REG - Shaftesbury Capital - Final Results
27/02/2025 07:15
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RNS Number : 6149Y Shaftesbury Capital PLC 27 February 2025
PRESS RELEASE
SHAFTESBURY CAPITAL PLC ("THE COMPANY")
AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
27 February 2025
A YEAR OF GROWTH
Ian Hawksworth, Chief Executive, commented:
"We are delighted to deliver a strong set of results for 2024. Our West End
estates continue to be busy and vibrant with high footfall and customer sales
growth. There continues to be strong leasing demand with 473 transactions
completed 9 per cent ahead of December 2023 ERV, with an excellent leasing
pipeline. Valuation has increased 4.5 per cent driven by strong ERV growth.
The momentum of 2024 has continued into the current year. With our strong
balance sheet, we are well-positioned to capitalise on market opportunities
and confident of delivering further growth as the leading central London
mixed-use REIT."
Highlights
· EPRA NTA of 200.2 pence per share, up 5.2 per cent (Dec 2023: 190.3 pence per share)
· Portfolio valuation increased by 4.5 per cent on a like-for-like basis at £5.0 billion (Dec 2023: £4.8 billion) driven by 7.7 per cent ERV growth offset by a marginal outward yield movement of 13 basis points like-for-like to 4.45 per cent equivalent yield
· Underlying earnings increased by 16.2 per cent to 4.0 pence per share (pro forma FY 2023: 3.4 pence per share) and proposed total dividend for 2024 of 3.5 pence per share, up 11 per cent relative to 2023 3.15 pence per share
· 473 leasing transactions, representing £48.7 million of contracted rent, 9 per cent ahead of December 2023 ERV and 14 per cent ahead of previous passing rents
· 8.0 per cent like-for-like increase in annualised gross income to £202.8 million (Dec 23: £192.8 million) and 7.7 per cent like-for-like increase in ERV to £250.6 million (Dec 23: £236.9 million)
· High occupancy: 2.6 per cent of ERV available to let (Dec 2023: 2.1 per cent)
· Customer sales were up 3.1 per cent on a like-for-like basis relative to 2023
· £246.6 million of disposals completed since merger, with £86 million reinvested in acquisitions improving the quality of our portfolio
· In addition, sale of 50 per cent interest in Longmartin to our joint venture partner for net cash consideration of £94 million
· Strong balance sheet with access to £560 million of liquidity, net debt of £1.4 billion (Dec 2023: £1.5 billion) and EPRA loan-to-value ratio of 27 per cent (Dec 2023: 31 per cent)
KEY FINANCIALS
Note As at As at 31 December 2023
31 December
2024
Total equity 3 £3,674.3m £3,480.2m
Total equity per share 3 200.4p 190.3p
Total accounting return 7.0% 5.8%
EPRA net tangible assets 3 £3,671.1m £3,479.4m
EPRA net tangible assets per share 3 200.2p 190.3p
Total property return 7.6% 2.2%
Property portfolio market value 10 £4,973.5m £4,795.3m
L-f-L valuation movement (FY) +4.5% -0.8%
L-f-L valuation movement (H2) +3.1% -1.0%
L-f-L ERV growth (FY) +7.7% +6.9%
L-f-L ERV growth (H2) +4.7% +3.5%
Note For the year For the year
ended ended
31 December 31 December 2023
2024
Gross profit 4 £167.1m £141.9m
Profit for the year(1) £252.1m £750.4m
Basic earnings per share 3 13.8p 45.5p
Headline earnings per share 3 3.4p 0.6p
EPRA earnings per share(2) 3 4.1p 4.1p
Underlying earnings per share(3) 3 4.0p 3.7p
Dividend per share 9 3.5p 3.15p
Total shareholder return (6.9%) 33.1%
1. Refer to the 'Consolidated income
statement'.
2. Prior year comparatives have been
represented based on changes to EPRA earnings following the publication of
updated EPRA Best Practice Recommendations Guidelines in September 2024.
3. Had the all-share merger of Capital
& Counties Properties PLC and Shaftesbury PLC completed on 1 January 2023,
the underlying earnings of the Group would have been 3.4 pence per share.
Presentation of information
The all-share merger of Capital & Counties Properties PLC ("Capco") and
Shaftesbury PLC to create Shaftesbury Capital PLC ("Shaftesbury Capital")
completed on 6 March 2023. The financial information included within the
annual results of Shaftesbury Capital with the statement of comprehensive
income for the prior period reflects the standalone performance of Capco for
the period 1 January to 6 March and the performance of the merged business,
Shaftesbury Capital, between the completion date of 6 March 2023 and 31
December 2023.
Refer to Glossary of terms.
Enquiries:
Shaftesbury Capital PLC +44 (0)20 3214 9150
Ian Hawksworth Chief Executive
Situl Jobanputra Chief Financial Officer
Sarah Corbett Director of Commercial Finance and Investor Relations
Media enquiries:
UK: Hudson Sandler Michael Sandler +44 (0)20 7796 4133
UK: RMS Partners Simon Courtenay +44 (0)20 3735 6551
SA: Instinctif Louise Fortuin +27 (0)11 447 3030
A presentation to analysts and investors will take place today at 10:00am (UK
time) at the offices of UBS, 5 Broadgate, London, EC2M 2QS. The presentation
will also be available to analysts and investors through a live audio call and
webcast and after the event on the Group's website at
www.shaftesburycapital.com (http://www.shaftesburycapital.com)
A copy of this announcement is available for download from our website at
www.shaftesburycapital.com (http://www.shaftesburycapital.com)
About Shaftesbury Capital
Shaftesbury Capital PLC ("Shaftesbury Capital") is the leading
central London mixed-use REIT and is a constituent of the FTSE-250 Index.
Our property portfolio, valued at £5.0 billion, extends to 2.7 million
square feet of lettable space across the most vibrant areas of London's West
End. With a diverse mix of shops, restaurants, cafés, bars, residential
apartments and offices, our destinations include the high footfall, thriving
neighbourhoods of Covent Garden, Carnaby, Soho and Chinatown. Our properties
are close to the main West End Underground stations and transport hubs for the
Elizabeth Line. Shaftesbury Capital shares are listed on the London Stock
Exchange ("LSE") (primary) and the Johannesburg Stock Exchange ("JSE")
(secondary) and the A2X (secondary).
Our purpose
Investing to create thriving destinations in London's West End where people
enjoy visiting, working, and living.
Our values
We have a set of values that are fundamental to our behaviour, decision making
and the delivery both of our purpose and strategy: Act with integrity; Take a
creative approach; Listen and collaborate; Take a responsible, long-term view;
and Make a difference.
CHIEF EXECUTIVE STATEMENT
Overview
Having set a clear and focused strategy, we have delivered excellent
operational performance throughout 2024 with rental income and valuation
growth. Footfall across our prime West End portfolio is high, with customer
sales up 3.1 per cent year on year. There are excellent levels of activity,
limited vacancy and a number of customers taking multiple units across the
portfolio. The strong leasing activity and pipeline supports our medium-term
growth targets.
This year, our portfolio valuation is up by 4.5 per cent, resulting in 10
pence increase in EPRA NTA per share to 200 pence per share. Despite the
challenging macro-economic backdrop, we continue to deliver positive
operational performance. Leasing ahead of previous passing rents and cost
discipline has resulted in growth in underlying earnings. Like-for-like rental
growth was 5.7 per cent and underlying earnings have increased by 16.2 per
cent over the year.
Shaftesbury Capital has a strong balance sheet and significant liquidity to
take advantage of market opportunities. Although the wider central London
investment market for larger lot sizes has been relatively quiet, the West End
market for smaller lot sizes has been active. Since merger, proceeds of over
£246.6 million have been realised from property disposals and £94 million
realised from exiting our 50 per cent interest in the Longmartin joint
venture. £86 million has been reinvested in targeted acquisitions on core
streets with excellent rental growth prospects. The pipeline of asset
acquisitions is encouraging, with a number of buildings currently under
review.
We are committed to reducing the impact of our operations on the environment.
We continue to take a responsible approach, operating in an environmentally
sustainable manner and engage with our stakeholders to benefit the West End.
Confidence in the strength of our West End portfolio
London and particularly our West End portfolio continues to display its
enduring appeal as a leading global destination, with international arrivals
now ahead of 2019 levels. Vacancy rates, not only in our portfolio but across
prime West End retail units continue to reduce and are also back in line with
pre pandemic levels creating competitive tension for prime space. Footfall has
been consistently high, with the Elizabeth Line enhancing transport
connectivity for visitors, shoppers, workers and tourists alike. Our West End
portfolio is the destination of choice for both market entry and expansion,
with occupiers seeking superior quality, sustainable space with high amenity
value.
We are well-positioned to deliver on our medium-term targets of 5 to 7 per
cent ERV growth, and with stable yields, 8 to 10 per cent Total Accounting
Return per annum. Despite the well-documented macro-economic uncertainty, the
West End continues to perform. Through our active approach to leasing and
asset management, we continue to deliver ERV growth with ongoing positive
momentum. 473 leasing transactions completed during the year, 9.1 per cent
ahead of December 2023 ERV, in turn delivering 7.7 per cent ERV growth. The
increased scale and depth of the portfolio provide opportunities to support
the growth of our customers with over 30 customers having upsized or expanded
across the portfolio since completion of the merger.
There is significant potential from each of our locations with rental
reversion embedded across the portfolio with current ERV, 24 per cent above
annualised gross income. We are seeing the benefit of incorporating Seven
Dials and Opera Quarter with the Covent Garden Piazza unifying the Covent
Garden district, through our leasing, asset management and marketing activity.
Our customers are responding positively with demand for available shops and
restaurants. We have been able to make changes in Seven Dials at pace,
reinforcing consumer interest in the wider Covent Garden area and delivering
leasing performance and customer sales growth. 33 new concepts have been
introduced to the district this year.
There has been good progress on evolving our offer in Soho, including Carnaby
Street, through our targeted leasing programme, introducing differentiated
concepts, relevant to the consumer with 21 new signings over the year. Our
brand and category selection criteria are designed to generate higher
productivity, whilst taking inspiration from the area's rich heritage. Based
on our consumer data and experience, the average spend and dwell time has the
potential to be significantly higher. Accordingly, we are introducing concepts
in Carnaby which should be supportive of rental growth over time.
In Chinatown we are introducing more variety, choice and new concepts to the
area increasing the pan-Asian offering at a range of price points, which is
delivering good rental growth.
The office portfolio is performing well, with robust demand for well-fitted
space. During the year, we completed a significant office refurbishment
pipeline across 77,000 square feet, with rents for well-fitted, high-quality
space regularly achieving more than £100 per square foot. Our residential
offer continues to appeal to a broad range of occupiers delivering rental
growth and limited vacancy.
Placing the customer at the heart of our business
We continue to place the customer at the heart of our business, great
accommodation and service, focusing on providing lively, differentiated
experiences for visitors, local workers and residents. Our marketing programme
across the portfolio focuses on the consumer calendar, best in class
experiences and digital reach, all of which supports the footfall and sales
prospects in our destinations. The portfolio had a very successful Christmas
trading period with a programme of festive events and shopping evenings;
footfall across the portfolio in the last quarter was up 6.6 per cent compared
to Q4 2023. Our digital engagement and followers continue to grow across all
destinations, and we have launched new Soho and Carnaby Street branding which
has been well received, aligning these locations more closely. Our
collaborative approach provides brands with an opportunity to participate in
the marketing of the estates, particularly through digital channels and
activations. Through events and brand collaborations, we have increased
revenue from our non-leased income activities, whilst benefiting stakeholders
across the wider West End.
As well as maintaining close contact and presence on our estates, during the
year, we launched a customer survey to identify improvements across our
operating platform to provide enhanced service to our customers. We have
improved our data environment and are now proactively utilising our data
sources and insights on customer trends more effectively to support leasing
activity and identify opportunities across the portfolio. We will continue to
improve our processes and explore the use of AI and emerging technology.
Leasing and asset management translating into valuation growth
The valuation of the wholly-owned property portfolio increased by 4.5 per cent
(like-for-like) in the year to £5.0 billion, implying a capital value
equivalent to £1,833 per square foot on average, well below replacement cost.
ERV increased across all uses by 7.7 per cent blended (like-for-like) with
particularly strong rental growth in prime retail.
The equivalent yield was 4.45 per cent, reflecting 13 basis points of
like-for-like outward movement over the year (+9 basis points H1 2024, +4
basis points H2 2024). The equivalent yield for the commercial portfolio
(excluding residential) is approximately 4.6 per cent. Total property return
for the year was 7.6 per cent versus the MSCI Total Return Index which
recorded 7.0 per cent.
Interest rates are moderating, albeit more slowly which has impacted the
broader investment market, however investment yields in prime West End, which
comprise predominantly freehold properties and often smaller lot-sizes, remain
relatively stable. There is a broad pool of domestic and international
investors attracted to prime West End real estate, where investment can
provide the prospect of high occupancy, good demand for space and reliable
growth in long-term cash flows as demonstrated by recent sales at or above
valuation.
Investment activity
Our investment activity is focused on our three core locations, Covent Garden,
Carnaby | Soho and Chinatown. We maintain an active and disciplined approach
to capital allocation and look at opportunities to expand selectively, adding
to our growth prospects. Our approach is to assess the merits of all capital
decisions including investment in our portfolio and repositioning
opportunities, accretive acquisitions, the disposal of non-strategic assets
and the return of surplus capital to shareholders as appropriate.
We are well-positioned with access to significant liquidity to take advantage
of market opportunities and will rotate capital as appropriate, enhancing the
quality of our portfolio. Since merger, we have realised £246.6 million at a
premium overall to valuation, meeting our objective to initially recycle
approximately 5 per cent of portfolio value. In addition, we completed the
sale of our 50 per cent interest in the Longmartin investment to the joint
venture partner for net cash consideration of £94 million.
To date we have deployed £86 million in acquisitions, and the pipeline of
asset acquisitions is encouraging, with a number of buildings currently under
review. Our focus is on acquiring properties which enhance and complement our
existing ownership and have the potential to generate sustainable long-term
growth in income and capital values.
Active asset management and refurbishment initiatives continue with capital
expenditure of approximately 1 per cent of portfolio value per annum on
average to enhance value and environmental performance across the estate.
Growth in rents, underlying earnings, dividends and EPRA NTA
Shaftesbury Capital's total accounting return for the year was 7.0 per cent.
NTA increased by 5.2 per cent over the year to 200 pence per share (Dec 23:
190 pence per share). Annualised gross income increased by 8.0 per cent
to £202.8 million. ERV increased by 7.7 per cent (like-for-like) to £250.6
million, 24 per cent above annualised gross income. For the first time
portfolio ERV is ahead of pre pandemic levels in absolute terms, however
retail ERVs remain 6 per cent below 2019 levels. EPRA vacancy has reduced to
3.9 per cent (Dec 2023: 4.9 per cent) with 2.6 per cent available to let and
the balance under offer.
There have been significant cost savings across the business as we progress
towards an effective and efficient organisational structure and cost base. The
EPRA cost ratio is 37 per cent (Dec 2023: 40 per cent), having reduced from
over 50 per cent at merger and we are targeting a reduction towards 30 per
cent. Underlying administration costs were £39.4 million for the year,
having reduced significantly since merger. Underlying earnings for the year
are £73.0 million, equivalent to 4.0 pence per share and the Board has
proposed a final dividend of 1.8 pence per share taking the total dividend
for the year to 3.5 pence per share, up 11 per cent, reflecting the
progression in underlying and cash earnings.
We maintain a strong balance sheet with a focus on flexibility and efficiency.
EPRA LTV is 27 per cent and the interest cover ratio is 2.9 times, with ample
headroom against debt covenants. During the year, a new £75 million unsecured
loan facility was entered into, the one-year extension option on the £350
million senior unsecured loan facilities has been exercised and we completed
the refinancing of the £300 million revolving credit facility extending the
maturity to 2028. In combination with cash deposits, the Group has access to
£560 million liquidity ensuring it is well-positioned to act on market
opportunities.
Our people, values and culture
Our people are one of our competitive strengths. I am proud of the creativity
and enthusiasm shown by the team demonstrating our corporate values whilst
delivering high performance. During the year, we carried out an employee
survey, with a very high participation rate of 92 per cent and an overall
engagement score of 82 per cent, ahead of the global benchmark. Overall, the
employee feedback received within the survey was positive and where areas of
improvement have been identified, actions are being taken to implement change.
We continue to invest in the personal development of our people and have
introduced a number of initiatives to support our colleagues, providing
greater career development opportunities over time.
Our sustainable approach
Our Environment, Sustainability and Community strategy delivers value for our
stakeholders through our long-term, responsible stewardship of our
destinations. Our sustainability strategy is founded in future proofing our
heritage buildings and creating sustainable and healthy places where people
enjoy visiting, working and living. We are committed to meeting our 2030
carbon reduction targets and have reset our Net Zero Carbon target to 2040 to
align with the Science Based Targets initiative ("SBTi") long-term carbon
reduction targets, achieving SBTi validation in January 2025.
We have already made great progress in reducing our carbon emissions and,
working with our customers, will continue to decarbonise energy where
practical by replacing gas with electricity. Our customer survey also covered
sustainability, in order to provide customer insights on our sustainability
actions and better understand their priorities.
We continue to work towards our aim to be a leader in sustainable heritage
buildings. Through our ongoing refurbishment programme, we continue to improve
the energy efficiency of our buildings. 88 per cent of our portfolio by ERV
has EPC ratings of A-C and 70 per cent of commercial assets have EPC rating of
A-B. Key sustainability activities include investment in our buildings,
prioritising pedestrians where possible through initiatives to enhance the
public realm, improving air quality and our extensive greening programme. As
we look ahead, we will utilise technology and innovation to enhance our
activities and continue to work closely with customers and other stakeholders
to help deliver shared sustainability goals.
Community engagement
As a responsible, long-term investor, community engagement and collaboration
are integral to our strategy and activities. As an active part of the
community, being a good neighbour is important to us. We value the communities
that make our places thrive. Our community programme prioritises initiatives
and charity partners in the boroughs of Westminster and Camden. This includes
financial support, the provision of space and employee volunteering time. Our
approach includes supporting charities focused on education and employment
opportunities, addressing issues of homelessness and food hardship, veterans
and connecting older people in the local community. We have partnerships with
hospitality, cultural and retail foundations.
With our experience and knowledge of the West End, we make an important
contribution to safeguarding its long-term appeal and prospects. We continue
to work with our local authorities and residents to make public realm
enhancements to improve the experience and appeal of our vibrant destinations
for visitors, workers, residents, businesses and communities.
Outlook
We are confident in the growth prospects of our West End portfolio which
continues to demonstrate its enduring appeal. Despite the well-documented
macro-economic uncertainty, the West End continues to perform. Footfall is
high, with continued customer sales growth, limited vacancy and a strong
leasing pipeline. We have delivered growth in cash rents, ERV and valuation,
and we expect continued performance with our rents and valuation well
underpinned and are positioned for further growth. As long-term responsible
owners, we are committed to implementing our environmental, sustainability and
community strategy.
Prime central London real estate continues to attract capital, and we see
opportunities for investment and expansion within and alongside our portfolio.
Shaftesbury Capital has a strong balance sheet and significant liquidity to
take advantage of market opportunities. The quality of our portfolio, our
active approach and the positive market fundamentals of the West End give us
confidence in our target of 5 to 7 per cent rental growth, which with stable
yields, would deliver total accounting returns of 8 to 10 per cent over the
medium-term. Through active asset management of our irreplaceable prime West
End portfolio together with the competitive advantage of our operating
platform, we are focused on delivering sustainable long-term rental income,
value, earnings and dividend growth.
Ian Hawksworth
Chief Executive
26 February 2025
OPERATING AND PORTFOLIO REVIEW
Overview
Shaftesbury Capital owns an impossible to replicate portfolio that extends to
2.7 million square feet of lettable space across the most vibrant areas of
London's West End. The Group's portfolio of adaptable mixed-use buildings
provides diversified income streams with a long history of occupier demand
exceeding availability of space. With a diverse mix of shops, restaurants,
cafés, bars, residential and offices, our destinations include the high
footfall, thriving neighbourhoods of Covent Garden, Carnaby Street, Soho and
Chinatown. Our properties are located at the heart of the West End's
entertainment and cultural attractions, benefitting from excellent
connectivity through close proximity to the main West End Underground stations
and transport hubs for the Elizabeth Line.
