectives against which future

performance will be reported – accelerate commercial development activity – grow our residential housebuilding business – cement and grow our regeneration reputation – portfolio focus and capital discipline

20

Appendices

• St. Modwen Properties PLC

22

Timeline

23

Portfolio movements

Notes:

• Stated on a proportionally consolidated basis, including share of joint ventures. See note 2 to the consolidated Group financial statements
• Net additions include purchases, capital expenditure and reclassifications
• Residential land market valuation gain includes £9.4m relating to NCGM

24

Valuation movement Nov 2016 Net Additions Disposals Other Updated Portfolio Market

• St. Modwen

Added May 2017 Income generating portfolio High-yielding assets

• industrial / logistics

201.5 2.6

• (4.3)

199.8 2.9 1.4 204.1

• retail

100.9 1.7

• 1.7

104.3 (0.6) (0.3) 103.4

• offices

7.3 0.2

• 4.3

11.8

• 0.8

12.6 Subtotal 309.7 4.5

• 1.7

315.9 2.3 1.9 320.1 Investment portfolio

• industrial / logistics

82.0 0.3 (22.7) 3.8 63.4 (0.5) 0.8 63.7

• retail

241.3 0.5 (0.1)

• 241.7

(3.8) 0.6 238.5

• PRS / student / other

153.7 0.1 (3.4)

• 150.4

(0.1) 2.8 153.1 Sub-total 477.0 0.9 (26.2) 3.8 455.5 (4.4) 4.2 455.3 Total income-generating portfolio 786.7 5.4 (26.2) 5.5 771.4 (2.1) 6.1 775.4 Residential land 742.0 116.7 (90.8) 2.0 769.9 9.4 3.5 782.8 Commercial land 223.6 74.3 (38.3) (7.5) 252.1 (0.1) 3.2 255.2 Total 1,752.3 196.4 (155.3)

• 1,793.4

7.2 12.8 1,813.4

Income producing portfolio – yields

Equivalent yield Initial yield Valuation (£m)

May 2017 Nov 2016 May 2017 Nov 2016 May 2017 Nov 2016 High yielding assets

• industrial / logistics

8.6% 8.7% 6.5% 7.4% 204.1 201.5

• retail

9.5% 9.0% 7.1% 7.7% 103.4 100.9

• ther

9.5% 9.8% 4.7% 7.7% ..12.6 …7.3 Subtotal 8.8% 8.9% 6.6% 7.5% 320.1 309.7 Investment portfolio

• industrial / logistics

7.4% 6.9% 6.0% 6.9% ..63.7 ..82.0

• retail

6.8% 6.6% 5.8% 6.1% 238.5 241.3

• student / PRS / other

5.4% 5.4% 5.4% 5.4% 153.1 153.7 Subtotal 6.6% 6.3% 5.9% 6.0% 455.3 477.0 Total income producing 7.6% 7.5% 6.7% 6.7% 775.4 786.7 25

Commercial development gathering momentum

*As at 31st January 2017

• No. of

schemes Sq ft (000) Pre- let/sold %* Cost to complete £m Total cost £m Expected value on completion £m Yield on cost Profit on cost approx. %

Movement during year: Position at Nov 2016 29 1,620 41% 136 199 237 Sold / transferred to investment properties (9) (423) Schemes added to the pipeline 11 610 Position at May 2017 31 1,807 43% 109 246 295 Analysis of position at May 2017: Industrial / logistics 19 1,253 27% 55 116 140 8.6% 20% Retail 7 247 56% 12 46 52 8.6% 15% Student / PRS 2 115 100% 37 42 52 5.4% 25% Other 3 192 91% 5 42 51 7.9% 20% Total 31 1,807 43% 109 246 295 8.0% 20% 26

Strong balance sheet

Notes:

• This table is presented on a proportionally consolidated basis, including the Group’s share of assets and liabilities of Joint Ventures and Associates in the balance sheet

categories to which they relate, rather than on a statutory basis as one line representing the share of net assets of those joint ventures and associates.

