Ian Durant, Chairman of Capco, commented:
“Capco has delivered good progress in 2016 with considerable activity and milestones achieved at both Covent Garden and Earls Court. Despite macro-economic uncertainty, London is one of the great cities of the world; desirable as a retail destination and residential location. Looking through short-term market movements, Capco’s long-term strategy remains unchanged. We are confident in the strength of our two prime London assets and are well positioned to deliver long-term value creation for our shareholders.”
Ian Hawksworth, Chief Executive of Capco, commented:
“Capco has made significant progress at its two central London estates during 2016. Covent Garden has introduced high quality retailers and restaurants, resulting in a record year of leasing transactions, producing an uplift in value of 6 per cent to £2.3 billion and an increase in ERV of 8 per cent. At Earls Court, the first phase of demolition is now complete, de-risking the site and preparing the land for future development. Weakened sentiment in the residential market, following changes to stamp duty and political uncertainty, particularly in the first half of 2016, led to a valuation decline at Earls Court Properties of 20 per cent to £1.1 billion. As a result, EPRA NAV declined by 6 per cent to 340 pence per share. The strong demand for central London retail has continued in 2017 and Covent Garden has had a positive start to the year. We have increased the ERV target to £125 million by December 2020, reflecting the positive prospects of the estate. The first residents have moved into Lillie Square and additional units will be released over the coming months, now that the first release of Phase 2 is predominantly sold. Land enablement will continue at Earls Court and we intend to progress plans to increase the number of much needed homes as we maximize the potential of this strategic land holding. Capco remains focused on its strategy to deliver long-term value creation from its two unique central London estates. Backed by a strong balance sheet with low LTV and high liquidity, the Group is well positioned to withstand short-term market uncertainty and take advantage of opportunities as they arise.”
- Equity attributable to owners of the Parent £2.8 billion (H1 2016: £2.8 billion) (2015: £2.9 billion).
- EPRA NAV 340 pence per share, a decrease of 5.9 per cent (H1 2016: -4.7 per cent, H2 2016: -1.2 per cent) (2015: 361 pence).
- Total property value £3.7 billion, a decrease of 4.4 per cent (like-for-like) (H1 2016: -3.8 per cent, H2 2016: -0.6 per cent) (2015: £3.7 billion).
- Proposed final 2016 dividend of 1.0 pence per share providing a full-year dividend of 1.5 pence per share.
Strong performance at Covent Garden following record year of leasing activity; new ERV target:
- Total property value of £2.3 billion an increase of 6 per cent (like-for-like) (2015: £2.0 billion).
- 95 new leases and renewals transacted representing £13.3 million of income at 9 per cent above 31 December 2015 ERV.
- ERV increased by 8 per cent (like-for-like) to £96 million (2015: £86 million).
- New ERV target of £125 million by December 2020.
- Floral Court (formerly known as Kings Court) on track for completion towards the end of 2017.
- £85 million invested in acquisitions expanding ownership of the estate.
Significant progress on site at Earls Court:
- Earls Court interests valued at £1.1 billion, a decrease of 20 per cent (like-for-like) (2015: £1.4 billion).
- Completion of first phase of demolition of EC1 & EC2; final phase of demolition underway, preparing the site for future development.
- Representations submitted to GLA’s London Plan to enhance the Earls Court Masterplan.
- Construction of Phase 1 of Lillie Square progressing well and the first residents have moved in; sales of Phase 2 continue at a modest premium to comparable units in Phase 1.
Operational excellence at Venues:
- EBITDA of £19 million, up 29 per cent (2015: £15 million).
- Property valuation at £293 million, a decrease of 1 per cent (like-for-like) (2015: £295 million).
Strong financial position:
- Group loan to value ratio 23 per cent (2015: 16 per cent).
- Cash and available facilities of £556 million (2015: £412 million).
- Weighted average maturity extended to 5.9 years and average cost of debt reduced to 2.7 per cent.
- Capital commitments of £157 million (2015: £207 million).