Delivering valuation growth
The valuation of the wholly-owned property portfolio increased by 4.5 per cent
on a like-for-like basis to £5.0 billion, equivalent to £1,833 per square
foot on average (Dec 2023: £1,680 per square foot). The valuation gain has
been driven by leasing and asset management activity particularly in the
retail portfolio. Leasing activity was on average 9 per cent ahead of Dec 23
ERV, resulting in an overall increase in portfolio ERV by 7.7 per cent
(like-for-like) to £250.6 million (Dec 2023: £236.9 million). The equivalent
yield was 4.45 per cent, reflecting a marginal outward movement of 13 basis
points like-for-like, whilst the portfolio net initial yield is 3.6 per cent.
Including rent from leases currently in rent free periods, the topped-up
initial yield of the portfolio at 31 December 2024 was 3.9 per cent (Dec 2023:
3.8 per cent). The equivalent yield for the commercial portfolio (excluding
residential) is 4.6 per cent (Dec 2023: 4.6 per cent). The net initial yield
for the commercial portfolio (excluding residential) is 3.8 per cent.
Prime West End property yields have stabilised supported by occupational and
investment transactional evidence. The investment market continues to be more
active for smaller lot sizes in the West End, with transactions demonstrating
demand for high quality, prime central London real estate. This market,
which is characterised by high occupancy, low capital requirements and
reliable growing long-term cash flows, continues to attract significant
interest from both international and domestic investors.
Overall portfolio ERV is 3 per cent ahead of 2019 levels on a like-for-like
basis. Retail ERVs improved by 11.2 per cent over the year and are now 6 per
cent below pre-pandemic levels, whilst food & beverage, office and
residential ERVs are ahead of pre-pandemic levels in nominal terms.
Covent Garden generated ERV growth of 9.1 per cent driven by leasing and asset
management activity across the retail and food & beverage space, with 33
new brands introduced to the district during the year. 76 new commercial
leases and renewals were agreed during the year, 7.3 per cent ahead of ERV.
Across Carnaby | Soho, ERV growth was 7.1 per cent during the year, as a
result of 83 new commercial leases and renewals agreed 12.7 per cent ahead of
ERV, primarily driven by office and food & beverage lettings and asset
management activity. During the year, 15 new commercial leases and renewals
were agreed in Chinatown, 22.5 per cent ahead of ERV. ERV growth in Chinatown
was 4.1 per cent over the year, driven by food & beverage letting
activity.
Total property return for the year was 7.6 per cent compared with the MSCI
Total Return Index which recorded 7.0 per cent.
Portfolio by use as at 31 December 2024 Retail Food & Offices Commercial Residential Wholly-owned
beverage portfolio
Valuation (£m)(1) 1,784.2 1,664.8 877.9 4,326.9 644.7 4,971.6
Valuation (%) 36% 33% 18% 87% 13% 100%
L-f-L valuation movement (FY 2024) +7.5% +4.7% +3.1% +5.5% -1.6% +4.5%
L-f-L valuation movement (H2 2024) +6.5% +2.2% +1.2% +3.7% -1.0% +3.1%
Annualised gross income (£m) 73.2 73.0 33.6 179.8 23.0 202.8
Annualised gross income (%) 36% 36% 17% 89% 11% 100%
L-f-L annualised gross income growth (FY 2024) +9.1% +4.2% +18.3% +8.6% +3.9% +8.0%
L-f-L annualised gross income growth (H2 2024) +5.3% - +12.0% +4.2% +2.9% +4.1%
ERV (£m) 90.2 85.0 50.5 225.7 24.9 250.6
ERV (%) 36% 34% 20% 90% 10% 100%
L-f-L ERV movement (FY 2024) +11.2% +7.2% +6.1% +8.4% +1.4% +7.7%
L-f-L ERV movement (H2 2024) +8.8% +3.4% +1.5% +5.0% +1.6% +4.7%
ERV psf (£) 126 91 79 98 60 92
Net initial yield 3.8% 4.0% 3.3% 3.8% 2.9% 3.6%
Topped up net initial yield 4.0% 4.3% 3.8% 4.1% N/A 3.9%
Equivalent yield 4.5% 4.7% 4.9% 4.6% 3.1% 4.4%
WAULT 3.0 8.1 2.7 4.8 1.1 4.4
Floor Area (sq ft m)(2) 0.7 1.0 0.6 2.3 0.4 2.7
Unit Count(2) 415 394 404 1,213 656 1,869
1. Excludes £1.9 million of Group
properties primarily held in Lillie Square Holdings (a wholly-owned
subsidiary).
2. Excluding long-leasehold residential
interests.
Portfolio by location as at 31 December 2024 Covent Garden Carnaby | Soho Chinatown Fitzrovia Wholly-owned portfolio
Valuation (£m)(1) 2,652.7 1,597.1 716.3 5.5 4,971.6
Valuation (%) 53% 32% 15% - 100%
L-f-L valuation movement (FY 2024) +3.7% +6.4% +3.7% -7.1% +4.5%
L-f-L valuation movement (H2 2024) +2.8% +4.3% +2.0% -6.1% +3.1%
Annualised gross income (£m) 104.3 66.2 32.0 0.3 202.8
Annualised gross income (%) 51% 33% 16% - 100%
L-f-L annualised gross income growth (FY 2024) +7.2% +12.1% +2.8% -5.3% +8.0%
L-f-L annualised gross income growth (H2 2024) +2.7% +8.4% +0.4% -6.0% +4.1%
ERV (£m) 134.0 81.9 34.4 0.3 250.6
ERV (%) 53% 33% 14% - 100%
L-f-L ERV movement (FY 2024) +9.1% +7.1% +4.1% - +7.7%
L-f-L ERV movement (H2 2024) +5.5% +4.5% +2.0% - +4.7%
ERV psf (£) 96 92 81 58 92
Net initial yield 3.6% 3.6% 4.0% 5.0% 3.6%
Topped up net initial yield 3.8% 4.0% 4.1% 5.0% 3.9%
Equivalent yield 4.5% 4.5% 4.3% 4.4% 4.4%
WAULT 4.4 4.0 5.6 6.1 4.4
Floor Area (sq ft m)(2) 1.4 0.9 0.4 - 2.7
Unit Count(2) 853 660 350 6 1,869
1. Excludes £1.9 million of Group
properties primarily held in Lillie Square Holdings (a wholly-owned
subsidiary).
2. Excluding long-leasehold residential
interests.
Independent valuations of the wholly-owned portfolio are undertaken in
accordance with Royal Institution of Chartered Surveyors guidelines by CBRE
and Cushman & Wakefield. The valuations represent the aggregated value of
predominantly freehold properties. There is no reflection of any premium or
discount which some potential investors may ascribe to the comprehensive
ownership of a combination of some, or all, parts of the portfolio.
Our interests comprise a combination of properties which are wholly-owned and
a 50 per cent share of property held in the Lillie Square joint venture, and
Longmartin associate until October 2024. The consolidated financial
statements, prepared under IFRS, include the Group's interest in the joint
venture as one-line items in the Income Statement and Balance Sheet.
Investment in joint ventures account for an additional £65 million of
property interests (our 50 per cent share).
Well-positioned to act on investment opportunities
We aim to maximise the potential from investment opportunities in our existing
portfolio and acquisition opportunities which deliver attractive long-term
rental growth and total returns. Capital expenditure of approximately 1 per
cent of portfolio value is expected per annum. We are well-positioned with
access to significant liquidity to take advantage of market opportunities and
will rotate capital as appropriate enhancing the quality of our portfolio.
Since merger, proceeds of £246.6 million have been realised from property
sales. ERV and contracted rent of disposals were both £14.8 million. £158.4
million of property sales completed during 2024, including the Fitzrovia
portfolio. £86 million has been reinvested in targeted assets. In March 2024,
we completed the acquisition of 25-31 James Street, Covent Garden for £75.1
million (before costs). The properties had a contracted rent
of £3.9 million and comprise 21,000 square feet of lettable area,
including 12,000 square feet of retail and 9,000 square feet of residential
and office accommodation. This acquisition presents asset management and
rental growth opportunities as well as complementing our existing ownership on
James Street, a prime retail street and key gateway into the Covent Garden
Piazza. We have acquired two assets on Broadwick Street and Marshall Street
for £7.8 million (before costs). In February 2025, we completed the
acquisition of a small property on Neal Street for £6.0 million (before
costs). Alongside organic investments inherent in the portfolio, the pipeline
of asset acquisitions is encouraging, with a number of buildings currently
under review.
In addition, in October 2024 the Company completed the sale of its 50 per cent
interest in the Longmartin investment to its joint venture partner. Completion
of the merger between Capital & Counties Properties PLC and Shaftesbury
PLC triggered the right for the partner to require the Company to offer to
sell its shares in the Longmartin investment. The partner elected to acquire
the Company's shares for net cash consideration of £94 million.
Excellent leasing activity across all uses
The portfolio represents 2.7 million square feet of lettable space, comprising
1.7 million square feet of retail, food & beverage space together with 0.6
million square feet of offices and 656 residential apartments.
During the year, 473 leasing transactions were concluded with a combined
rental value of £48.7 million, comprising:
· 175 commercial lettings and renewals: £37.5 million, 10.7 per cent ahead of 31 Dec 2023 ERV and 17.8 per cent ahead of previous passing rents; and
· 298 residential lettings: £11.2 million, 4.2 per cent ahead of 31 Dec 2023 ERV and 7.1 per cent ahead of previous passing rents.
In addition, 71 commercial rent reviews with a rental value of £18.1 million
were concluded on average 8.3 per cent ahead of previous passing rents.
Leasing transactions by use concluded during the year
Use Transactions New contracted rent (£m) % above % above previous passing rent
Dec-2023 ERV
Retail 69 14.5 9.3 20.2
Food & beverage 39 8.2 14.8 19.3
Offices 67 14.8 9.8 13.2
Residential 298 11.2 4.2 7.1
Total 473 48.7 9.1 14.4
Leasing transactions by destination concluded during the year
Destination Transactions New contracted rent (£m) % above % above previous passing rent
Dec-2023 ERV
Covent Garden 219 23.5 6.4 16.3
Carnaby | Soho 163 19.7 11.4 11.2
Chinatown 87 5.3 13.2 15.8
Fitzrovia 4 0.2 7.4 4.4
Total 473 48.7 9.1 14.4
Retail (36 per cent of the portfolio by ERV)
Occupational retail demand continues to gravitate to the best locations with
the West End's vibrancy and consumer characteristics making it a highly sought
after market. Trading conditions across our portfolio are positive, with
customer sales in aggregate up 3 per cent vs 2023 with particularly strong
performance in luxury, lifestyle and accessories. Retailers are attracted by
the seven-days-a-week footfall and trading environment. Our portfolio includes
415 shops with an average ERV of £126 per square foot, up from £108 per
square foot in December 2023.
Our portfolio remains a preferred destination for market entry and retail
expansion with 47 new openings during the year. Our broad range of unit sizes
and rental tones, provide scope for customers to grow within our portfolio.
Amongst the benefits of our portfolio of scale is our ability to provide
additional space for our customers as they expand and grow.
In Covent Garden, outdoor brand Peak Performance opened its debut UK store on
Long Acre, following the upsizing of its sister brand Arc'teryx, to a flagship
on King Street. Luxury makeup and skincare concept Charlotte Tilbury upsized
significantly to a new flagship store overlooking the Market Building,
following the success of its James Street store. Nespresso will open a new
flagship on the corner of Henrietta Street in the space previously occupied by
NatWest bank. Swiss watchmaker Longines opened on James Street and English
heritage brand Aspinal has taken space in the Market Building.
Excellent progress has been made evolving the customer offer at Seven Dials as
part of our strategy to unify the Covent Garden district. There has been a
series of key additions to the neighbourhood, with 33 new brands introduced
this year, with a very encouraging pipeline. Luxury activewear brand, Alo Yoga
has been introduced at the entrance of Neal Street which is a key gateway into
Seven Dials from Covent Garden. Swedish footwear brand, Axel Arigato has
opened its store overlooking the dial itself, marking its second Shaftesbury
Capital location. Further to redevelopment of a combination of sites,
Vivobarefoot has doubled the size of its store, relocating on Neal Street, and
outdoor retailer, Finisterre has upsized from its store on Earlham Street.
Sustainable menswear brand NN.07, boutique retailer Saint + Sofia and apparel
concept Gandy's International have all recently opened.
There has been good progress on evolving the offer on and around Carnaby
Street through our targeted leasing activity, with 13 retail signings over the
year. Global lifestyle brand PANGAIA, has opened on the southern end of
Carnaby Street marking its first European standalone store offering apparel
from innovative tech and bio-engineered materials. Brazilian fashion brand
Farm Rio and top-rated Korean beauty store Pure Seoul will open shortly
strengthening the customer line up on Carnaby Street. Foubert's Place welcomed
a new flagship store from contemporary jeweller Astrid & Miyu, eyewear
brand, Jimmy Fairly and Mango Teen. There have been a number of introductions
across Soho including outdoor sportswear brand Salomon opening on Broadwick
Street. Apparel brand Carhartt WIP opened a new flagship on Brewer Street.
Soho has also welcomed fashion retailer, Ronning, and craft jean maker
Blackhorse Lane Ateliers, both on Berwick Street.
Reflecting strong demand during the year, we completed 69 retail lettings and
renewals with a rental value of £14.5 million. Rents, on average, were 9.3
per cent above December 2023 ERV and 20.2 per cent ahead of previous passing
rents.
· H1 2024: 40 lettings and renewals: £9.3 million, 5.4 per cent ahead of 31 Dec 2023 ERV; and 17.7 per cent ahead of previous passing rents
· H2 2024: 29 lettings and renewals: £5.2 million, 11.1 per cent ahead of 30 June 24 ERV; and 26.7 per cent ahead of previous passing rents
24 retail rent reviews with rental value of £5.1 million were concluded, 14
per cent ahead of previous passing rents.
Food & beverage (34 per cent of the portfolio by ERV)
It has been an active year for food and beverage leasing with 39 leasing
transactions completed, 14.8 per cent ahead of December 2023 ERV. In 2024, our
West End portfolio welcomed 24 new offerings, ranging from independent to
international operators. These operators provide a variety of cuisines and
price points, bringing something different to the evolving dining mix, across
our popular dining destinations.
The food & beverage portfolio extends to 394 units. As is typical, there
have been a small number of failures during the year, however ongoing leasing
demand has resulted in the available space being filled quickly. Availability
of restaurant and leisure space is very limited given the vibrancy of these
locations together with constrained planning and licensing policies.
There is particularly positive performance from our Soho food & beverage
portfolio. Kingly Court continues to attract interest from multiple food &
beverage operators. The team behind renowned Soho concept, Blanchette, have
launched Goldies, their latest concept in Kingly Court. Mediterranean concept
Alta has signed following the redevelopment of units across two floors,
creating a larger destination dining opportunity. Kingly Street has bolstered
its evening offer, with the openings of The Counter and The Little Violet Door
joining food & beverage concept Two Floors which has expanded its presence
following refurbishment.
Cheesecake specialist La Maritxu signed on Kingly Street, while the opening of
Donutelier has been introduced on Carnaby Street at the gateway to Kingly
Court.
10 new concepts have been introduced to Covent Garden including Eastern
Mediterranean concept Delamina opened on Tavistock Street while Greek boutique
hotel, ERGON House is set to open in a newly refurbished heritage building,
anchoring King Street over the coming months. Luxury French pâtisserie brand,
Ladurée has expanded its tearoom in its flagship store in the Market
Building. EL&N Deli & Bakery, from café and lifestyle brand EL&N,
has also opened in the Market Building, while Aguamiel, London's first
"churreria", offering traditional Mexican dessert opened on Wellington Street.
Chinatown is a highly sought-after location in the heart of the West End's
entertainment district. Last month, Chinatown London was at the centre of the
Chinese New Year festivities for the Year of the Snake, the largest
celebration in the world outside of China, welcoming thousands of visitors
over the 15-day celebration period. Interest in Chinatown, especially from new
international entrants is healthy and demand from existing customers is
active. Signings include Pan-Asian restaurant concept, SanHao offering
hand-pulled noodles and soups. Suzhou Noodle and Noodle & Beer will open
new restaurants in the coming months.
39 food & beverage leasing transactions completed with a rental value of
£8.2 million, 14.8 per cent ahead of December 2023 ERV. 45 rent reviews
totalled £11.6 million, 6.5 per cent above previous passing rents.
· H1 2024: 20 lettings and renewals: £4.0 million, 8.6 per cent ahead of 31 Dec 2023 ERV; and 20.2 per cent ahead of previous passing rents
· H2 2024: 19 lettings and renewals: £4.2 million, 21.1 per cent ahead of 30 June 24 ERV; and 18.0 per cent ahead of previous passing rents
Office (20 per cent of the portfolio by ERV)
Leasing momentum for our prime West End space continues, with occupiers
attracted to high quality, well-fitted product, supported by good building and
estate amenity. When refurbishing our buildings we aim to meet the evolving
requirements of occupiers across a broad variety of sectors, from
best-in-class HQ offices at the larger end, to flexible shorter-term, fitted
space at the smaller end. With the wide range of office suites on offer, we
cater to a broad range of customer needs and provide opportunity for
expansion.
Our office portfolio benefits from unrivalled public transport connections, a
short walk to a number of West End tube stations including Covent Garden,
Charing Cross, Oxford Circus and Tottenham Court Road. Occupiers wish to be
surrounded by the buzz of London together with important leisure, retail, and
dining amenities adding to employee wellbeing.
There is leasing demand for our prime West End space with increasing levels of
customers relocating from other central London locations, as office occupiers
recognise the importance of a vibrant atmosphere in attracting and retaining
staff. Carnaby and Covent Garden are capturing this demand, with recent
lettings to occupiers from the financial and real estate sectors, with
occupiers attracted to the space with high amenity value and excellent
environmental credentials.
Rents in excess of £100 per square foot are firmly established across our
prime portfolio. This includes 68-72 Broadwick Street and The Floral which
have an average floor plate of 10,000 square feet. The Floral, is BREEAM
Excellent and is highly energy efficient. It is fully pre-leased in CAT A
condition, ahead of completion to two occupiers in the financial sector. Other
recent signings include CAT A refurbishments at 22 Ganton Street and The Hide,
at rents in excess of £100 per square foot.
During the year, 67 office leasing transactions with a rental value of £14.8
million were concluded 9.8 per cent ahead of December 2023 ERV and 13.2 per
cent ahead of previous passing rents. Rent reviews with rental value of £1.4
million completed, 4.0 per cent ahead of previous passing rents.
· H1 2024: 39 lettings and renewals: £10.5 million, 10.3 cent ahead of 31 Dec 2023 ERV; and 17.6 per cent ahead of previous passing rents
· H2 2024: 28 lettings and renewals: £4.3 million, 5.6 per cent ahead of 30 June 24 ERV; and 8.6 per cent ahead of previous passing rents
Residential (10 per cent of the portfolio by ERV)
The residential portfolio is performing well, with continued leasing activity
and high renewal rates across the portfolio of 656 residential apartments. Our
proposition of characterful period buildings with modern specification located
in vibrant, well-managed areas attracts interest from a broad range of
customers. During 2024, there has been competitive demand, minimal voids and
short leasing windows observed.
During the year 298 residential lettings and renewals with a rental value of
£11.2 million completed, 7.1 per cent ahead of previous passing rents. At 31
December 2024 13 units were available to let.
· H1 2024: 118 lettings and renewals: £4.3 million, 3.9 per cent ahead of 31 Dec 2023 ERV; and 7.3 per cent ahead of previous passing rents
· H2 2024: 180 lettings and renewals: £6.9 million, 5.4 per cent ahead of 30 June 24 ERV; and 6.9 per cent ahead of previous passing rents
Creating consumer experiences across our West End Portfolio
We enliven and enhance our vibrant, predominantly pedestrianised, thriving
destinations through a thoughtful programme of events, campaigns and engaging
consumer experiences throughout the year enhancing footfall, conversion and
spend which, through close collaboration with our customers, in turn supports
our rental growth prospects.