27 Group Share of JVs May 2017 £m Nov 2016 £m Property portfolio 1,462 351 1,813 1,753 Other assets 136 33 169 166 Gross assets 1,598 384 1,982 1,919 Net borrowings (555) (25) (580) (517) Finance leases (56) (1) (57) (58) Other liabilities (187) (178) (365) (382) Gross liabilities (798) (204) (1,002) (957) Net assets 800 180 980 962 Non-controlling interests (6) (6) (7) Shareholders’ funds 794 180 974 955 NAV per share 439.6p 431.0p EPRA NAV per share 468.4p 460.5p See-through LTV 33.1% 30.5%

VSM (NCGM) balance sheet

28 May 2017 £m Disposal £m Post disposal £m St. Modwen share £m Investment property 415 (405) 10 51 Net cash funds 3 140 143 72 Other assets 1

• 1

1 Gross assets 419 (265) 154 77 Shareholder loans (89) 89

• Market construction obligation

(144)

• (144)

(72)2 Deferred tax (34) 33 (1) (1) Other liabilities (8) (7) (15) (7) Gross liabilities (275) 115 (160) (80) Net assets 144 (150) (6) (3)

Notes: 1. Represents our 50% share of the value of Nine Elms Grove, Nine Elms Gardens and Thessaly Road sites retained after the disposal of Nine Elms Square. 2. Represents our 50% share of the discounted liability for the obligation to construct the market.

NCGM disposal - balance sheet impact

Notes: This table is presented on a proportionally consolidated basis, including the Group’s share of assets and liabilities of Joint Ventures and Associates in the balance sheet categories to which they relate, rather than on a statutory basis as one line representing the share of net assets of those joint ventures and associates. 1. Represents our 50% share of the disposal of £470m of Nine Elms Square, less overage of £45m and enabling costs of £20m. 2. Assumes that £120m of cash is remitted to the Group, with £45m repaying loans and interest with VSM(NCGM) and £75m received as a dividend. 3. Represents our 50% share of £140m of cash retained in a development account from the proceeds after deducting overage, tax and funds remitted to shareholders. This account is used to fund construction of the market, of which circa £30m is returned the Group as development progresses on the market and circa £40m on completion of construction. 4. Represents the repayment of shareholder loans, the payment of tax from the net proceeds and the recognition of enabling costs.

29

As at 31 May 2017 (£m) NCGM disposal (£m) Post disposal (£m) Group JV Share Total Group JV Share Total Group JV Share Total Property portfolio 1,462 351 1,813

• (203)2

(203) 1,462 148 1,610 Other assets 136 33 169 (45)2

• (45)

91 33 124 Gross assets 1,598 384 1,982 (45) (203) (248) 1,553 182 1,734 Net borrowings (555) (25) (580) 1202 703 190 (435) 45 (390) Finance leases (56) (1) (57)

• (56)

(1) (57) Other liabilities (187) (178) (365)

• 584

58 (187) (120) (307) Gross liabilities (798) (204) (1,002) 120 128 248 (678) (76) (754) Net assets 800 180 980 75 (75)

• 875

105 980 Non-controlling interests (6)

• (6)
• (6)
• (6)

Shareholders’ funds 794 180 974 75 (75)

• 869

105 974 Gearing 62.4% 65.1% (12.3)% (19.4)% 50.1% 45.7% Adjusted gearing 56.6% 59.2% (12.2)% (19.4)% 44.4% 39.8% Loan to value 39.5% 33.1% (8.5)% (7.9)% 31.0% 25.2% Loan to value (excl. resi land) N/A 59.7% N/A (19.5)% N/A 40.2%

Long standing, successful joint venture arrangements

• Four material joint ventures
• Three in partnership with

VINCI PLC (VSM), of which Uxbridge and Mill Hill are engaged in the remediation and subsequent sale of land

• Key Property Investments

(KPI) is in partnership with

• Salhia. It owns a broad

portfolio of principally income-producing industrial assets

Note: *This metric is not applicable to these joint ventures as they have no borrowing facilities.