We continue to see significant growth across our digital platforms including
social media. During the year, our level of engagement and number of followers
increased by 9 per cent in aggregate across all destinations. We now have
direct engagement with over 1.3 million consumers across our channels with
portfolio-wide digital collaborations.
Important marketing initiatives across the portfolio include:
· Launch of a new lighting scheme for Covent Garden's Market Building, created in partnership with Paul Smith
· Pride celebrations across the portfolio including a month-long lighting installation in the Market Building
· American Express spend incentive campaigns across Covent Garden and Carnaby | Soho, contributing to spend, brand loyalty and data insights
· A Summer of Sport was celebrated across the portfolio including Formula 1 and E installations and screenings of Wimbledon and the Olympics on the Piazza
· Public art installation in Covent Garden's Market Building by global artists Friends with You and a series of music performances across Carnaby Street and Soho
· A shopping event in partnership with Sheerluxe across Covent Garden and Seven Dials celebrating new openings across the district
· The launch of new brands for Carnaby Street and Soho as well as a dynamic new website for the district
· An immersive Christmas programme across Covent Garden including a new lighting scheme for Seven Dials, charitable campaign with Save the Children, and activations across the Piazza for the Christmas festive period including Jo Malone London, Gisou and Sipsmith
· A new Christmas light installation 'Into The Light' was launched at Carnaby Street together with an extensive Christmas campaign including weekly festive shopping nights and a charity partnership with Global's Make Some Noise
· Chinese New Year with celebrations and campaigns across Chinatown and Covent Garden
Annualised gross income and ERV
At 31 December 2024, annualised gross income had increased by 8.0 per cent
(like-for-like) to £202.8 million. ERV was £250.6 million, up 7.7 per cent
over the year (like-for-like).
Our creative approach enables the business to deliver rental growth through
converting the portfolio's reversionary potential into contracted income and
cash flow, whilst establishing new rental tones, the benefit of which is often
compounded across nearby buildings.
As at 31 December 2024, the portfolio's reversion was £47.8 million, with the
opportunity to grow annualised gross income by 24 per cent before taking into
account any further ERV growth. The components of this reversion are set out
below.
Components of the reversion
2024 2023
£m £m
Annualised gross income 202.8 192.8
Contracted 14.9 17.3
Under offer 3.0 6.2
Available-to-let 6.3 4.7
Under refurbishment 13.5 13.9
Net under-rented 10.1 2.0
ERV 250.6 236.9
High occupancy
At 31 December 2024, EPRA vacancy (including units under offer) was 3.9 per
cent of portfolio ERV (2023: 4.9 per cent); 1.3 per cent was under offer and
2.6 per cent was available-to-let.
Under offer
Use % of portfolio ERV ERV (£m) Area
('000 sq. ft.)
Retail 0.2 0.3 6
Food & beverage 0.6 1.5 16
Offices 0.2 0.5 5
Residential 0.3 0.7 12
Total(1) 1.3 3.0 39
1. Includes 12 units let on a temporary
basis with an ERV of £1.5 million (Dec 2023: £0.7 million).
Available-to-let space
Use % of portfolio ERV ERV (£m) Area
('000 sq. ft.)
Retail 0.3 0.8 8
Food & beverage 0.6 1.5 37
Offices 1.4 3.3 39
Residential 0.3 0.7 13
Total 2.6 6.3 97
Refurbishment activity
Active asset management and refurbishment initiatives continue to unlock
income and value as well as enhance environmental performance. The ERV of
space under refurbishment amounts to £13.5 million across 161,000 square
feet, representing 5.4 per cent of portfolio ERV (2023: 5.9 per cent) which
will be delivered over the next 12-18 months. 47 per cent is already pre let
representing £6.4 million rental income. Normalised refurbishment activity is
expected to represent approximately 5 per cent of the portfolio by ERV.
During the year, £43.1 million of capital expenditure has been incurred, and
capital commitments amounted to £24.1 million as at 31 December 2024. This is
in line with our guidance of approximately 1 per cent of portfolio value
expected to be invested per annum in refurbishment, asset management and
repositioning opportunities, including actions to improve energy
performance.
Under refurbishment
Use % of portfolio ERV ERV (£m) Area
('000 sq. ft.)
Retail 1.2 3.1 25
Food & beverage 1.4 3.5 44
Offices 2.5 6.1 77
Residential 0.3 0.8 15
Total 5.4 13.5 161
Joint Venture
Shaftesbury Capital owns 50 per cent of the Lillie Square joint venture, a
residential estate and consented land located in West London. All figures
represent our 50 per cent share. The property valuation as at 31 December 2024
was £65.3 million, in line with the 31 December 2023 valuation of £65.2
million. In addition, Shaftesbury Capital owns £1.9 million of other related
assets adjacent to the Lillie Square estate.
In total, 355 Phase 1 and 2 residential apartments have been sold. Over 60
apartments have been leased on a short-term basis generating annual contracted
rental income of £3.8 million. The joint venture is in a cash position of
£9.7 million (£4.9 million Shaftesbury Capital share). During the year £4.0
million was distributed to each partner.
Commitment to sustainability and environmental stewardship
We are committed to reducing the impact of our operations on the environment,
whilst engaging and collaborating with our wide range of stakeholders. We
continue to future proof our West End heritage buildings recognising our
buildings represent substantial long-term carbon stores. We reduce future
operational carbon by improving energy efficiency and minimising embodied
carbon emissions through the retention and re-use of structure, façade and
materials.
We have reset our comprehensive Net Zero Carbon target to 2040 to align with
our Science Based Targets initiative ("SBTi") validated long-term carbon
reduction targets. Our rolling programme of energy efficient refurbishments
delivers incremental energy performance benefits. 88 per cent of properties
are EPC grade A to C by ERV, representing an 8 percentage points increase from
the prior year. Furthermore, 70 per cent of commercial EPCs are A or B, which
is up 14 percentage points in the year. We continue to focus on low-carbon
refurbishment, at modest financial outlay which improves energy efficiency,
and aim for a minimum rating of B on all new commercial refurbishment
projects.
Detailed aligned energy efficiency analysis has been completed on a selection
of our assets, representative of the portfolio. Findings have then been used
to assess performance against Carbon Risk Real Estate Monitor ("CRREM")
decarbonisation trajectories and identify actions that will be required to
reduce carbon emissions including electrification of our buildings. We have
continued to improve the coverage and accuracy of our sustainability data,
with 67 per cent of landlord supplies on smart meters, an increase from 19 per
cent at the end 2023.
We participate in a range of external benchmarks and indices to provide
independent verification of our sustainability progress and help identify
opportunities. During the year, we published our first EPRA Sustainability
Data Report including our first year of combined data as Shaftesbury Capital
and achieved a gold award for our reporting. Recognised indices ratings
include CDP of B for our climate disclosure, MSCI of BBB and GRESB of 66.
Active community engagement
As an active member of the community, we are committed to engaging with
stakeholders across the West End. During the year, we undertook a thorough
evaluation of our community investment activity, developing our strategy to
reflect local needs and better support the vibrant communities that make our
places thrive. Our impact extends beyond our buildings, and we continue to
enhance the public realm within and around our portfolio. Through placeshaping
we help create healthy, welcoming and thriving locations. These include
pedestrianisation, streetscape improvements, providing outdoor seating and
schemes to reduce traffic congestion and pollution.
We support community-led initiatives which work with local people contributing
to a diverse range of charitable and community initiatives across Camden and
Westminster, with a specific focus on supporting educational and employment
opportunities for young people and addressing the issues of homelessness and
food hardship. Our support includes sponsorship of a student at Westminster
University through our Scholar Programme, Young Westminster Foundation's
Brighter Futures Fund, and Young Camden Foundation's Heads Up Mental Health
Fund. Celebrating International Women's Day, pop up space was provided on
Carnaby Street to Smart Works, a UK charity, focusing on getting out of work
women back into the workplace.
We have a Community Investment Forum ("CIF") comprising employees from across
the business which is responsible for overseeing our programme of community
investment. It enables us to review our community investments and consider
applications for our community grants.
We also have an established grants fund that offers local charities and groups
the opportunity to apply for funding for initiatives which align with our
community investment focus areas. Grant recipients include the London Youth
Theatre and Native Scientists which will support educational workshops at
three Camden schools, connecting pupils with scientists. We continue our
support of culture and the arts, including the patronage of the Donmar Theatre
in Seven Dials, as well as partnerships with the Society of London Theatres,
British Fashion Council and London & Partners.
FINANCIAL REVIEW
Financial highlights
2024 financial year we delivered continued strong operational and financial
performance across the Group. Activity levels across our portfolio have
remained consistently high, including in the important fourth quarter for our
retail and F&B customers, as evidenced by the vibrancy of our estates,
footfall, customer sales, leasing volumes and the strong pipeline. A number of
properties and investments were sold at or around valuation with the proceeds
being reinvested into our portfolio, property acquisitions and used for debt
repayment. During the year, there has been growth in rental income, earnings,
dividends, property valuations and net tangible assets per share.
Underlying earnings for the year were £73.0 million, equivalent to 4.0 pence
per share, driven primarily by higher net rental income on a like-for-like
basis. The Directors have proposed a final dividend of 1.8 pence per share,
which when combined with the interim dividend of 1.7 pence results in a total
dividend per share in respect of the year of 3.5 pence per share.
The wholly-owned portfolio has been independently valued at £4,973.5 million,
reflecting 4.5 per cent like-for-like growth. ERV increased by 7.7 per cent
(like-for-like) to £250.6 million and annualised gross income was up 8.0 per
cent like-for-like to £202.8 million. The equivalent yield on the portfolio
was 4.45 per cent, reflecting an outward movement of 13 basis points over the
year.
The sale of selected properties was completed in the year for total proceeds
of £158.4 million with an additional £9.8 million having exchanged and due
to complete in the first quarter of 2025. Since the merger, total asset
disposals of £246.6 million have completed at an overall premium to valuation
(before costs), representing approximately five per cent of the portfolio. In
addition, in October 2024 the Company sold its 50 per cent shareholding in the
Longmartin investment. Total proceeds of £94.5 million were received,
comprising £82.9 million for the sale of our 50 per cent equity interest and
£11.6 million in respect of repayment of the interest-bearing loan.
During the year, £83.1 million (before costs) was reinvested into asset
acquisitions across the portfolio taking acquisitions since merger to £86.0
million.
Overall EPRA NTA (net tangible assets) per share increased by 5.2 per cent
from 190.3 pence to 200.2 pence. Combined with the 3.35 pence per share
dividend paid to shareholders during the year, the total accounting return for
the year is 7.0 per cent. Total shareholder return for the year was -6.9 per
cent, reflecting dividends paid and the change in the share price from 138.1
pence to 125.5 pence per share (although the shares were trading well above
150 pence in September 2024). Total property return was 7.6 per cent,
representing 0.6 percentage points of outperformance against the MSCI total
return index.
We have made significant progress delivering cost savings across the business
as we progress towards an effective and efficient organisational structure and
cost base. Further income growth from leasing activity and operational
efficiencies are expected to be achieved in the year ahead, with the EPRA cost
ratio (which measures property-level and administration costs relative to
gross rental income) targeted to reduce towards 30 per cent over the
medium-term. The adjusted Company EPRA cost ratio is 37.3 per cent, having
been reduced significantly since the merger.
Finance costs reflect weighted average cost of net debt of 3.7 per cent based
on average net debt of £1.5 billion for the year.
The Group has a strong balance sheet. The EPRA loan to value ratio at 31
December 2024 was 27.4 per cent. There is significant headroom against debt
covenants and access to liquidity, comprising cash and undrawn facilities,
currently £559.8 million (31 December 2023: £485.7 million).
During the year we completed a range of financing activity, including:
· putting in place a new five-year £75 million unsecured loan facility;
· novation and extension of the £300 million revolving credit facility to December 2028;
· early exercise of the first 12 month extension option on the £350 million unsecured loan (£150 million of which is undrawn), taking its maturity to December 2027; and
· repayment of £95 million of private placement debt which matured in the year.
Net debt at 31 December 2024 was £1.4 billion (31 December 2023: £1.5
billion). Priorities over the forthcoming period are to review opportunities
to refinance medium-term maturities as well as consideration of longer-term
financing options to evolve our capital structure, taking advantage of the
Group's enhanced credit profile.
2024 performance reaffirms our confidence in our strategy, portfolio and
business plan. We are focused on delivering our priorities, including
sustainable long-term rental growth, growing cash rents, progressing further
towards an effective and efficient organisational structure and cost base, and
maintaining a strong capital structure.
Alternative performance measures
As is usual practice in the real estate sector, alternative performance
measures ("APMs") are presented for certain indicators, including earnings,
earnings per share and EPRA net tangible assets, making adjustments set out by
EPRA in its Best Practice Recommendations. These recommendations are designed
to make the financial statements of public real estate companies more
comparable across Europe, enhancing the transparency, comparability and
coherence of the sector.
One of the key performance measures which the Group uses is underlying
earnings. The underlying earnings measure reflects the underlying financial
performance of the Group's West End property rental business and is a relevant
metric in determining dividends. The measure aligns with the main principles
of EPRA earnings. EPRA earnings excludes valuation movements on the
wholly-owned, joint venture and associate properties, profit or loss on
disposal of investment properties and investment in associates, fair value
changes of financial instruments and listed investments, cost of early close
out of debt, gain on bargain purchase, IFRS 3 merger-related transaction costs
and, following updated guidance issued by EPRA in 2024, adjustments in
relation to any other non-operating and exceptional items. These include:
· The fair value movement of the option component of the exchangeable bond as such movements do not reflect the underlying performance of the Group.
· £3.3 million (31 December 2023: £8.7 million) of merger-related integration and other non-underlying costs have been incurred, which do not relate to the ongoing operations of the Group.
· Following the completion of the all-share merger in March 2023, a fair value exercise was performed on the Shaftesbury PLC balance sheet as at 6 March 2023, resulting in the fair value of the debt determined to be £945.6 million compared to the nominal value of £1,019.8 million (including an adjustment to the investment in Longmartin arising from the fair value adjustment of the underlying debt in the associate). The outstanding balance of the fair value adjustment will be amortised to other finance costs over the remaining term of the debt facilities. In the prior year, EPRA earnings were adjusted by £24.6 million, to reflect the accelerated unwind of the fair value adjustment following the early redemption of the Chinatown and Carnaby bonds in April 2023. The current year amortisation of the fair value adjustment for the other debt facilities of £6.1 million (2023: £5.2 million) has been adjusted from EPRA earnings. On the sale of our 50 per cent share of Longmartin, the £1.4 million fair value balance remaining has been recognised in the loss on sale of associate.
In calculating underlying earnings, additional adjustments are made to EPRA
earnings to exclude the financial performance of the Lillie Square joint
venture, associated tax adjustments and the interest receivable on the loan
issued to the joint venture by the Group. Lillie Square is not considered to
be a core part of the operations of the Group and therefore its results are
not included in underlying earnings.
Further details on APMs used and how they reconcile to IFRS are set out in APM
section.
Presentation of information
The all-share merger of Capital & Counties Properties PLC ("Capco") and
Shaftesbury PLC to create Shaftesbury Capital PLC ("Shaftesbury Capital")
completed on 6 March 2023. The financial review sets out the results of
Shaftesbury Capital with the statement of comprehensive income for the prior
period reflecting the standalone performance of Capco for the period from 1
January to 6 March and the performance of the merged business, Shaftesbury
Capital, between the completion date of 6 March and 31 December 2023.
Reflecting the Company's focus primarily on the wholly-owned portfolio, all
information is presented on an IFRS basis.
FINANCIAL PERFORMANCE
SUMMARY STATEMENT OF COMPREHENSIVE INCOME
The 2023 summary statement of comprehensive income represents the standalone
performance of Capco for the period to 6 March 2023 and that of Shaftesbury
Capital from that date to 31 December 2023.
2024 2023
£m £m
Gross profit 167.1 141.9
Gain/(loss) on revaluation and sale of investment property 194.6 (65.0)
Change in fair value of listed equity investment - 52.0
Other income - 2.7
Administration expenses(1) (42.7) (83.8)
Net finance costs(2) (57.2) (51.9)
Profit from joint ventures and associates 4.5 0.2
Loss on sale of associates (4.0) -
Taxation (0.3) (0.2)
Other(3) (9.9) (51.0)
252.1 (55.1)
Gain on bargain purchase - 805.5
Profit for the year 252.1 750.4
Basic earnings per share 13.8p 45.5p
EPRA earnings(4) 75.3 67.9
EPRA earnings per share(4) 4.1p 4.1p
Underlying earnings(4) 73.0 60.4
Underlying earnings per share(4) 4.0p 3.7p
Weighted average number of shares(5) 1,821.7m 1,648.9m
1. Administration expenses include £3.3
million of non-underlying costs (2023: £44.5 million), substantially related
to merger-related transaction and integration costs, which are considered
non-recurring in nature.
2. Excludes other finance income and
costs and change in fair value of derivative financial instruments (included
in 'Other' above).
3. Includes impairment of other
receivables, other finance income and costs including the change in fair value
of derivatives and amortisation of the fair value adjustment relating to the
Shaftesbury debt.
4. Further details regarding EPRA and
Underlying earnings are disclosed in note 3 'Performance measures'. The 2023
comparative for EPRA earnings and EPRA earnings per share has been restated
from £45.0 million, 2.7 pence per share, to £67.9 million, 4.1 pence per
share, following the changes to the EPRA earnings definition during 2024.
5. In total, 1,953.2 million shares were
in issue as at 31 December 2023 and 2024. The weighted average number of
shares of 1,821.7 million shares excludes 128.4 million own shares, of which
127.0 million are held as collateral for the exchangeable bond and 3.1 million
shares held by the Group's approved Employee Benefit Trust (both of which form
part of the overall number of shares in issue of 1,953.2 million).
Gross profit
2024 2023
£m £m
Rent receivable 197.2 171.9
Straight lining of tenant lease incentives(1) 7.8 3.9
Service charge income 22.1 19.3
Revenue 227.1 195.1
( )
Expected credit loss provision (3.9) (2.0)
Property expenses(1) (33.1) (31.1)
Service charge expenses (22.1) (19.3)
Tenant lease incentives loss allowance (0.9) (0.8)
Gross profit 167.1 141.9
1. 2023 includes £5.1 million charge
relating to the change in accounting policy to reflect the adjustment to
amortisation period for tenant lease incentives and deferred letting fees.
£4.1 million of the adjustment was recognised through the straight lining of
tenant lease incentives and £1.0 million in property expenses.
Rent receivable has increased by 5.7 per cent like-for-like compared with the
pro forma 12 month period for 2023 reflecting the positive letting activity
across the portfolio. Rental income receivable has been reduced in the year
by £2.9 million reflecting the impact of disposals in 2023 and 2024, offset
by a £2.7 million contribution from acquisitions. Cash collections have
continued to be strong with 98 per cent collected in the year. However the
expected credit loss provision has increased during the year to £3.9 million
due to a limited number of customer administration or anticipated failures in
early 2025.
The gross to net profit margin, excluding service charge income and expense,
is 81.6 per cent having increased from 80.7 per cent in 2023. The improvement
reflects the growth in income as well as cost savings delivered in the year.
Further enhancements are expected in the medium-term.
Gain/(loss) on revaluation and sale of investment property
The market valuation of the wholly-owned portfolio has increased by 4.5 per
cent like-for-like since December 2023 to £4,973.5 million. ERV increased by
7.7 per cent (like-for-like) to £250.6 million and the equivalent yield was
4.45 per cent, reflecting an outward movement of 13 basis points. This
represents an equivalent yield of 4.6 per cent on the commercial portfolio,
excluding residential properties.
The gain on revaluation of £202.9 million, is based on the carrying value of
the property portfolio after adjustments for lease incentives and capital
expenditure.
Several properties, including the majority of the Fitzrovia portfolio, have
been disposed of during the year for gross proceeds of £158.4 million. Based
on the opening book value and sale costs, a loss of £8.3 million has been
recognised during the year, although on an overall basis since the merger, a
premium has been achieved (before costs).
Administration expenses
2024 2023
£m £m
Depreciation 0.3 0.4
Other administration expenses 39.1 38.9
Underlying administration expenses 39.4 39.3
( )
Merger-related transaction costs - 35.8
Merger-related integration and non-underlying administration expenses 3.3 8.7
Administration expenses 42.7 83.8
Underlying administration expenses of £39.4 million have been incurred during
the year.
As part of delivering cost efficiencies, one-off integration and other costs
of £3.3 million have been incurred in the year. The administrative cost base
has been reduced significantly since the merger, primarily as a result of
efficiencies, removal of areas of duplication and overlap, and headcount
reduction.
Similarly the EPRA cost ratio has been reduced significantly from its pro
forma level of over 50 per cent at the time of the merger. However over the
medium-term the Group is targeting further improvements towards 30 per cent
from its current level of 37.3 per cent, driven by growth in rental income and
rigorous management of irrecoverable property costs and administration
expenses.
Net finance costs
Finance costs of £72.0 million have been incurred in the year with the
average drawn debt balance being £1.6 billion, reducing to £1.5 billion at
31 December 2024.
Finance income of £14.8 million in the year comprises £9.8 million in
relation to interest rate hedging arrangements and £5.0 million interest on
cash held on deposit. Protection is currently in place in relation to the
interest rate exposure on the Group's expected drawn variable rate debt until
the end of 2025 through caps and collars. It is expected that further interest
rate hedging arrangements will be put into place in due course in relation to
variable rate exposure for future years.
Profit from joint ventures and associates
Our share of Longmartin's post-tax profit was £4.5 million for the period up
to sale of our 50 per cent interest. Our share of the revaluation gain was
£3.9 million, offset by a deferred tax movement of £1.2 million. Excluding
the revaluation and fair value adjustment on debt of £0.6 million, and
including the £0.4 million interest received on the interest-bearing loan
provided to the associate, our share of underlying earnings from Longmartin
was £2.8 million. £1.2 million of dividends were received during the period
prior to sale.
Loss on sale of associates
Pursuant to the terms of the Longmartin investment (previously forming three
per cent of the Group's property portfolio), the merger triggered the right
for the partner to require the Company to offer to sell its shares in the
Longmartin investment to them (or to a third-party purchaser identified by
them). The partner elected to acquire the Company's shares in the Longmartin
investment with the sale completing in October 2024. Total proceeds of £94.5
million were received with £11.6 million repayment of the interest-bearing
loan provided to the associate and £82.9 million for the sale of our 50 per
cent share. Based on the investment value as at 24 October 2024, and including
disposal costs, a loss of £4.0 million has been recorded.
Taxation
The Group continues to satisfy the requirements to qualify for REIT status. As
the Group's income is derived substantially from qualifying property rental
business activities within the REIT regime, the majority of its income is
exempt from tax. There is a tax charge of £0.3 million in the year (2023:
£0.2 million), arising mainly in respect of finance income.
Dividends
The Board has proposed a final dividend of 1.8 pence per share, bringing the
total dividend to 3.5 pence per share reflecting progression in underlying
earnings and cash generation. The total gross dividend payable is £35.1
million of which £2.3 million relates to the Group entity which holds 128.4
million shares in relation to the exchangeable bonds. The entity has provided
an undertaking not to exercise its voting rights in respect of such ordinary
shares but will receive the proposed dividend, the majority of which should
subsequently be retained by the Group following the dividend threshold test as
set out in the exchangeable bond conditions. In addition, the dividend will
not be paid in relation to the 3.1 million shares held by the Group's approved
Employee Benefit Trust.
The dividend is to be paid wholly as a PID on 30 May 2025 to shareholders on
the register at 25 April 2025.
SUMMARY BALANCE SHEET
31 December 31 December
2024 2023
£m £m
Property portfolio(1) 4,929.0 4,760.4
Investments in joint ventures and associates - 83.4
Net debt(2) (1,405.0) (1,499.1)
Other assets and liabilities 150.3 135.5
Net assets 3,674.3 3,480.2
EPRA net tangible assets 3,671.1 3,479.4
EPRA net tangible assets per share (pence) 200.2p 190.3p
Adjusted, diluted number of shares(3) 1,833.3m 1,828.8m
1. Includes £20.1 million (2023: £20.2 million) accounted for as
owner-occupied property and £9.8 million (2023: £nil) accounted for as held
for sale. The market value of the property portfolio is £4,973.5 million
(2023: £4,795.3 million).
2. Net debt based on nominal value of debt drawn less cash, excluding tenant
deposits of £14.2 million (2023: £14.5 million).
3. Number of shares excludes 128.4 million shares held in relation to the
exchangeable bond and 3.1 million within an approved Employee Benefit Trust.
Total shares in issuance, including these components, was 1,953.2 million
shares.
EPRA NTA
EPRA NTA per share increased by 5.2 per cent to 200.2 pence, due primarily to
the like-for-like increase in the valuation of the property portfolio.
Following the completion of the merger in 2023, the Shaftesbury debt which had
an overall nominal value of £384.8 million (2023: £444.8 million - included
the debt in relation to our share of the Longmartin investment), was fair
valued and was held at £348.5 million as at 31 December 2024 (2023: £400.4
million). This difference of £36.3 million (2023: £44.4 million), or 2.0
pence (2023: 2.4 pence) in terms of EPRA NTA per share, will reverse as the
balance sheet value of the debt accretes to nominal value over the remaining
term of the debt. The impact of this unwind is excluded from underlying
earnings.
Property portfolio
The carrying value of the wholly-owned portfolio as at 31 December 2024 is
£4,929.0 million, including £20.1 million and £9.8 million classified as
owner-occupied and held for sale respectively. During the year, a number of
properties have been sold with an opening carrying value of £163.8 million
for gross proceeds of £158.4 million.
£83.1 million, before transaction costs, has been reinvested into asset
acquisitions. In March 2024, we completed the acquisition of 25-31 James
Street, Covent Garden for £75.1 million. In addition, we have acquired two
properties on Broadwick Street and Marshall Street for £8.0 million.
Subsequent capital expenditure during the year on the wholly-owned portfolio
was £43.1 million predominantly for office refurbishment activity in Covent
Garden.
The market valuation of the wholly-owned property portfolio of £4,973.5
million was 4.5 per cent higher on a like-for-like basis compared with 31
December 2023. ERV increased by 7.7 per cent (like-for-like) to £250.6
million and the equivalent yield was 4.45 per cent, reflecting an outward
movement of 13 basis points, two-thirds of which was in the first half.
Total property return for the year was 7.6 per cent. The MSCI Total Return
Index recorded performance of 7.0 per cent for the year, resulting in
outperformance of 0.6 percentage points.
Investment in joint ventures and associates
Following the sale of our 50 per cent investment in the Longmartin associate
in October 2024, the remaining investment held at 31 December 2024 is our 50
per cent joint venture interest in Lillie Square.
The property valuation as at 31 December 2024 was £65.3 million, in line with
the 31 December 2023 valuation of £65.2 million. The majority (65 per cent)
of this value relates to completed apartments in phases 1 and 2 of the
project, with the balance representing investment properties and consented
land. Over 60 apartments have been leased on a short-term basis generating
annual contracted rental income of £3.8 million. Our share of net cash in the
joint venture was £4.9 million and there is no external debt. During the year
a repayment of £4.0 million of the interest-bearing loan provided to Lillie
Square was received.
Debt and gearing
The Group maintains a strong financial position, with diversified sources of
funding, a spread of debt maturities, significant headroom against debt
covenants, access to liquidity, modest capital commitments, substantial
unencumbered asset value and interest rate hedging in place for 2025.
The Group's cash and undrawn committed facilities as at 31 December 2024 were
£559.8 million (2023: £485.7 million). As at 31 December 2024, the Group had
capital commitments of £24.1 million.
31 December 31 December 2023
2024 £m
£m
Cash and cash equivalents(1) 109.8 185.7
Undrawn committed facilities 450.0 300.0
Cash and undrawn committed facilities 559.8 485.7
Commitments (24.1) (24.8)
Available resources 535.7 460.9
1. Excludes tenant deposits of £14.2
million (2023: £14.5 million).
The loan-to-value ("LTV") ratio at 31 December 2024 was 28.2 per cent and EPRA
LTV was 27.4 per cent. This is comfortably within the Group's limit of no more
than 40 per cent. Net debt to EBITDA has reduced from 13.9 to 10.9 times.
31 December 2024 31 December 2023
£m £m
Cash and cash equivalents 109.8 185.7
Debt at nominal value (1,514.8) (1,684.8)
Net debt (1,405.0) (1,499.1)
Loan-to-value 28.2% 31.3%
EPRA loan-to-value 27.4% 30.9%
Net debt to EBITDA 10.9x 13.9x
Interest cover 292.1% 288.4%
Interest cover excluding non-underlying admin costs 223.3% 212.7%
Weighted average debt maturity - drawn facilities 4.6 years 5.0 years
Weighted average cost of debt - gross(1) 4.0% 4.2%
Weighted average cost of debt - net 3.7% 3.4%
Drawn debt with interest rate protection(2) 100% 100%
1. As at 31 December 2024 the weighted
average cost of debt reduces to an effective running cash cost of 3.7 per cent
(2023: 3.4 per cent) taking account of interest on cash deposits and interest
rate caps and collars.
2. Taking account of interest on cash
deposits and interest rate caps and collars.
At 31 December 2024, Group net debt was £1.4 billion. During the year a new
£75 million unsecured loan facility was entered into as well as refinancing
the £300 million revolving credit facility, extending the debt maturity to
2028. In addition, the first 12 month extension option on the £350 million
unsecured loan (£150 million of which is undrawn) has been exercised early,
taking its maturity to December 2027. £95 million of private placement debt
matured during the year.
The current weighted average cash cost of drawn debt is 4.0 per cent (2023:
4.2 per cent) which reduces to an effective cash cost of 3.7 per cent (2023:
3.4 per cent) taking into account interest income on cash deposits and the
benefit of interest rate hedging. As maturing debt is repaid or refinanced,
it is currently anticipated that the weighted average cost of debt will
increase.
All of the Group's drawn debt is at fixed rates or currently has interest rate
protection in place until the end of 2025, taking into account interest on
cash deposits. £250 million of hedging is in place until the end of 2025
which provides for a cap of 3.0 per cent and a floor of 2.0 per cent on SONIA
exposure.
Priorities over the forthcoming period are to refinance medium-term debt
maturities as well as consideration of longer-term financing options to evolve
our capital structure, taking advantage of the Group's enhanced credit
profile.
CASH FLOWS
Movement in cash flow £m
Cash, excluding tenant deposits, as at 31 December 2023 185.7
Operating inflow 52.0
Investing inflow 103.2
Financing outflow (170.0)
Dividends paid (61.1)
Cash, excluding tenant deposits, as at 31 December 2024 109.8
The overall balance of cash was reduced by £75.9 million to £109.8 million
as at 31 December 2024. This is largely due to:
· Operating cash inflows of £52.0 million reflecting growing gross profit and continuing high levels of cash collection, partly offset by administrative and finance costs. The inflow is further reduced for the payment of non-underlying merger-related integration costs and non-underlying transaction costs for property acquisitions and disposals in the year.
· Investing cash inflows of £103.2 million, including £136.6 million gross proceeds from the sale of several properties offset by £47.3 million capital expenditure and £83.1 million for the acquisition of 25-31 James Street, Broadwick Street and Marshall Street. £94.1 million was received on the sale of our interest in Longmartin as well as a £1.2 million dividend during the year. A £4.0 million loan repayment from the Lillie Square investment was also received.
· The £170.0 million financing outflow reflects the net movement in facilities drawn and repaid in the year. £3.1 million of costs have been incurred on the arrangement of new facilities in the year.
Total dividends paid in the year excludes the £4.3 million paid to the Group
entity which holds 128.4 million shares as security under the terms of the
exchangeable bonds. Following the dividend threshold test, as set out in the
exchangeable bond conditions, substantially all the dividend was subsequently
retained by the Group.
Going concern
Further information on the going concern assessment is set out in note 1
'Principal accounting policies'.
The Company has a strong balance sheet with EPRA loan-to-value of 27.4 per
cent, group interest cover of nearly three times before administrative costs,
and access to cash and undrawn facilities of £559.8 million as at 31 December
2024. There remains sufficient liquidity and debt covenant headroom even in a
downside "severe but plausible" scenario.
There continues to be a reasonable expectation that the Group will have
adequate resources to meet both ongoing and future commitments for at least 12
months from the date of signing these financial statements. Accordingly, the
Directors consider it appropriate to adopt the going concern basis of
accounting in preparing the 2024 Annual Report.
Situl Jobanputra
Chief Financial Officer
26 February 2025
PRINCIPAL RISKS AND UNCERTAINTIES
EFFECTIVE RISK MANAGEMENT
Risk management
The Board has overall responsibility for Group risk management. It determines
its risk appetite and reviews principal risks and uncertainties regularly,
together with the actions taken to mitigate them. The Board has delegated
responsibility for the review of the adequacy and effectiveness of the Group's
internal control framework to the Audit Committee.
Risk is a standing agenda item at management meetings. This gives rise to a
more risk-aware culture and consistency in decision-making across the
organisation in line with the corporate strategy and risk appetite. All
corporate decision-making takes risk into account, in a measured way, while
continuing to drive an entrepreneurial culture. The Executive Committee is
responsible for the day-to-day commercial and operational activity across the
Group and is, therefore, responsible for the management of business risk.
The Executive Risk Committee, comprising the Chief Executive, Chief Financial
Officer, members of the Executive Committee, General Counsel, Group Financial
Controller, Director of Transformation and Technology, Head of Sustainability
and Head of Health and Safety, is the executive level management forum for the
review and discussion of risks, controls and mitigation measures. The
corporate and business division risks are reviewed on a regular basis by the
Executive Risk Committee, so that trends and emerging risks can be identified
and reported to the Board.
Senior management from each part of the business identify and manage the risks
for their area or function on a day-to-day basis and maintain a risk register.
The severity of each risk is assessed through a combination of each risk's
likelihood of an adverse outcome and its impact. In assessing impact,
consideration is given to financial, reputational and regulatory factors, and
risk mitigation plans are established. A full risk review is undertaken
annually in which the risk registers are aggregated and reviewed by the
Executive Risk Committee. The Directors confirm that they have completed a
robust assessment of the principal and emerging risks faced by the business,
assisted by the work performed by the Executive Risk Committee.
Risk appetite statement
The Group risk appetite statement is designed to set the right tone at the top
for the Group and support decision-making at a strategic level by the Board
and the Executive Committee. This statement provides guiding principles to
support decision-making at both a Board and senior management level. The
Group's risk appetite statement is reviewed and updated by the Board at
appropriate intervals and, in any event, on an annual basis. The Group's risk
appetite statement has been communicated to senior management who are
responsible for incorporating the identified principles in decision-making.
The Group's risk appetite statement is as follows:
"We invest to create thriving destinations in London's West End where people
enjoy visiting, working and living. We use our expertise in property
investment and our commitment to a strong balance sheet to take commercial
risks in a measured way, so that we are able to deliver sustainable growth and
long-term returns for our shareholders.
We are risk averse in relation to the impact of our business on the
environment and on the health and safety of our people and the public, and it
is a key priority for us that our business operates in compliance with laws,
regulations and our contractual commitments."
Investing in one location presents an inherent geographic concentration risk
and there are certain external factors which the Group cannot control.
However, in executing the Group's strategy, we seek to minimise exposure to
operational, reputation and compliance risks, recognising that our appetite to
risk varies across different elements of the strategy. Recognising that risk
appetite is not an "absolute", the Group may move higher or lower on the risk
curve, as circumstances dictate.
Assessing risk
Risks are considered in terms of the likelihood of occurrence and their
potential impact on the business. In assessing impact, a number of criteria
are considered, including the effect on our strategic objectives, operational
or financial matters, our reputation, sustainability, stakeholder
relationships, health and safety and regulatory issues. Risks are assessed on
both gross (assuming no controls are in place) and residual (after mitigation)
bases.
To the extent that significant risks, failings or control weaknesses arise,
appropriate action is taken to rectify the issue and implement controls to
mitigate further occurrences. Such occurrences are reported to the Audit
Committee. The Group's processes and procedures to identify, assess, and
manage its principal risks and uncertainties were in place throughout the year
and remained in place up to the date of the approval of the 2024 Annual
Report.
Internal controls
The main elements of the Group's internal control framework are set out below:
· Clear remit, terms of reference and schedule of matters for the Board and its Committees
· Close involvement of the Executive Committee in the day-to-day operations of the business, with regular meetings with senior management
· Delegated authority limits
· Daily monitoring of risks and controls by management
· Formal assessment by the Executive Risk Committee of strategic and emerging risks and the related controls or mitigations, with reporting to the Audit Committee
· Regular Board updates on operations, IT systems and cyber security
· Transparent tax strategy, published on the Group's website, which sets out the approach to tax risk management and governance
· Whistleblowing policy and hotline procedures, where employees and third parties may raise any matters of concern confidentially, are reviewed by the Audit Committee annually
Specific controls relating to financial reporting and consolidation process
include:
· Appropriately staffed management structure, with clear lines of responsibility and accountability
· A comprehensive budgeting and review system
· Board and Audit Committee updates from the Chief Financial Officer and Group Financial Controller, which include forecasts, performance against budget and financial covenants
· Formal reviews of the effectiveness of financial, operational and compliance controls by management and external advisers are reported to the Audit Committee
· BDO LLP ("BDO"), appointed as internal auditor of the Group, conducts regular audits of the Group's control procedures and reports its findings to the Audit Committee
Risk outlook
During 2024, despite the challenging macro-economic backdrop and elevated
geopolitical risk and volatility, we continued to deliver positive operational
performance across the portfolio, reflecting the benefits of the Group's
active asset management, together with the exceptional qualities and long-term
resilience of the West End. Strong leasing demand continued across all uses,
leading to high occupancy levels and strong rent collection.
The long-term impact of the macroeconomic and geopolitical factors, in
particular evolving inflationary pressures and interest rates, on the future
demand for, and use of, lettable space, evolution of consumer behaviour and
travel patterns remain a consideration and the Board continues to monitor
this.
Many of the Group's customers are exposed to the changes and challenges facing
the retail and food & beverage sectors, including macroeconomic factors
around the UK budget, such as availability and cost of credit for customers
and their businesses, the potential for the level of consumer spending to be
impacted by cost-of-living pressures, business and consumer confidence,
inflation rates, energy costs, supply chain disruption, labour shortages and
other operational costs.
If current global or UK macroeconomic conditions deteriorate this could impact
UK real estate markets, resulting in downward pressure on the valuation of the
Group's properties and gross rental income.
The Group's operations may be adversely affected if it fails to comply with
climate and environmental regulation or its own environmental, social or
governance standards. Operations may also be adversely affected by climate and
environment related risks, which could lead to significant costs to mitigate
environmental impacts.
Emerging risks
The Group monitors emerging risks to identify and assess those risks that may
potentially impact upon its strategic plans. These risks are circumstances or
trends which are often evolving rapidly which could significantly impact on
the Group's financial strength, competitive position or reputation within the
next three years or over the longer term. Generally, the impact and
probability of occurrence are not yet fully understood and, consequently,
necessary mitigations have not yet fully evolved.
The Group conducts a horizon scanning exercise to identify potential risks and
emerging trends which may be impactful in the future. Based on this exercise,
the most relevant emerging risks and opportunities are assessed to establish
relevance and identify any additional remediation required. The prioritised
emerging risks are further reviewed and validated by senior management to gain
a better understanding of their impact and to develop strategies to address
them. A non-exhaustive list of emerging risks is outlined below.
Emerging risks with a one-to-three-year time horizon include:
· UK political uncertainty and evolving geopolitical conditions;
· UK corporate reform and landlord/tenant legislation changes;
· Building Safety Act and changes to UK property valuation methodologies and practices;
· Green energy and sustainability priorities; and
· Disruptive technological advancements, which may include areas such as artificial intelligence, blockchain and metaverse.
Emerging risks with a longer-term horizon include:
· Changes in social dynamics, demographic shifts and trends in space usage, urbanisation and consumption and travel patterns;
· Longer-term climate change impacts;
· Consumer behaviour;
· Impact of digital currencies on consumer behaviour; and
· Residential rent control and regulatory tax changes.