KPI VSM Estates Uxbridge VSM Estates Mill Hill VSM NCGM May 2017 Property portfolio (£m) 174.1 58.0 27 .6 415.0 NAV (£m) 116.4 17.1 45.6 143.9 Net borrowings (£m) (47.6) (15.3) 5.1 2.7 LTV 27.3% 26.4% N/a* N/a* Profit before all tax (£m) 15.0 (7 .3) (0 .7) (10 .5)

• St. Modwen share

50% 50% 75% 50% Nov 2016 Property portfolio (£m) 199.2 95.2 39.5 395.0 NAV (£m) 112.2 22.8 46.3 150.4 Net borrowings (£m) (74.8) (25.2) 1.5 1.2 LTV 37.6% 26.5% N/a* N/a* Profit before all tax (£m) 9.6 (7.2) (4.1) (50 .8)

• St. Modwen share

50% 50% 75% 50% 30

Commercial development and residential pipeline

31

Location / demand Deliverability (sq ft) 1 2 3 Total A 7.5m 3.0m 2.2m 12.7m 74% B 1.9m 1.8m 0.0m .3.7m 21% C 0.0m 0.8m 0.1m .0.9m .5% Total 9.4m 5.6m 2.3m 17.3m 55% 32% 13% Location/ demand

Deliverability A Strong sustained demand due to a combination of macro and micro economic factors 1 Immediately deliverable, with excellent demand

• potential. Vast majority with
• utline or detailed planning

consent B Good sustained demand due to a combination of macro and micro economic factors 2 Subject to detailed planning, answering ongoing demand C Site offers future development potential 3 Subject to planning and infrastructure

Location / demand Deliverability (units) 1 2 3 Total A ..6,450 1,750 1,760 9,960 59% B ..4,300 …940 1,240 6,480 38% C ….340 …120 ……0 …460 ..3% Total 11,090 2,810 3,000 16,900 66% 17% 17%

Commercial development pipeline Total residential plots (excl. NCGM and South Wales)

Location/ demand

Deliverability A Strong sustained demand due to a combination of macro and micro economic factors 1 Owned site with planning B Good sustained demand due to a combination of macro and micro economic factors 2 Owned site pursuing planning C Site offers future development potential 3 Third party controlled

Glossary

• Added value 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 to total

equity

• Cost cover ratio: The ratio of recurring rental and
• ther income to operating costs
• ERV: Estimated rental value
• Gross development value (GDV): The sale value
• f property after construction
• High yielding portfolio: High yielding assets held in

the income generating portfolio that provide opportunity for further development and value creation in the long term

• 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)

• Investment portfolio: Assets held in the income

generating portfolio where our development and asset management activities are substantially complete

• Land bank: 100% of land and property owned and

controlled by the Group together with joint ventures and associates

• Net borrowings: Total borrowings (at amortised

cost and excluding finance leases and fair value movements on the Group’s convertible bonds) less cash and cash equivalents

• Net debt: Total debt (including finance leases) less

cash and cash equivalents

• Net equivalent yield: Weighted average income

return (after adding notional purchaser’s costs) a property will produce based upon the timing of the income received. In accordance with usual practice, the equivalent yields (as determined by the external valuers) assume rent is received annually in arrears

• Net initial yield: Current annualised rent, net of

costs, expressed as a percentage of capital value, after adding notional purchaser’s costs

• Net rental income: Rental income receivable less

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

• 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

• n disposals of investments / investment properties for

the Group (including its share of joint ventures and associates)

• Average lease length: The weighted average lease

term to the first tenant break

• See-through loan-to-value ratio: see-through net

borrowings expressed as a percentage of the Group’s property portfolio excluding valued assets held under finance leases, calculated on a proportionally consolidated basis (including the Group’s share of its joint ventures and associates)

• See-through loan to value ratio (excluding

residential land): see-through net borrowings

expressed as a percentage of the Group’s property portfolio excluding assets held under finance leases and residential land, calculated on a proportionally consolidated basis (including the Group’s share of its joint ventures and associates)

• See-through net borrowings: Total borrowings (at

amortised cost and excluding finance leases and fair value movements on the Group’s convertible bonds) less cash and cash equivalents (all including the Group’s share of its joint ventures and associates). This includes the development account beneficially

• wned by one of our joint ventures, VSM (NCGM) Ltd,

held for the purpose of funding the establishment of a market at Nine Elms, which would otherwise need to be funded by injecting cash into the joint venture in the future

• Total accounting return: Increase in EPRA NAV

per share for the year plus dividends paid during the year, expressed as a percentage of opening EPRA NAV per share

• Trading profit: Operating income less operating

costs

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