Principal risks and uncertainties
The Group's principal risks and uncertainties, which are set out on the
following pages, are reflective of where the Board has invested time during
the year. Following a detailed review of the principal risks post-merger,
certain risks have been disaggregated in the current year to clearly align the
mitigating actions to the respective risks. This is reflected below. These
principal risks are not exhaustive. The Group monitors a number of additional
risks and adjusts those considered 'principal' as the risk profile of the
business changes. See also the risks inherent in the compilation of financial
information, as disclosed in note 1 'Principal accounting policies' within
'Critical accounting judgements and key sources of estimation and
uncertainty'.
2024 Risk Change in the year
Economic and political Stable
Portfolio Stable
Operational resilience Stable
Leasing and asset management Stable
People Stable
Climate change Stable
Compliance with law and regulations Stable
Risk Impact on Strategy Mitigation
Economic and political
Impact of uncertain interest rate environment and lack of availability or Reduced property return Maintain appropriate liquidity to cover commitments
increased cost of debt or equity funding
Reduced rental income and/or capital values as customers could suffer staff Target longer and staggered debt maturities, and diversified sources of
Inflationary pressures on operating costs, including energy and the shortages, increased costs, longer lead times and lower availability of funding
cost-of-living inventory
Early refinancing of debt maturities
Adverse impact on business and consumer confidence, increased material costs, Higher operating and finance costs
prolonged supply chains and reduced labour supply
Covenant headroom monitored and stress tested
Reduced financial and operational flexibility
Decline in real estate valuations due to macroeconomic conditions
Fixed rate financing and derivative contracts to provide interest rate
protection
Persistent significant discount in the share price relative to EPRA NTA
Monitoring proposals and emerging policy and legislation, with industry
Uncertain political climate and/or changes to legislation and policies lobbying where appropriate
following change in Government
Engagement with key stakeholders and local authorities
Change in 2024: Stable
Context and actions taken:
The Group focuses on prime assets in the West End of London which historically
have proved to be economically resilient.
The Group has had a long-term focus on maintaining a strong balance sheet,
with sufficient liquidity and debt covenant headroom, to ensure it is able to
withstand market volatility and take advantage of opportunities. As at 31
December 2024, the Group has access to cash and undrawn facilities of £559.8
million.
Extensive forecasting, stress testing and modelling of various scenarios has
been undertaken, including sensitivities arising from the current
macroeconomic environment, to help plan for future impacts on the business.
Funding, debt and treasury metrics are monitored on a continual basis with a
focus on preserving liquidity and capital.
A downside scenario has been analysed in connection with the going concern
assessment, details of which are set out in note 1 'Principal accounting
policies' within 'Going concern'. The financial statements have been prepared
on a going concern basis.
We remain in close dialogue with local authorities to understand future plans
and work constructively to position the estate in the best possible manner.
Portfolio
Inability of the Group to adopt the appropriate strategy or to react to Inability to deliver business plan or a structural change to the business plan Focus on prime assets, locations and uses where, in normal conditions, there
changing market conditions or changing consumer behaviour impacting returns or capital values is a structural imbalance between availability of space and demand
Portfolio concentration Establish asset clusters to provide the opportunity to drive long-term growth
and returns
Volatility in the investment market
Regular assessment of investment market conditions including bi-annual
external valuations
Regular strategic analysis with focus on creating mixed-use destinations and
residential districts with unique attributes
Reconfigure and repurpose space to respond to, and anticipate, changing
customer demand.
Change in 2024: Stable
Context and actions taken:
The Group focuses on prime assets in the West End of London primarily in the
retail and food & beverage sector. The value of control over areas brings
the ability to curate and drive growth over the long term. We actively promote
our areas to drive footfall and curate areas to maintain places that are
popular.
Sustained customer demand has led to low vacancy levels with consistently high
footfall.
Through regular dialogue with potential and current customers and regular
assessments of the market, we are able to better understand market demand and
reconfigure space as appropriate.
Operational resilience
Misconduct or poor operational or sustainability standards Reduced rental income, higher operating costs, and/or reduced capital values Supplier procurement policy and regular monitoring of external advisers
Poor performance from one of the Group's third-party advisers and contractors Reduced financial and operational flexibility Engagement with key stakeholders and local authorities
Catastrophic event such as a terrorist attack, natural disaster, health Diminishing London's status Building reinstatement, loss of rent and terrorist insurance
pandemic or cyber security crime
Business disruption or damage to property Detailed business continuity and crisis communication plans in place
Reputational damage On-site security and cyber security in place
Health and safety policies and procedures
Close liaison with police, National Counter Terrorism Security Office (NaCTSO)
and local authorities
Change in 2024: Stable
Context and actions taken:
Whilst being invested in one area is a risk, the Group's ownership in prime
West End real estate is also a strength and an opportunity, providing control
and allowing curation of the area to maintain places that are popular.
Given the high-profile nature of the Group's assets, the risk of an external
event is inevitably heightened. It is therefore important that the Group
maintains recommended levels of insurance and implements effective security
and health and safety policies.
Business continuity plans for both employees and service providers, including
introduction of external resources, if required, and other policies have been
reviewed together with HR policies, technology and communication where
appropriate. IT security systems that support data security and disaster
recovery are in place.
Cyber security and its impact on data and IT infrastructure, including both
widespread risks such as state-sponsored cyber-attacks and those targeted
directly at our systems and data continues to be a key focus, with support
from external advisers, including specialist consultants, to ensure
appropriate controls and security protocols are in place. Employees are
provided with regular cyber security and phishing training.
Leasing and asset management
Inability to achieve target rents or to attract target customers due to market Decline in customer demand for the Group's properties High quality customer mix
conditions
Reduced income and increased vacancy Strategic focus on creating mixed-use destinations with unique attributes
Competition from other locations/formats
Reduced return on investment and development property Engagement with local and national authorities
Unfavourable planning/licensing policy, legislation or action impacting on the
ability to secure approvals or consents Pre-application and consultation with key stakeholders and landowners
Regular assessment of market conditions and development strategy
Business strategy based on long-term returns
Change in 2024: Stable
Context and actions taken:
The Group takes measured risks by using its expertise in place-making and
creative and active asset management to deliver long-term value through rental
growth and attracting new customers. During 2024, leasing activity remained
strong, with high occupancy levels reflecting the strength of demand for prime
central London real estate.
Many of the Group's customers are exposed to the changes and challenges facing
the retail and food & beverage sectors, including macroeconomic factors,
such as availability and cost of credit for customers and their businesses,
the potential for the level of consumer spending to be impacted by
cost-of-living pressures, business and consumer confidence, inflation rates,
energy costs, supply chain disruption, labour shortages and other operational
costs.
The Group looks for opportunities to create or enhance value in the portfolio
through the planning process, cognisant of the risks but using our experience
and skill to deliver our objectives.
The Group has a focused leasing and marketing strategy, ensuring the business
is well-positioned. The Group regularly engages with suppliers to understand
their ability to meet our requirements and standards.
People
Inability to retain and recruit the right people and develop leadership skills Inability to execute strategy and business plan Succession planning, performance evaluations, training and development
within the business
Constrained growth, lost opportunities Long-term and competitive incentive rewards
Key person risk as the Group has a relatively limited headcount
Pressure on corporate costs Flexible and modern working practices
Change in 2024: Stable
Context and actions taken:
The success of the business is down to a dedicated team of skilled and
talented individuals working collaboratively together. The health and
well-being of our people is of the utmost importance including the ability to
create a culture and environment that allows each person to grow, develop and
perform to the best of their abilities.
There remains a risk of illness or absence across employees, management or
service providers which would disrupt the day-to-day activities of the Group's
business and running of the estate. Team communication strategies have been
implemented to ensure managers can adequately supervise and support employees
where they are working from home.
Recruiting and on-boarding policies have been adjusted where necessary to
ensure that the business is able to continue to attract, develop and retain
the best possible resources.
We continue to monitor closely employees' mental and physical well-being and
the health and safety of our employees and service providers remains a top
priority with regular seminars and webinars from external experts.
Climate change
Physical impact on our assets from rising temperatures or other extreme Reduced income, capital values or business disruption Company manages climate-related risks and opportunities and sustainability
climate-related event such as flooding
team in place
Increased operating costs to meet reporting and target metrics and compliance
Transitional challenge of increasing and more onerous compliance and reporting
Net Zero Carbon target has been reset to 2040 to align with the Science Based
requirements, as well as retrofitting, insuring or leasing our heritage assets Increased capital costs of retrofitting, or inability to resolve listed Targets initiative long-term carbon reduction targets. For more detail on the
on an appropriate whole life carbon basis building or planning challenges, leads to buildings becoming carbon stranded mitigation measures in place for climate risk, please refer to the Group's
TCFD disclosures in the 2024 Annual Report as well as the Group's Net Zero
Inability to keep pace with customer and consumer demand for proactive action Reduced income through lower rents and longer void periods due to reduced Carbon Pathway.
to manage and mitigate climate-related risk customer demand
Active management plan with external reporting via recognised indices and
benchmarks, including EPRA, CDP, MSCI and GRESB
Continued engagement with stakeholders in order to preserve heritage
buildings, while enhancing environmental performance
Pro-active customer and consumer engagement programme and setting of
appropriate climate-related targets on both development and operations
Change in 2024: Stable
Context and actions taken:
The Group believes in taking a responsible and forward-looking approach to
environmental issues and the principles of sustainability. The Group
recognises the urgent responsibility to tackle climate change and is committed
to meeting our 2030 carbon reduction targets and has reset our Net Zero Carbon
target to 2040 to align with the Science Based Targets initiative ("SBTi")
long-term carbon reduction targets. As a long-term steward of the West End,
the Group understands the benefits of a strong track record of restoring and
celebrating the heritage of the area through considered refurbishments and
developments.
The Group has made material progress in the decarbonisation of the portfolio.
We are at a critical point for action and will continue our efforts in 2025 to
reduce greenhouse gas emissions in our buildings and operations. This requires
more innovative and sustainable ways of working, and includes our supply chain
partners across development and operational disciplines, our customers, as
well as our corporate actions.
Compliance with law and regulations
Breach of legislation, regulation or contract Prosecution for non-compliance with legislation Appointment of external advisers to monitor changes in law or regulation
Inability to react to or anticipate legal or regulatory changes, including Litigation or fines, reputational damage Members of staff attend external briefings to remain cognisant of legislative
potential changes to the Landlord and Tenant Act or other associated reforms
and regulatory changes
Distraction of management
Accidents causing loss of life or very serious injury to employees,
Health and safety procedures, training and governance across the Group
contractors, customers and visitors to the Group's properties; or near misses
of the same Appointment of reputable contractors
Exit from REIT regime due to non-compliance with REIT requirements Adequate insurance held to cover the risks inherent in property ownership and
construction projects
Change in 2024: Stable
Context and actions taken:
Compliance with law and regulations, including health and safety, remains a
key priority for the Board.
Protocols are in place and communicated across the various stakeholder groups
to ensure everyone is aware of new legislation and requirements.
The health and safety of our people and the public is a key priority. The
Group works closely with its stakeholders to mitigate health and safety risks.
We remain in communication with HMRC regarding our REIT status, the Group's
ability to comply with the requirements and the approach which HMRC will take
in relation to any breach of the REIT conditions.
DIRECTORS' RESPONSIBILITIES
Statement of Directors' responsibilities
The statement of Directors' responsibilities below has been prepared in
connection with the Group's full Annual Report for the year ended 31 December
2024. Certain parts of the Annual Report have not been included in this
announcement as set out in Note 1 to the condensed financial information.
The Directors consider that the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed in the Governance
section of the Annual Report confirm that, to the best of their knowledge:
· the Group financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
· the Strategic Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
The responsibility statement was approved by the Board of Directors on 26
February 2025 and signed on its behalf by:
Ian Hawksworth
Chief Executive
26 February 2025
Situl Jobanputra
Chief Financial Officer
26 February 2025
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December
2024
Note 2024 2023
£m
£m
Revenue 4 227.1 195.1
Costs 4 (60.0) (53.2)
Gross profit 4 167.1 141.9
Other income - 2.7
Administration expenses 5 (42.7) (83.8)
Gain/(loss) on revaluation and sale of investment property 194.6 (65.0)
Change in value of investments and other receivables (7.0) (12.5)
Change in fair value of financial assets at fair value through profit or loss - 52.0
Operating profit 312.0 35.3
Finance income 6 14.8 15.6
Finance costs 7 (72.0) (67.5)
Other finance income 6 4.5 4.1
Other finance costs 7 (6.5) (31.3)
Change in fair value of derivative financial instruments (0.9) (11.3)
Net finance costs (60.1) (90.4)
Profit from joint ventures and associates 11 4.5 0.2
Gain on bargain purchase - 805.5
Loss on sale of associate 11 (4.0) -
Profit before tax 252.4 750.6
Taxation 8 (0.3) (0.2)
Profit for the year 252.1 750.4
Earnings per share
Basic earnings per share 3 13.8p 45.5p
Diluted earnings per share 3 13.8p 45.3p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December
2024
2024 2023
£m
£m
Profit for the year 252.1 750.4
Other comprehensive (expense)/income
Items that will not be reclassified to profit or loss:
Revaluation (loss)/gain on owner-occupied property (0.1) 1.8
Total comprehensive income for the year 252.0 752.2
CONSOLIDATED BALANCE SHEET
As at 31 December 2024
Note 2024 2023
£m
£m
Non-current assets
Investment property 10 4,899.1 4,740.2
Property, plant and equipment 25.5 24.0
Investments in joint ventures and associates 11 - 83.4
Derivative financial instruments - 1.4
Trade and other receivables 12 139.7 116.1
5,064.3 4,965.1
Current assets
Trade and other receivables 12 30.4 42.7
Derivative financial instruments 3.4 8.3
Cash and cash equivalents 13 124.0 200.2
157.8 251.2
Assets held for sale
Investment property held for sale 10 9.8
9.8 -
Total assets 5,231.9 5,216.3
Non-current liabilities
Borrowings 14 (1,467.8) (1,534.8)
Lease liabilities (2.7) (2.7)
Derivative financial instruments (1.8) (7.2)
(1,472.3) (1,544.7)
Current liabilities
Borrowings 14 - (94.9)
Lease liabilities (0.3) (0.3)
Tax liabilities (0.2) (0.2)
Trade and other payables (84.8) (96.0)
(85.3) (191.4)
Total liabilities (1,557.6) (1,736.1)
Net assets 3,674.3 3,480.2
Equity
Share capital 16 488.2 488.2
Other components of equity 3,186.1 2,992.0
Total equity 3,674.3 3,480.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Note Share Share Own Capital redemption reserve Merger Share-based payment reserve Other Retained Total
capital
premium
£m
reserves
earnings
equity
£m
£m shares(1) £m reserve(2)
£m
£m
£m
£m
£m
At 1 January 2023 212.8 232.5 - 1.5 293.7 9.8 (0.4) 811.7 1,561.6
Profit for the year - - - - - - 750.4 750.4
Other comprehensive income for the year - - - - - - 1.8 1.8
Total comprehensive income for the year - - - - - - - 752.2 752.2
Completion of all-share merger 273.9 (32.1) 962.3 - - - 1,204.1
Dividends 9 - - - - - - - (41.9) (41.9)
Issue of shares and realisation of share-based payment reserve on employee 1.5 (0.8) (9.8) 11.9 2.8
share options(3)
Fair value of share-based payment - - - - - 1.3 - - 1.3
Realisation of cash flow hedge - - - - - 0.1 - 0.1
Balance at 31 December 2023 488.2 232.5 (32.9) 1.5 1,256.0 1.3 (0.3) 1,533.9 3,480.2
Profit for the year - - - - - - - 252.1 252.1
Other comprehensive expense for the year - - - - - - - (0.1) (0.1)
Total comprehensive income for the year - - - - - - - - 252.0 252.0
Dividends 9 - - - - - - - (61.1) (61.1)
Fair value of share-based payment - - - - - 3.1 - - 3.1
Realisation of cash flow hedge - - - - - - 0.1 - 0.1
Balance at 31 December 2024 488.2 232.5 (32.9) 1.5 1,256.0 4.4 (0.2) 1,724.8 3,674.3
1. Represents the nominal value of 128,350,793 shares issued to a controlled
entity in respect of secured shares previously held as collateral for the
exchangeable bonds and 3,146,886 shares held by the Group's Employee Benefit
Trust in respect of employee share awards.
2. Represents non-qualifying consideration received following previous share
placings and the all-share merger with Shaftesbury PLC completed on 6 March
2023. The amounts taken to the merger reserve do not currently meet the
criteria for qualifying consideration and therefore will not form part of
distributable reserves as they form part of linked transactions.
3. Represents the issue of 6,170,629 new shares and subsequent realisation of
the outstanding share-based payment reserve on the close out of the Group's
share scheme prior to completion of the all-share merger. Following the
vesting, 3,146,886 shares were purchased by the Group's Employee Benefit
Trust.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
Note 2024 2023
£m
£m
Cash flows from operating activities
Cash generated from operations 19 108.7 29.8
Finance costs paid (72.0) (59.5)
Interest received 15.0 16.1
Net cash inflow/(outflow) from operating activities 51.7 (13.6)
Cash flows from investing activities
Purchase and development of property (130.4) (51.2)
Purchase of fixed assets (2.3) (3.4)
Sale of property 136.6 88.1
Cash acquired in a business combination - 118.1
Dividends received from associate 1.2 1.5
Sale of associate 11 82.5 -
Loans to joint ventures and associates repayment received 15.6 2.7
Net cash inflow from investing activities 103.2 155.8
Cash flows from financing activities
Borrowings repaid (305.0) (1,151.0)
Borrowings drawn 135.0 1,126.0
Acquisition of derivative financial instruments - (5.0)
Cash dividends paid 9 (61.1) (41.9)
Net cash outflow from financing activities (231.1) (71.9)
Net movement in cash and cash equivalents (76.2) 70.3
Cash and cash equivalents at 1 January 200.2 129.9
Cash and cash equivalents 31 December 13 124.0 200.2
NOTES TO ACCOUNTS
1 PRINCIPAL ACCOUNTING POLICIES
General Information
Shaftesbury Capital PLC (the "Company") was incorporated and registered in
England and Wales and domiciled in the United Kingdom on 3 February 2010 under
the Companies Act 2006 as a public company limited by shares, registration
number 7145051. The registered office of the Company is Regal House, 14 James
Street, London, WC2E 8BU, United Kingdom. The principal activity of the
Company is to act as the ultimate parent company of Shaftesbury Capital PLC
Group (the "Group"), whose principal activity is the investment and management
of property.
The Group's assets principally comprise investment property within the West
End of London, including Covent Garden, Carnaby, Soho and Chinatown.
Basis of preparation
The financial information set out in this announcement has been extracted from
the Company's consolidated financial statements for the year ended 31 December
2024 and does not constitute statutory accounts within the meaning of section
434 of the Companies Act 2006.
The consolidated financial statements and this announcement were approved by
the Board of Directors on 26 February 2025. The auditors have reported on the
consolidated financial statements for the year ended 31 December 2024 under
section 495 of the Companies Act 2006. The auditors' report is unqualified and
does not contain a statement under section 498(2) or (3) of the Companies Act
2006. The Company's statutory financial statements for the year ended 31
December 2023 have been filed with the Registrar of Companies and those for
the year ended 31 December 2024 will be filed following the Company's Annual
General Meeting.
The Group's consolidated financial statements are prepared in accordance with
United Kingdom-adopted international financial accounting standards
("UK-adopted IFRS" or "IFRS"), and the applicable legal requirements of the
Companies Act 2006. While the financial information included in this
preliminary announcement has been prepared in accordance with the recognition
and measurement criteria of international accounting standards ("IAS") in
conformity with the requirements of the Companies Act 2006 and UK-adopted IFRS
and complies with the disclosure requirements of the Listing Rules of the UK
Financial Conduct Authority, this announcement does not itself contain
sufficient information to comply with IASs and IFRSs. The Group expects to
publish full financial statements that comply with IFRS in March 2025.
The consolidated financial statements have been prepared on a going concern
basis under the historical cost convention as modified for the revaluation of
property and derivative financial instruments.
The accounting policies used by the Group in these consolidated financial
statements are consistent with those applied in the Group's financial
statements for the year to 31 December 2023, as amended to reflect the
adoption of new standards, amendments and interpretations which became
effective in the year.
Going concern
The Directors have considered the appropriateness of adopting the going
concern basis in preparing the consolidated financial statements. The Group's
going concern assessment covers the period to 30 June 2026 (the "going concern
period"), being at least 12 months from the date of authorisation of these
consolidated financial statements.
The core West End occupational market continues to demonstrate its enduring
appeal, with excellent levels of leasing activity, low vacancy and continued
customer sales growth. There is good leasing demand across all uses,
delivering rental income and valuation growth.
While geopolitical risk remains elevated and there is macroeconomic
volatility, the West End and the Group's unique portfolio of prime investments
have demonstrated remarkable resilience. The Group maintains a strong balance
sheet with a focus on resilience, flexibility and efficiency. There is
significant headroom against debt covenants and access to significant
liquidity. In preparing the assessment of going concern, the Directors have
considered projections of the Group's liquidity, committed capital
expenditure, income, costs, cash flows and debt covenants.
The Directors have assessed a base case and a downside scenario (being a
"severe but plausible" scenario).
As at the year end, the Group had net debt of £1.4 billion, an EPRA LTV ratio
of 27 per cent and Group interest cover of 2.9 times. The Group is projected
to have sufficient cash reserves and undrawn facilities to meet debt
maturities during the going concern period. Drawn debt is at fixed rates or
currently has interest rate protection in place. Interest rate hedging is in
place which caps SONIA exposure at 3.0 per cent on £250 million of notional
value to December 2025. Further hedging arrangements will be put in place as
appropriate.
The Group's debt matures between March 2026 and 2037. Debt maturities during
the going concern assessment period relate to the £275 million exchangeable
bond, which can be repaid or refinanced in both the base case and the downside
scenario.
The Group's financial resources are expected to be sufficient to cover its
commitments over the going concern period.
Relative to the Group's base case forecast, the downside scenario includes the
following key assumptions:
· Substantial reduction in forecast rental income due to a combination of extended voids and customer failures;
· Elevated SONIA rates in excess of current market expectations; and
· Declines in rental values, along with a widening of valuation yields, resulting in reduced asset values.
The near-term impact of climate change risks within the going concern period
has been considered in the downside scenario and is expected to be immaterial.
Under the downside scenario, the Group is expected to remain in compliance
with the loan-to-value and interest cover covenants of its individual
financing arrangements.
In addition to considering a downside scenario, the Board has also undertaken
reverse stress testing, which indicates that the Group could withstand a
decrease of approximately 45 per cent in income and valuations before
breaching its debt financial covenants.
Based on their analysis, the Directors are satisfied that there is a
reasonable expectation that the Group will be able to meet its ongoing and
future commitments for at least 12 months from the date of approval of the
consolidated financial statements and have therefore resolved that the Group's
consolidated financial statements be prepared on a going concern basis.
Critical accounting judgments and key sources of estimation and uncertainty
The preparation of consolidated financial statements in accordance with IFRS
requires the Directors to make judgements, estimates and assumptions that
affect the reported amounts of assets, liabilities, equity, income and
expenses from sources not readily apparent. Although these estimates and
assumptions are based on management's best knowledge of the amount, historical
experiences and other factors, actual results ultimately may differ from those
estimates. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period.
The most significant area of estimation uncertainty is in respect of the
valuation of the property portfolio where external valuations are obtained.
The fair value of the Group's investment and trading property (trading
property included within the Lillie Square joint venture) at 31 December 2024
was determined by independent, appropriately qualified external valuers CBRE
and Cushman & Wakefield for the wholly owned property portfolio, and JLL
for the Lillie Square joint venture. The valuations conform to the Royal
Institution of Chartered Surveyors ("RICS") Valuation Professional Standards.
As various inputs used in the valuation calculations are based on assumptions,
property valuations are inherently subjective and subject to a degree of
estimation uncertainty. The Group's external valuers have made a number of
assumptions including, but not limited to, market yields, ERVs and void
periods. These assumptions are in accordance with the RICS Valuation
Professional Standards, however, if any prove to be incorrect, it may mean
that the value of the Group's properties differs from their valuation reported
in the financial statements, which could have a material effect on the Group's
financial position. The key unobservable inputs used in the valuation models
are those in respect of equivalent yields and ERV, which are summarised within
note 10 'Property portfolio' and additional information is provided in
'Analysis of property portfolio'. Further information on the approach taken by
the valuers in valuing the property portfolio and a sensitivity analysis on
equivalent yields and ERV, which are the most significant assumptions
impacting the fair values, is set out in note 10 'Property portfolio'.
Other areas of judgment and estimation in the financial statements (which are
not considered critical) include REIT compliance, the impairment of and
expected credit loss allowance on trade receivables and share-based payments.
New accounting policies
In the current year, the Group has applied the below amendments to IFRS
Standards and Interpretations issued by the International Accounting Standards
Board that are effective for annual periods that begin on or after 1 January
2024.
· IAS 1 'Presentation of Financial Statements' (amendment) (Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants)
· IFRS 16 'Leases' (amendment) (Lease liability in a sale and leaseback)
· IAS 7 'Statement of cash flows' and IFRS 7 'Financial Instruments: Disclosures' (amendment) (Supplier finance arrangements)
The adoption of the above amendments has not had a material impact on the
amounts reported in the consolidated financial statements or on the
disclosures apart from the amendments to IAS 1, which have resulted in
additional disclosure, but have not had an impact on the classification of the
Group's liabilities.
At the date of approval of the consolidated financial statements the following
new accounting standards and amendments to accounting standards were in issue
but are not yet effective. These new standards and amendments have not been
applied in these consolidated financial statements.
· IAS 21 'The Effects of Changes in Foreign Exchange Rates' (amendment) (Lack of Exchangeability)
· IFRS 9 'Financial Instruments' and IFRS 7 'Financial Instruments: Disclosures' (amendment) (Classification and Measurement of Financial Instruments)
· IFRS 18 'Presentation and Disclosure in Financial Statements' (new standard)
The amendment to IAS 21 is effective for periods beginning on or after 1
January 2025 whilst the amendments to IFRS 9 and IFRS 7 are effective for
annual periods beginning on or after 1 January 2026. The Group has assessed
the impact of these amendments and does not anticipate any material impact on
the consolidated financial statements.
IFRS 18 is effective for annual periods beginning on or after 1 January 2027.
The Group is assessing the impact of this new standard and the Group's
financial reporting will be presented in accordance with this standard from 1
January 2027.
2 SEGMENTAL REPORTING
IFRS 8 requires operating segments to be reported in a manner consistent with
the internal financial reporting reviewed by the chief operating decision
maker. The chief operating decision maker of the Group is the Executive
Committee, which consists of the Chief Executive, Chief Financial Officer and
the two Executive Directors. The information reviewed by the Executive
Committee is prepared on a basis consistent with these financial statements.
That is, the information is provided and monitored at a Group level and
includes the IFRS reported results, EPRA and underlying measures.
In assessing the identification of operating segments, the Group considers the
activities of the chief operating decision maker including decision making
authorities for allocation of resources and the information they regularly
receive. This consideration also factors that performance measures are set and
only monitored at a single Group level. The Annual Report includes additional
operational information on the property portfolio grouped by village and use.
This information is used within certain levels of the business and is also
considered useful for readers of the Annual Report but is not used by the
chief operating decision maker for monitoring performance or the allocation of
resources.
3 PERFORMANCE MEASURES
The Group has applied the European Securities and Markets Authority guidelines
on alternative performance measures ("APMs") in these annual results. An APM
is a financial measure of historical or future financial performance, position
or cash flow of the Group which is not a measure defined or specified in IFRS.
Details of all APMs used by the Group are set out in the APM section.
As is usual practice in the sector, the Group presents APMs for certain
indicators, including earnings, earnings per share and net tangible assets,
making adjustments as set out by EPRA in its Best Practice Recommendations.
These recommendations are designed to make the financial statements of public
real estate companies more comparable across Europe, enhancing the
transparency, comparability and coherence of the sector.
One of the key performance measures which the Group uses is underlying
earnings. The underlying earnings measure reflects the underlying financial
performance of the Group's West End property rental business and is used for
the calculation of dividends. The measure aligns with the main principles of
EPRA earnings. EPRA earnings excludes valuation movements on the wholly owned,
joint venture and associate properties, profit or loss on disposal of
investment properties and investments in associates, fair value changes of
financial instruments and listed investments, cost of early close out of debt,
gain on bargain purchase and IFRS 3 merger-related transaction costs.
Following updated guidance issued by EPRA in 2024, EPRA earnings now also
include adjustments for certain non-operating and exceptional items. The
non-operating and exceptional items adjusted for by the Group in the current
and prior year include the fair value movements of the option component of the
exchangeable bond, the unwinding of the IFRS 3 fair value of debt following
the completion of the all-share merger in March 2023 and merger-related
integration and other non-underlying expenses incurred. These costs are
considered non-recurring as they relate to significant transactions outside
the ongoing operations of the Group.
In calculating underlying earnings in both years, additional adjustments are
made to exclude the financial performance of the Lillie Square joint venture,
associated tax adjustments and the interest receivable on the loan issued to
the joint venture by the Group. Lillie Square is not considered to be a core
part of the operations of the Group and therefore its results are not included
in underlying earnings.
A summary of the number of shares, on a basic and diluted basis, in issue at
the year end, and on a weighted average basis for the year, is set out in the
table below:
Number of shares
2024 2024 2023 2023
Weighted average In issue Weighted average In issue
million
million
million million
Ordinary shares 1,953.2 1,953.2 1,757.0 1,953.2
Own shares - employee benefit trust (3.1) (3.1) (2.6) (3.1)
Own shares - exchangeable bond(1) (128.4) (128.4) (105.5) (128.4)
Number of shares - basic(2) 1,821.7 1,821.7 1,648.9 1,821.7
Dilutive effect of contingently issuable share option awards 5.7 10.0 6.5 6.5
Dilutive effect of contingently issuable deferred share awards 0.7 1.6 0.6 0.6
Number of shares - diluted(3) 1,828.1 1,833.3 1,656.0 1,828.8
1. Includes 127,008,787 shares held as
collateral for the exchangeable bonds.
2. Weighted average number of ordinary
shares used as the denominator in calculating basic earnings per share.
3. Weighted average number of ordinary
shares and potential ordinary shares used as the denominator in calculating
diluted earnings and net assets per share.
Earnings per share - IFRS
2024 2023
Basic earnings (£m) 252.1 750.4
Basic earnings per share (pence) 13.8p 45.5p
Diluted earnings per share (pence) 13.8p 45.3p
Earnings per share - EPRA and Underlying
Note 2024 2023
£m
£m
Basic earnings 252.1 750.4
EPRA Group adjustments:
(Gain)/loss on revaluation and sale of investment property (194.6) 65.0
Change in value of investments and other receivables 7.0 12.5
Change in fair value of derivative financial instruments - interest rate 6.3 7.4
derivatives
Change in fair value of financial assets at fair value through profit or loss 15 - (52.0)
Exceptional finance items - accelerated unwind of unamortised finance costs 1.0 26.8
and interest on early
close out of debt(1)
Loss on sale of associate(1) 11 4.0 -
Gain on bargain purchase - (805.5)
Merger-related transaction costs 5 - 35.8
Deferred tax adjustments - (0.1)
EPRA unusual items:
Merger related integration costs and non-underlying administrative expenses 5 3.3 8.7
Other exceptional finance items(2) 0.4 9.1
Impact of change in accounting policy on gross profit(3) - 5.1
EPRA joint venture and associate adjustments:
Profit on sale and transfer of trading property (1.5) (5.1)
(Gain)/loss on revaluation of investment property (3.0) 3.3
(Reversal of write down)/write down of trading property (0.9) 6.6
Deferred tax adjustments 1.2 (0.1)
EPRA earnings 75.3 67.9
EPRA earnings per share (pence)(4) 4.1p 4.1p
Underlying earnings adjustments:
Joint ventures adjustment - Lillie Square(5) (2.3) (7.5)
Underlying earnings 73.0 60.4
Underlying earnings per share (pence)(6) 4.0p 3.7p
1. Reflects the accelerated unwind of
unamortised costs on the refinancing of the revolving credit facility. The
2023 amount comprise £24.6 million unamortised fair value adjustment that
arose on completion of the merger which was accelerated on the early
redemption of the Carnaby and Chinatown bonds in April 2023 and the
unamortised costs on the loan facility of £2.2 million which was accelerated
on early repayment during the prior year. The unwind of the remaining fair
value balance on the Longmartin debt of £1.4 million has been recognised in
the loss on sale of associate on sale of our 50 per cent share during the
year.
2. Other exceptional finance items
include the unwind of the fair value adjustments on the debt facilities
acquired on merger of £6.1 million (including our share of the fair value
unwind of the Longmartin debt of £0.6 million up to date of disposal), offset
by the fair value movement of the exchangeable bond option of £5.4 million
(31 December 2023: £3.9 million) and other non-underlying finance income of
£0.3 million. £5.5 million (31 December 2023: £4.5 million) of the unwind
of the fair value of the debt is recorded through other finance costs included
in note 7 'Finance costs' and £0.6 million (31 December 2023: £0.7 million)
within the profit from Longmartin per note 11 'Investments in joint ventures
and associates'.
3. The £5.1 million relates to the
alignment of accounting policies on completion of the merger in the prior
year. £4.1 million of the adjustment was recognised through the straight
lining of tenant lease incentives and £1.0 million in property expenses.
Historically, the Group amortised tenant lease incentives and deferred letting
fees on a straight-line basis over the lease term to lease expiry as the
assumption was that the lessees were reasonably certain not to exercise their
option to break. This was amended in the prior year, such that all lease
incentives are amortised over the non-cancellable period of the lease. As a
result, other receivables within the consolidated balance sheet at 31 December
2023 decreased by £5.1 million with a corresponding reduction to gross
profit. The £5.1 million reduction to gross profit had been adjusted for in
order to reflect the true performance of the business during 2023.
4. Prior year comparatives have been
represented based on changes to EPRA earnings following the publication of
updated EPRA Best Practice Recommendations Guidelines in September 2024.
5. The Lillie Square joint venture is
not considered part of the core underlying business of the Group and therefore
its results are excluded from underlying earnings. The adjustment includes
£3.8 million (31 December 2023: £3.7 million) interest receivable by the
Group on the interest-bearing loans issued to the joint venture and £1.5
million (31 December 2023: £3.8 million) of adjustments made to EPRA earnings
for profit on sale and transfer of trading property, loss on revaluation of
investment property and reversal of write down of trading property.
6. Had the all-share merger of Capital
& Counties Properties PLC and Shaftesbury PLC completed on 1 January 2023,
the underlying earnings of the Group would have been £62.8 million or 3.4
pence per share.
Net assets per share
2024 2023
EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV
£m
£m
£m
£m
£m
£m
IFRS total equity(1) 3,674.3 3,674.3 3,674.3 3,480.2 3,480.2 3,480.2
Unrecognised surplus on trading property - joint venture 0.1 0.1 0.1 1.7 1.7 1.7
Fair value of financial instruments - interest rate derivatives(2) (3.4) (3.4) - (9.7) (9.7) -
Fair value adjustment of exchangeable bond(3) (0.4) (0.4) - 2.0 2.0 -
Real Estate Transfer Tax 333.1 - - 332.2 - -
Adjustment of fixed rate debt from carrying value to fair value(4) - - 50.8 - - 29.8
Deferred tax adjustments 0.5 0.5 - 5.2 5.2 -
NAV 4,004.2 3,671.1 3,725.2 3,811.6 3,479.4 3,511.7
NAV per share (pence) 218.4p 200.2p 203.2p 208.4p 190.3p 192.0p
1. IFRS total equity of 200.4 pence per
share (31 December 2023: 190.3 pence per share).
2. This relates to the fair value of
interest rate derivatives.
3. Adjustment to remove the exchangeable
bond option fair value and include the exchangeable bond liability at nominal
value of £275 million.
4. Excludes the fair value of
exchangeable bond option component included under derivative liabilities.
Headline earnings per share
Headline earnings per share is calculated in accordance with Circular 1/2023
issued by the South African Institute of Chartered Accountants, a requirement
of the Group's Johannesburg Stock Exchange secondary listing. This measure is
not a requirement of IFRS.
2024 2023
£m
£m
Basic earnings 252.1 750.4
Group adjustments:
Gain on bargain purchase - (805.5)
Loss on sale of associate 4.0 -
(Gain)/loss on revaluation and sale of investment property (194.6) 65.0
Headline earnings 61.5 9.9
Basic and diluted headline earnings per share (pence) 3.4p 0.6p
4 GROSS PROFIT
2024 2023
£m
£m
Rental receivable 197.2 171.9
Straight-lining of tenant lease incentives(1) 7.8 3.9
Service charge income 22.1 19.3
Revenue 227.1 195.1
Provision for expected credit loss (3.9) (2.0)
Property expenses(1) (33.1) (31.1)
Service charge expenses (22.1) (19.3)
Tenant lease incentives loss allowance (0.9) (0.8)
Costs (60.0) (53.2)
Gross profit 167.1 141.9
1. Included in the prior year is a
charge of £5.1 million relating to the alignment of accounting policies on
completion of the merger. £4.1 million of the adjustment was recognised
through the straight lining of tenant lease incentives and £1.0 million in
property expenses.
All revenue has been generated from operations within the United Kingdom.
5 ADMINISTRATION EXPENSES
2024 2023
£m
£m
Depreciation 0.3 0.4
Employee costs 23.0 25.1
Head office administration expenses 16.1 13.8
Merger-related transaction costs(1) - 35.8
Merger-related integration costs and non-underlying administration expenses 3.3 8.7
Administration expenses 42.7 83.8
1. Costs relate to transaction fees and
expenses in respect of the merger of Shaftesbury PLC and Capital &
Counties Properties PLC during the prior year.
6 FINANCE INCOME
2024 2023
£m
£m
Finance income:
On deposits and current accounts 5.0 6.3
On interest rate derivatives 9.8 9.3
Finance income 14.8 15.6
Other finance income:
On loans to joint ventures and associates 4.2 4.1
Non-underlying finance income 0.3 -
Other finance income 4.5 4.1
7 FINANCE COSTS
2024 2023
£m
£m
On bank facilities and loan notes 35.8 40.3
On exchangeable bonds(1) 8.5 8.4
On mortgage bonds - 1.8
On secured loans 27.4 16.5
On obligations under lease liabilities 0.3 0.5
Finance costs 72.0 67.5
Other finance costs:
Non-underlying finance charges(2) 6.5 31.3
Other finance costs 6.5 31.3
1. On 30 November 2020 the Group issued
£275 million of secured exchangeable bonds maturing in March 2026. The net
proceeds received from the issue of the exchangeable bonds have been split
between the financial liability element and an option component. The debt
component is accounted for at amortised cost and, after taking into account
transaction costs, accrues interest at an effective interest rate of 3.1 per
cent, of which 2 per cent (£5.5 million) represents the cash coupon on the
bond.
2. Non-underlying finance charges have
been excluded from the calculation of underlying earnings as these are
non-recurring costs and do not represent the underlying performance of the
business. Non-underlying finance charges include £1.0 million (31 December
2023: £2.2 million) for the accelerated amortisation on the refinancing of
the revolving credit facility during the year and £5.5 million (31 December
2023: £4.5 million) for the unwind of the fair value adjustment of debt on
completion of merger. The prior year charge includes an additional £24.6
million in relation to the accelerated unwind of the finance costs on early
redemption of the Chinatown and Carnaby bonds.
8 TAXATION
2024 2023
£m
£m
Current income tax:
Current income tax charge 0.5 0.2
Adjustments in respect of previous years (0.2) -
Current tax on profits 0.3 0.2
Deferred income tax:
On accelerated capital allowances - 0.1
On Group losses 0.9 (1.4)
On other temporary differences (0.9) 1.3
Deferred tax on profits - -
Total taxation charge in the consolidated income statement 0.3 0.2
As a UK REIT, the Group is exempt from UK corporation tax on income and gains
from qualifying activities. Non-qualifying activities are subject to UK
corporation tax.
9 DIVIDENDS
PID Non-PID Date paid 2024 2023
Pence per share £m £m
Ordinary shares
For year ended 31 December 2022:
Second interim dividend of 1.7 pence per share 0.7 1.0 20 March 2023 - 14.5
For year ended 31 December 2023:
Interim cash dividend of 1.5 pence per share - 1.5 18 September 2023 - 29.3
Final dividend of 1.65 pence per share 0.65 1.0 31 May 2024 32.2 -
For the year ended 31 December 2024:
Interim cash dividend of 1.7 pence per share 1.0 0.7 1 October 2024 33.2 -
Dividend expense(1) 65.4 43.8
1. Includes £4.3 million (31 December
2023: £1.9 million) paid to a controlled entity, Capco Investment London
(No.7) Scottish Limited Partnership, in respect of 128,350,793 shares, of
which 127,008,787 are held as collateral for the exchangeable bonds. The
entity has provided an undertaking not to exercise its voting rights in
respect of such ordinary shares but will receive the proposed dividend, all of
which was retained by the Group following calculation of the dividend
threshold test as set out in the exchangeable bond conditions. The Groups
dividend expense recorded in the consolidated statement of cash flows is
£61.1 million (31 December 2023: £41.9 million).
As a UK REIT, Shaftesbury Capital is required to distribute at least 90 per
cent of the Group's income profits from its tax-exempt property rental
business, and 100 per cent of the Group's UK REIT investment profits, by way
of a Property Income Distribution ("PID").
These distributions can be subject to withholding tax at 20 per cent.
Dividends from profits of the Group's taxable residual business are ordinary
dividends and will be taxed as an ordinary dividend.
On 26 February 2025, the Directors proposed a final cash dividend for 2024 of
1.8 pence per ordinary share which will be paid wholly as a PID. The final
cash dividend will be paid on 30 May 2025 to all shareholders on the register
on 25 April 2025.
10 PROPERTY PORTFOLIO
2024 2023
£m
£m
At 1 January 4,740.2 1,715.1
Investment property acquired on merger at 6 March 2023 fair value - 3,141.0
Additions from acquisitions 84.9 17.4
Additions from subsequent expenditure 43.1 35.1
Disposals (162.2) (81.5)
Transfers to owner-occupied property - (18.4)
Gain/(loss) on revaluation 202.9 (68.5)
Transfer to held for sale(1) (9.8) -
Carrying value of investment property 4,899.1 4,740.2
Adjustment in respect of fixed head leases (3.0) (3.0)
Adjustment in respect of tenant lease incentives and deferred letting fees 47.5 37.9
Market value of investment property 4,943.6 4,775.1
1. Two properties had exchanged for sale
at year end and were accordingly classified as held for sale. The sale of one
property completed post year end with the other anticipated to complete during
the first quarter of 2025.
2024 2023
£m
£m
The investment property valuation comprises:
Freehold properties 3,849.0 3,791.3
Leasehold properties 1,094.6 983.8
Market value of investment property 4,943.6 4,775.1
Market value of property portfolio
2024 2023
£m
£m
Market value of investment property 4,943.6 4,775.1
Market value of investment property held for sale 9.8 -
Market value of owner-occupied property 20.1 20.2
Market value of wholly-owned property portfolio 4,973.5 4,795.3
Valuation process
The fair value of the Group's wholly-owned investment property and
owner-occupied property at 31 December 2024 was determined by independent,
appropriately qualified external valuers, CBRE and Cushman & Wakefield.
The valuations conform to the Royal Institution of Chartered Surveyors
("RICS") Valuation Professional Standards. Fees paid to valuers are based on
fixed price contracts.
Each year the Company appoints the external valuers. The valuers are selected
based on their knowledge, independence and reputation for valuing assets such
as those held by the Group.
Valuations are performed bi-annually and are performed consistently across all
properties in the Group's portfolio. At each reporting date, appropriately
qualified employees of the Group verify all significant inputs and review
computational outputs. Valuers submit and present summary reports to the
Group's Audit Committee, with the Executive Committee reporting to the Board
on the outcome of each valuation round.
Net zero carbon and EPC compliance
We are committed to meeting our 2030 carbon reduction targets and have reset
our Net Zero Carbon target to 2040 to align with the Science Based Targets
initiative ("SBTi") long-term carbon reduction targets, achieving SBTi
validation in January 2025. A key element in achieving this will come from
carbon efficiencies created through refurbishments of the Group's property
portfolio.
During 2024, the Group's additions from subsequent expenditure were £43.1
million (31 December 2023: £35.1 million). Included within the £43.1 million
total subsequent expenditure is work which related to enhancing the
environmental performance of assets, and design stage work aimed at delivering
environmental enhancements.
We aim for 75 per cent of commercial units to have a "B" or above EPC
compliance rating by 2027 and for all commercial units to have a "B" or above
and residential units a "C" or above rating by 2030. Any committed capital
expenditure has been included in note 17 'Capital commitments'.
Valuation techniques
Valuations are based on what is determined to be the highest and best use.
When considering the highest and best use a valuer will consider, on a
property-by-property basis, its actual and potential uses which are
physically, legally and financially viable. Where the highest and best use
differs from the existing use, the valuer will consider the cost and the
likelihood of achieving and implementing this change in use in arriving at its
valuation.
The fair value of the Group's investment properties has primarily been
determined using a market approach, which provides an indication of value by
comparing the subject asset with similar assets for which price information is
available. The external valuers use information provided by the Group, such as
tenancy information and capital expenditure expectations. In deriving fair
value, the valuer also makes a series of assumptions, using professional
judgement and market observations. These assumptions include, but are not
limited to, market yields, ERVs and void periods. The critical key assumptions
are the equivalent yields and estimated future rental income (ERVs), as set
out within the table on the next page and within the 'Analysis of property
portfolio'. Equivalent yields are based on current market prices, depending
on, inter alia, the location, condition and use of the properties. ERVs are
calculated using a number of factors which include current rental income,
market comparatives and local occupancy levels. Whilst there is market
evidence for the key inputs, and recent transaction prices for similar
properties, there is still a significant element of estimation and judgement.
As a result of adjustments made to market observable data, these significant
inputs are deemed unobservable.
Non-financial assets carried at fair value, as is the case for investment
property held by the Group, are required to be analysed by level depending on
the valuation method adopted under IFRS 13 'Fair Value Measurement' ("IFRS
13").
The different valuation levels are defined as:
Level 1: valuation based on quoted market prices traded in active markets;
Level 2: valuation based on inputs other than quoted prices included within
Level 1 that maximise the use of observable data either directly or from
market prices or indirectly derived from market prices; and
Level 3: where one or more inputs to valuation are not based on observable
market data. Valuations at this level are more subjective and therefore more
closely managed, including sensitivity analysis of inputs to valuation models.
When the degree of subjectivity or nature of the measurement inputs changes,
consideration is given as to whether a transfer between fair value levels is
deemed to have occurred. Unobservable data becoming observable market data
would determine a transfer from Level 3 to Level 2. All investment properties
held by the Group are classified as Level 3 in the current and prior year.
The following table sets out the key unobservable inputs used in the valuation
models of the wholly-owned property portfolio:
Key unobservable inputs
2024 2023
Range
Range
(weighted average)
(weighted average)
£19-£296 £19-£276
Estimated rental value per sq. ft per annum (£92) (£83)
Equivalent yield 2.9%-6.5% 2.4%-6.0%
(4.45%) (4.30%)
Sensitivity to changes in key assumptions
As noted in the critical accounting judgements and key sources of estimation
and uncertainty section in note 1 'Principal accounting policies', the
valuation of the Group's property portfolio is inherently subjective. As a
result, the valuations are subject to a degree of uncertainty and are made on
the basis of assumptions which may not prove to be accurate, particularly in
periods of volatility or low transaction flow in the commercial property
market.
The sensitivity analysis below illustrates the impact on the fair value of the
Group's properties, from changes in the key assumptions:
Change in ERV
-10% -5% +5% +10%
£m £m £m £m
(Decrease)/increase in fair value (402.2) (202.7) 205.7 413.0
Change in Yield
-50bp -25bp +25bp +50bp
£m £m £m £m
Increase/(decrease) in fair value 660.1 309.1 (273.0) (523.2)
The table above shows movements in key assumptions in isolation. These key
unobservable inputs are interdependent. All other factors being equal, a
higher equivalent yield would lead to a decrease in the valuation, and an
increase in estimated rental value would increase the capital value, and vice
versa. However, there are interrelationships between the key unobservable
inputs which are partially determined by market conditions, which would impact
these changes.
At 31 December 2024, the Group was contractually committed to £24.1 million
(31 December 2023: £24.8 million) of future expenditure for the purchase,
construction, development and enhancement of investment property. Refer to
note 17 'Capital commitments' for further information on capital commitments.
11 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
Investments in joint ventures and associates are measured using the equity
method. All the Group's joint ventures and associates are held with other
investors on a 50:50 basis. At 31 December 2024, investments comprised of
Lillie Square joint venture ("LSJV"). The Group disposed of its interest in
the Longmartin associate ("Longmartin") on 24 October 2024.
The table below reconciles the opening to closing carrying value of
investments in joint ventures and associates as presented on the consolidated
balance sheet.
Investment in joint ventures and associates Longmartin LSJV Innova Total
£m
£m
£m
- £m
At 1 January 2023 - 0.2 0.2
Investments in associate acquired at fair value on completion of merger 84.7 - - 84.7
Share of profit/(loss) for the period(1) 0.2 (7.6) - (7.4)
Losses restricted(1) - 7.6 - 7.6
Dividend received (1.5) - - (1.5)
Disposal of joint venture - - (0.2) (0.2)
At 31 December 2023 83.4 - - 83.4
Share of profit/(loss for the period(1) 4.5 (1.8) - 2.7
Losses restricted(1) - 1.8 - 1.8
Dividend received (1.2) - - (1.2)
Disposal of associate (86.7) - - (86.7)
At 31 December 2024 - - - -
1. The loss from the Lillie Square joint
venture for the year of £1.8 million (31 December 2023: £7.6 million) has
been restricted in accordance with the requirements of IAS 28. Restricted
losses represent the Group's share of loss in LSJV in the year of £1.8
million (31 December 2023: £7.6 million) allocated to the cumulative losses
which exceed the Group's investment in the joint venture. Cumulative losses of
£40.2 million have been restricted to date (2023: £38.4 million) and as a
result the carrying value of the investment in LSJV is nil (31 December 2023:
nil). The Group holds £70.7 million (2023: £76.0 million) of recoverable
loans from LSJV within note 12 'Trade and other receivables'. The profit from
joint ventures and associates included within the consolidated income
statement consists of our share of Longmartin profit for the year of £4.5
million (31 December 2023: £0.2 million).
LSJV
LSJV was established as a joint venture arrangement with the Kwok Family
Interests ("KFI") in August 2012. The joint venture was established to own,
manage and develop land interests at Lillie Square. LSJV comprises Lillie
Square LP, Lillie Square GP Limited, acting as general partner to the
partnership, and its subsidiaries. All major decisions regarding LSJV are
taken by the Board of Lillie Square GP Limited, through which the Group shares
strategic control.
The summarised income statement of LSJV is presented below.
Summarised income statement 2024 2023
£m £m
Revenue 3.6 7.3
Gross profit/(loss) 1.3 (0.5)
Gain/(loss) on revaluation, sale and transfer of investment and trading 3.0 (7.5)
property
Administration expenses (0.7) (0.4)
Net finance costs(1) (7.1) (6.8)
Loss for the year after taxation (3.5) (15.2)
1. Net finance costs include £7.6
million (31 December 2023: £7.4 million) interest payable on the
interest-bearing loans issued to the joint venture by the Group and KFI.
Finance income receivable by the Group from LSJV of £3.8 million (31 December
2023: £3.7 million) is recognised in the consolidated income statement within
other finance income.
The summarised balance sheet of LSJV is presented below.
Summarised balance sheet 2024 2023
£m £m
Investment property 87.4 46.8
Other non-current assets 5.6 5.6
Non-current assets 93.0 52.4
Trading property 42.8 80.3
Other current assets 1.3 1.5
Cash and cash equivalents 9.7 15.9
Current assets 53.8 97.7
Amounts payable to joint venture partners(1) (224.8) (224.9)
Other current liabilities (2.1) (1.7)
Current liabilities (226.9) (226.6)
Net liabilities (80.1) (76.5)
Carrying value of investment and trading property 130.2 127.1
Unrecognised surplus on trading property(2) 0.3 3.3
Market value of investment and trading property 130.5 130.4
1. Amounts payable to joint venture
partners include working capital facilities advanced by the Group and KFI of
£29.2 million (31 December 2023: £29.0 million) and an interest bearing loan
of £163.0 million (nominal value) advanced by the Group and KFI to the joint
venture. The carrying value of the loan before impairment, including accrued
interest was £179.8 million (31 December 2023: £180.2 million). Recoverable
amounts receivable by the Group, net of impairments, are recognised on the
consolidated balance sheet within non-current trade and other receivables.
2. The unrecognised surplus on trading
property and the market value of LSJV's property portfolio are shown for
informational purposes only and are not a requirement of IFRS. Trading
property continues to be measured at the lower of cost and net realisable
value.
Longmartin
Longmartin is a joint venture arrangement with The Mercers's Company. Pursuant
to the terms of the Longmartin investment, the merger between Capital &
Counties Properties PLC and Shaftesbury PLC triggered the right for the
Mercers to acquire the Company's shares in the Longmartin investment. As a
result of the Mercers duly exercising their option to acquire the Company's
shares in the Longmartin investment, a sale of the Company's entire interest
in the investment was concluded on 24 October 2024.
The total proceeds from the sale amounted to £82.9 million, which comprised
of cash proceeds of £82.5 million and a receivable of £0.4 million. In
addition to the £82.5 million cash received, the loan to associate balance of
£11.6 million was repaid on disposal.
The carrying value of investment in associate immediately prior to disposal
amounted to £86.7 million. The loss on sale of associate of £4.0 million
included transaction costs of £0.2 million.
The summarised income statement of Longmartin up until the date of disposal,
is presented below.
Summarised income statement 1 January 2024 to 24 October 2024 6 March 2023 to 31 December
£m 2023
£m
Revenue 17.0 14.9
Gross profit 11.4 10.6
Administration expenses (0.3) (0.2)
Gain/(loss) on revaluation of investment property 7.8 (1.9)
Net finance costs (6.6) (7.5)
Taxation (3.3) (0.6)
Profit for the period after taxation 9.0 0.4
Dividends paid 2.4 3.0
12 TRADE AND OTHER RECEIVABLES
2024 2023
£m
£m
Non-current
Prepayments and accrued income(1) 39.9 28.5
Amounts receivable from joint ventures(2) 70.7 76.0
Amounts receivable from associates(3) - 11.6
Other receivables(4) 29.1 -
Trade and other receivables 139.7 116.1
Current
Rent receivable(5) 9.9 13.6
Prepayments and accrued income(1) 15.2 17.1
Other receivables(4) 5.3 12.0
Trade and other receivables 30.4 42.7
1. Includes tenant lease incentives and
deferred letting fees of £47.5 million (31 December 2023: £37.9 million).
2. Amounts receivable from joint
ventures represents an interest-bearing loan of £89.9 million (31 December
2023: £90.1 million) provided to LSJV. The loan bears interest at 4.25 per
cent per annum and is repayable on demand. As it is not the intention of the
Group to call on the loan in the next 12 months it has been presented as
non-current. £4.0 million of the loan balance was repaid in the current year.
The loan has been impaired by £19.2 million (31 December 2023: £14.1
million) to date. Included within current trade and other receivables is
working capital funding of £29.2 million due from LSJV (31 December 2023:
£29.0 million) that has been fully impaired.
3. The amount receivable from associates
in the prior year represented the loan of £11.6 million provided to
Longmartin, which was settled in the current year as part of the disposal of
Longmartin.
4. Other receivables include £29.1
million (31 December 2023: £7.0 million) of restricted cash held on deposit
as security for the secured term loans and bank facilities with certain
conditions restricting the use.
5. Rent receivable is shown net of an
expected credit loss provision of £8.0 million (31 December 2023: £4.8
million).
13 CASH AND CASH EQUIVALENTS
2024 2023
£m
£m
Cash at hand 11.7 10.4
Cash on short-term deposits 98.1 175.3
Cash 109.8 185.7
Tenant deposits(1) 14.2 14.5
Cash and cash equivalents 124.0 200.2
1. Tenant deposits included above relate
to cash held on deposit as security against tenant rent payments which are
subject to certain restrictions and therefore not available for general use by
the Group. The deposits are held in bank accounts administered by Group
Treasury and therefore included within cash and cash equivalents in the
consolidated balance sheet. Cash deposits against tenants' rent payment
obligations totalling £22.2 million (31 December 2023: £18.9 million) are
held in bank accounts administered by the Group's managing agents which are
not included within the consolidated balance sheet.
14 BORROWINGS
2024
Carrying Secured Unsecured Fixed Floating Fair Nominal
value
£m
£m
rate
rate
value
value
£m
£m
£m
£m
£m
Non-current
Bank loans 269.9 - 269.9 - 269.9 269.9 275.0
Loan notes (USPPs) 379.3 - 379.3 379.3 - 341.0 380.0
Secured loans 545.8 545.8 - 545.8 - 544.8 584.8
Exchangeable bonds(1) 272.8 272.8 - 272.8 - 263.1 275.0
1,467.8 818.6 649.2 1,197.9 269.9 1,418.8 1,514.8
Total borrowings 1,467.8 1,514.8
Cash, excluding tenant deposits (109.8)
Net debt 1,405.0
1. Fair value of exchangeable bonds
includes the fair value of the option component of £1.8 million.
2023
Carrying Secured Unsecured Fixed Floating Fair Nominal
value
£m
£m
rate
rate
value
value
£m
£m
£m
£m
£m
Current
Loan notes (USPPs) 94.9 - 94.9 94.9 - 93.0 95.0
94.9 - 94.9 94.9 - 93.0 95.0
Non-current
Bank loans 345.9 - 345.9 - 345.9 350.0 350.0
Loan notes (USPPs) 379.2 - 379.2 379.2 - 340.7 380.0
Secured loans 539.9 539.9 - 539.9 - 569.5 584.8
Exchangeable bonds(1) 269.8 269.8 - 269.8 - 256.9 275.0
1,534.8 809.7 725.1 1,188.9 345.9 1,517.7 1,589.8
Total borrowings 1,629.7 1,684.8
Cash, excluding tenant deposits (185.7)
Net debt 1,499.1
1. Fair value of exchangeable bonds
includes the fair value of the option component of £7.2 million.
£584.8 million (nominal value) of the Group's borrowings are secured by fixed
charges over certain investment properties held by subsidiaries, with a market
value of £1,681.1 million (31 December 2023: £1,624.2 million), and by
floating charges over the assets of certain subsidiaries.
There are currently no restrictions on the remittance of income from
investment properties.
Certain borrowing agreements contain financial and other covenants that, if
contravened, could alter the repayment profile. Details of financial covenants
are included within the 'Financial covenants' section. The Group has complied
with the financial covenants of all its borrowings during both years
presented.
The Group has two revolving credit facilities totalling £450 million, which
are undrawn at 31 December 2024.
Undrawn facilities and cash attributable to the Group, excluding tenant
deposits, at 31 December 2024 were £559.8 million (31 December 2023: £485.7
million).
The fair value of the Group's borrowings has been estimated using the market
value for floating rate borrowings, which approximates nominal value, and are
classified as Level 2 fair values as defined by IFRS 13. The fair values of
fixed rate borrowings have been determined by using a discounted cash flow
approach, using a current borrowing rate. The loans are classified as Level 3
fair value measurements as defined by IFRS 13 due to the use of unobservable
inputs, including own credit risk. The different valuation levels are defined
in note 10 'Property Portfolio'.
15 CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES
The table below sets out each class of financial asset and financial liability
as at 31 December:
2024 2023
Note Carrying Gain/(loss) Carrying Gain/(loss)
value
to profit or loss
value
to profit or loss
£m
£m
£m
£m
Derivative financial assets 3.4 (6.3) 9.7 (7.4)
Total held for trading assets 3.4 (6.3) 9.7 (7.4)
Cash and cash equivalents 13 124.0 - 200.2 -
Other financial assets(1) 115.0 - 113.2 -
Total cash and other financial assets 239.0 - 313.4 -
Investment held at fair value through profit or loss(2) - - - 52.0
Total investment held at fair value through profit or loss - - - 52.0
Derivative financial liabilities (1.8) 5.4 (7.2) (3.9)
Total held for trading liabilities (1.8) 5.4 (7.2) (3.9)
Borrowings 14 (1,467.8) - (1,629.7) -
Lease liabilities (3.0) - (3.0) -
Other financial liabilities(3) (62.7) - (78.5) -
Total borrowings and other financial liabilities (1,533.5) - (1,711.2) -
1. Includes rent receivable, amounts due
from joint ventures and associates and other receivables.
2. £52.0 million gain recognised in
2023 relates to the fair value movement on the 97 million Shaftesbury PLC
shares held until completion of the all-share merger on 6 March 2023.
3. Includes trade and other payables
(excluding rents in advance).
Fair value estimation
Financial instruments carried at fair value are required to be analysed by
level depending on the valuation method adopted under IFRS 13. The different
valuation levels are defined in note 10 'Property portfolio'.
The table below present the Group's financial assets and liabilities
recognised at fair value at 31 December 2024 and 31 December 2023. There were
no transfers between levels during the year.
2024 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m
£m
£m
£m
£m
£m
£m
£m
Held for trading assets
Derivative financial assets - 3.4 - 3.4 - 9.7 - 9.7
Total assets - 3.4 - 3.4 - 9.7 - 9.7
Held for trading liabilities
Derivative financial liabilities - (1.8) - (1.8) - (7.2) - (7.2)
Total liabilities - (1.8) - (1.8) - (7.2) - (7.2)
The fair values of derivative financial instruments are determined from
observable market prices or estimated using appropriate yield curves at 31
December each year by discounting the future contractual cash flows to the net
present values.
The fair values of the Group's cash and cash equivalents, other financial
assets carried at amortised cost and other financial liabilities are not
materially different from those at which they are carried in the consolidated
financial statements.
16 SHARE CAPITAL AND SHARE PREMIUM
Issue type Transaction Issue price Number Share Share
(pence)
of shares
capital
premium
date
£m
£m(1)
At 1 January 2023 851,450,638 212.8 232.5
Issued to satisfy employee share scheme awards March 25 6,170,629 1.5 -
Issued on completion of all-share merger(2) March 25 1,095,549,228 273.9 -
At 31 December 2023 1,953,170,495 488.2 232.5
Issued to satisfy employee share scheme awards(3) June 25 7,643 - -
At 31 December 2024 1,953,178,138 488.2 232.5
1. Nominal value of share capital of 25
pence per share.
2. On completion of the all-share merger
on 6 March 2023, 1,095,549,228 new shares were issued (including 128,350,793
shares issued to a Shaftesbury Capital controlled entity in respect of secured
shares previously held as collateral for the exchangeable bonds).
3. On 10 June 2024, 7,643 new shares
were issued to satisfy employee share scheme awards.
17 CAPITAL COMMITMENTS
At 31 December 2024, the Group was contractually committed to £24.1 million
(31 December 2023: £24.8 million) of future expenditure for the purchase,
construction, refurbishment and enhancement of investment property.
The Group's share of joint ventures capital commitments arising on LSJV
amounts to nil (31 December 2023: nil).
18 CONTINGENT LIABILITIES
The Group has contingent liabilities in respect of legislation, sustainability
targets, legal claims, guarantees and warranties arising from the ordinary
course of business. There are no contingent liabilities that require
disclosure or recognition in the consolidated financial statements.
19 CASH FLOWS FROM OPERATING ACTIVITIES
Note 2024 2023
£m
£m
Profit before tax 252.4 750.6
Adjustments:
(Gain)/loss on revaluation and sale of investment property(1) (197.6) 65.0
Gain on bargain purchase - (805.5)
Change in value of investments and other receivables 7.0 12.5
Change in fair value of financial assets at fair value through profit or loss 15 - (52.0)
Depreciation(2) 0.7 0.4
Amortisation of tenant lease incentives and other direct costs (5.6) 0.1
Provision for expected credit loss 3.9 2.0
Profit from joint ventures and associates 11 (4.5) (0.2)
Share-based payment 3.1 7.9
Finance income 6 (14.8) (15.6)
Other finance income 6 (4.5) (4.1)
Finance costs 7 72.0 67.5
Other finance costs 7 6.5 31.3
Change in fair value of derivative financial instruments 0.9 11.3
Loss on sale of associate 11 4.0 -
Change in working capital:
Change in trade and other receivables (4.6) (27.1)
Change in trade and other payables (10.2) (14.3)
Cash generated from operations 108.7 29.8
1. Included within the gain on
revaluation and sale of investment property in the consolidated income
statement is cash transaction costs of £3.0 million incurred on the disposal
of property.
2. £0.3 million of depreciation is
recognised within note 5 'Administration expenses' and £0.4 million is
recognised within note 4 'Gross profit'.
20 RELATED PARTY TRANSACTIONS
Transactions between the Group and its joint ventures and associates
Transactions during the year between the Group and its joint ventures and
associates, which are related parties, are disclosed in notes 11 'Investment
in joint ventures and associates', 12 'Trade and other receivables' and 17
'Capital commitments'. During the year the Group received management fees of
nil (31 December 2023: £0.1 million) that were charged on an arm's length
basis.
Property owned by Directors of the Company
A related party of the Group, Lillie Square GP Limited, entered into the
following related party transaction as defined by IAS 24 'Related Party
Disclosures':
Situl Jobanputra, Chief Financial Officer of Shaftesbury Capital, and a family
member own an apartment in the Lillie Square development. The disclosures in
respect of this purchase were included in previous financial statements.
Owners of apartments in the Lillie Square development are required to pay
annual ground rent, insurance premium fees, maintenance work fees and
bi-annual service charge fees, which for Directors are related party
transactions. During 2024, £7,962.78 had been paid to a related party of the
Shaftesbury Capital Group, Lillie Square GP Limited, in relation to these
charges.
Transactions with Directors are conducted at fair and reasonable market price
based upon similar comparable transactions at that time. Where applicable,
appropriate approval has been provided. Lillie Square GP Limited acts in the
capacity of general partner to Lillie Square LP, a joint venture between the
Group and KFI.
21 POST BALANCE SHEET EVENTS
In January 2025, the Group completed on the disposal of an investment property
for £3.0 million (before costs). The property was classified as held for sale
as at 31 December 2024. In February 2025, the Group acquired an investment
property for £6.0 million (before costs).
ALTERNATIVE PERFORMANCE MEASURES (unaudited)
The Group has applied the European Securities and Markets Authority guidelines
on alternative performance measures ("APMs") in these results. An APM is a
financial measure of historical or future finance performance, position or
cash flow of the Group which is not a measure defined or specified in IFRS.
Set out below is a summary of the APMs.
Many of the APMs included are based on the EPRA Best Practice Recommendations
reporting framework, a set of standard disclosures for the property industry,
which aims to improve the transparency, comparability and relevance of
published results of public real estate companies in Europe.
The Group also uses underlying earnings, property portfolio and financial debt
ratio APMs. Financial debt ratios are supplementary ratios which we believe
are useful in monitoring the capital structure of the Group. Additionally,
loan-to-value and interest cover are covenants within many of the Group's
borrowing facilities.
APM Definition of measure Nearest IFRS measure Explanation/ 2024 2023
reconciliation
Underlying earnings EPRA earnings adjusted for items not considered part of the core underlying Profit for the year Note 3 £73.0m £60.4m
activities of the Group
2023 pro forma underlying earnings(1) Profit for the year Table 4 N/A £62.8m
Underlying earnings Underlying earnings per weighted average number of ordinary shares Basic earnings per share Note 3 4.0p 3.7p
per share
2023 pro forma underlying earnings per weighted average number of ordinary Basic earnings per share Table 4 N/A 3.4p
shares
EPRA earnings(2) Earnings that reflect the operational performance of the Group Profit for the year Note 3 £75.3m £67.9m
EPRA earnings per share(2) EPRA earnings per weighted average number of ordinary shares Basic earnings per share Note 3 4.1p 4.1p
EPRA NTA Net asset value adjusted to include properties at fair value and to exclude Net assets attributable to shareholders Note 3 £3,671.1m £3,479.4m
certain items not expected to crystallise in a long-term investment property
business model
EPRA NTA per share EPRA NTA per the diluted number of ordinary shares Net assets attributable to shareholders per share Note 3 200.2p 190.3p
Market value of property portfolio Market value of wholly owned property portfolio Investment property Note 10 £4,973.5m £4,795.3m
Loan-to-value Net debt, at nominal value and excluding tenant deposits, divided by market N/A Financial covenants 28.2% 31.3%
value of property portfolio
Interest cover Underlying gross profit and other income divided by net underlying finance N/A Financial covenants 292.1% 288.4%
costs
Interest cover (excluding non-underlying administrative Underlying gross profit and other income less underlying administrative N/A Financial covenants 223.3% 212.7%
expenses divided by net underlying finance costs
expenses)
Total accounting return (TAR) The movement in EPRA NTA per share plus dividends per share paid during the N/A Table 1 7.0% 5.8%
year.
Total property return (TPR) Capital growth including gains and losses on disposals plus rent received less N/A Table 2 7.6% 2.2%
associated costs, including ground rent
Net debt to EBITDA Net debt, at nominal value, excluding tenant deposits, divided by EBITDA N/A Table 3 10.9 13.9
Gross debt with interest rate protection Proportion of the gross debt with interest rate protection, including interest N/A N/A 100% 100%
on cash deposits
Weighted average cost of debt - gross Cost of debt weighted by the drawn balance of external borrowings N/A Financial Review 4.0% 4.2%
Weighted average cost of debt - net Cost of debt weighted by the drawn and undrawn balance of external debt N/A Financial Review] 3.7% 3.4%
Cash and undrawn committed facilities Cash and cash equivalents, excluding tenant deposits, plus undrawn committed N/A Financial Review £559.8m £485.7m
facilities
1. The underlying earnings growth on a
pro-forma basis is 16.2 per cent
2. Prior year comparatives have been
represented based on changes to EPRA earnings following the publication of
updated EPRA Best Practice Recommendations Guidelines in September 2024. Refer
to note 3 'Performance measures' for further details.
1. Total accounting return
Note 2024 2023
£m
£m
Opening EPRA NTA (A) 3 190.3p 182.1p
Closing EPRA (NTA) 3 200.2p 190.3p
Increase in the year 9.9p 8.2p
Adjusted for:
Dividends per share paid in the current year 9 3.4p 2.3p
Total accounting return (B) 13.3p 10.5p
Total accounting return % (B/A) 7.0% 5.8%
3. Total property return
Note 2024
£m
Gross profit 4 167.1
Gain on revaluation and sale of investment property 194.6
Total capital return (A) 361.7
Market value of wholly-owned property portfolio 10 4,973.5
Gain on revaluation and sale of investment property (194.6)
Capital employed (B) 4,778.9
Total property return (A/B)(1) 7.6%
1. The prior year total property return
of 2.2 per cent, was calculated based on pro-forma information (obtained from
internal management accounts), assuming the all-share merger had completed at
the start of the financial year.
3. Net debt to EBITDA
Note 2024 2023
£m
£m
Underlying gross profit(1) 4 167.1 147.0
Underlying administration expenses(2) 5 (39.4) (39.3)
127.7 107.7
Adjusted for:
Depreciation 0.7 0.4
EBITDA (A) 128.4 108.1
Net debt (B) 14 1,405.0 1,499.1
Net debt to EBITDA (B/A) 10.9 13.9
1. Underlying gross profit for 2023
excludes the £5.1 million charge relating to the alignment of accounting
policies on completion of the merger as does not reflect the true performance
of the business.
2. Underlying administration expenses
exclude £3.3 million (2023: £44.5 million) of merger-related transaction and
integration costs and non-underlying administration expenses.
4. 2023 Pro forma underlying earnings
Pro forma
2023
£m
Shaftesbury Capital PLC 31 December 2023(1) 57.8
Shaftesbury PLC 1 January 2023 to 5 March 2023(2) 5.0
Pro-forma underlying earnings 62.8
Weighted average number of shares (million)(3) 1,821.7
Underlying earnings per share 3.4p
1. Represents the standalone results of
Capital & Counties Properties PLC for the 1 January to 5 March 2023, and
that of the Group for the period 6 March to 31 December 2023, less the
dividend income of £2.6 million received for the shareholding held in
Shaftesbury PLC pre-merger.
2. Reflects the underlying earnings for
Shaftesbury PLC for the period 1 January to 5 March 2023 obtained from
internal management accounts of Shaftesbury PLC.
3. Weighted average number of shares
used reflects that the shares issued on completion of the merger had been
effective from the beginning of the financial year.
COVENANTS
Financial covenants
31 December 2024
Maturity Nominal value Carrying value LTV Interest cover
covenant
covenant
£m £m
Private placement loan notes 2026-2037 380.0 379.3 60% 1.20x
Exchangeable bond 2026 275.0 272.8 N/A N/A
Unsecured term facilities(1) 2027-2029 275.0 269.9 60% 1.20x
Secured term loans (Canada Life) 2029 134.8 128.5 60% 1.40x
Secured term loans (Aviva) 2030-2035 450.0 417.2 65% 1.35x
Unsecured revolving credit facility (undrawn)(1) 2027 150.0 - 60% 1.20x
Revolving credit facility (undrawn) 2028 300.0 - 60% 1.20x
1. Additional requirement that Group
unencumbered assets are equal to or exceed 1.5x of Group unsecured debt.
Loan-to-value
Note 2024 2023
£m
£m
Debt at nominal value 14 1,514.8 1,684.8
Less: cash 13 (109.8) (185.7)
Net debt (A) 1,405.0 1,499.1
Total property portfolio at market value (B) 10 4,973.5 4,795.3
Loan-to-value (A/B) 28.2% 31.3%
Interest cover
Note 2024 2023
£m
£m
Finance costs 7 (72.0) (67.5)
Finance income 6 14.8 15.6
Net finance costs (A) (57.2) (51.9)
Underlying operating income:
Gross profit(1) 4 167.1 147.0
Other income - 2.7
Underlying operating income (B) 167.1 149.7
Interest cover (B/A) 292.1% 288.4%
1. 2023 excludes a £5.1 million charge
relating to the alignment of accounting policies on completion of the merger.
Interest cover (excluding non-underlying administration expenses)
Note 2024 2023
£m
£m
Finance costs 7 (72.0) (67.5)
Finance income 6 14.8 15.6
Net finance costs (A) (57.2) (51.9)
Underlying operating profit:
Gross profit(1) 4 167.1 147.0
Other income - 2.7
Administration expenses 5 (42.7) (83.8)
Less: merger related transaction and integration and non-underlying 5 3.3 44.5
administration expenses
Underlying operating profit (B) 127.7 110.4
Interest cover (including underlying administration expenses) (B/A) 223.3% 212.7%
1. 2023 excludes a £5.1 million charge
relating to the alignment of accounting policies on completion of the merger.
EPRA measures
EPRA Net Reinstatement Value ("EPRA NRV"), EPRA Net Tangible Assets ("EPRA
NTA") and EPRA Net Disposal Value ("EPRA NDV") are alternative performance
measures that are calculated in accordance with the Best Practices
Recommendations of the European Public Real Estate Association (EPRA) to
provide a transparent and consistent basis to enable comparison between
European property companies. EPRA NTA is considered to be the most relevant
measure for the Group's operating activity and is the primary measure of net
asset value.
The following is a summary of EPRA performance measures and key Group
measures. The measures are defined in the Glossary.
EPRA measure Definition of measure Explanation/ 2024 2023
reconciliation
EPRA earnings(1) Earnings that reflect the operational performance of the Group Note 3 75.3m 67.9m
EPRA earnings per share(1) EPRA earnings per weighted average number of ordinary shares Note 3 4.1p 4.1p
EPRA NTA Net asset value adjusted to include properties at fair value and to exclude Note 3 3,671.1m 3,479.4m
certain items not expected to crystallise in a long-term investment property
business model
EPRA NTA per share EPRA NTA per the diluted number of ordinary shares Note 3 200.2p 190.3p
EPRA NDV EPRA NTA amended to include the fair value of financial instruments and debt Note 3 3,725.2m 3,511.7m
EPRA NDV per share EPRA NDV per the diluted number of ordinary shares Note 3 203.2p 192.0p
EPRA NRV EPRA NTA amended to include real estate transfer tax Note 3 4,004.2m 3,811.6m
EPRA NRV per share EPRA NRV per the diluted number of ordinary shares Note 3 218.4p 208.4p
EPRA net initial yield Annualised rental income less non-recoverable costs as a percentage of market Table 1 3.8% 3.8%
value plus assumed purchaser's costs
EPRA topped-up initial yield Net initial yield adjusted for the expiration of the rent-free periods Table 1 4.1% 4.2%
EPRA vacancy ERV of unlet units (including those under offer) expressed as a percentage of Table 2 3.9% 4.9%
the ERV of the portfolio excluding units under development
Capital Expenditure Capital expenditure on acquisition and development of investment property Table 3 131.4m 53.8m
portfolio
EPRA LTV (Loan-to-Value) Ratio of adjusted net debt, including net payables, to the sum of the net Table 4 27.4% 30.9%
assets, including net receivables, of the Group, its subsidiaries and joint
ventures and associates, all on a proportionate basis, expressed as a
percentage
EPRA cost ratio Total adjusted costs as a percentage of gross rental income (including direct Table 5 38.9% 65.6%
vacancy costs)
Total adjusted costs as a percentage of gross rental income (excluding direct Table 5 34.8% 60.8%
vacancy costs)
Adjusted Company cost ratio Total adjusted costs as a percentage of adjusted gross rental income Table 5 37.3% 39.9%
(including direct vacancy costs)
Total adjusted costs as a percentage of adjusted gross rental income Table 5 33.3% 35.2%
(excluding direct vacancy costs)
Like-for-like rental growth Rental income for properties which have been owned throughout both years Table 6 5.7% 13.2%
without significant capital expenditure in either year, so income can be
compared on a like-for-like basis
1. Prior year comparatives have been
represented based on changes to EPRA earnings following the publication of
EPRA Best Practice Recommendations Guidelines in September 2024. Refer to note
3 'Performance measures' for further details.
1. EPRA Net initial yield and EPRA 'topped-up' net initial yield
2024 2023
£m
£m
Note
Investment property - wholly owned 10 4,973.5 4,795.3
Investment property - share of joint ventures and associates 43.7 182.2
Trading property (including share of joint venture) 21.6 41.8
Less: developments (228.0) (284.1)
Completed property portfolio 4,810.8 4,735.2
Allowance for estimated purchasers' costs 333.1 316.8
Gross up completed property portfolio valuation (A) 5,143.9 5,052.0
Annualised cash passing rental income 204.7 202.7
Property outgoings (6.9) (10.6)
Annualised net rents (B) 197.8 192.1
Add: notional rent expiration of rent periods or other lease incentives 14.9 18.2
Topped-up net annualised rent (C) 212.7 210.3
EPRA Net Initial Yield (B/A) 3.8% 3.8%
EPRA 'topped-up' Net Initial Yield (C/A) 4.1% 4.2%
The EPRA Net Initial Yield and EPRA 'topped-up' Net Initial Yield are
calculated based on EPRA guidelines and includes the wholly- owned property
portfolio and the Group's share of Lillie Square and Longmartin (applicable
only up until the point of disposal in October 2024).
2. EPRA vacancy rate
2024 2023
£m
£m
Estimated rental value of vacant space 9.3 10.9
Estimated rental value of the portfolio less refurbishment estimated rental 237.1 223.0
value
EPRA vacancy rate 3.9% 4.9%
EPRA vacancy rate includes units under offer, net of which vacancy relating to
units available to let is 2.6 per cent. Investment properties held within the
joint venture at Lillie Square totalling £43.7 million (our share) (31
December 2023: £182.2 million (our share of Lillie Square and Longmartin)) is
not included in the vacancy rate above.
3. Property related capex
2024 2023(1)
Group (excluding joint ventures and associates) Joint ventures and associates Total Group Group (excluding Joint ventures and associates Total Group
£m £m £m joint ventures and associates) £m £m
£m
Acquisitions 84.9 - 84.9 17.4 - 17.4
Development - 0.2 0.2 - 0.8 0.8
Investment property
Incremental lettable space 2.0 - 2.0 5.1 - 5.1
No incremental lettable space 38.3 0.8 39.1 28.5 0.5 29.0
Tenant lease incentives 2.8 - 2.8 1.5 0.3 1.8
Total CapEx 128.0 1.0 129.0 52.5 1.6 54.1
Conversion from accrual to cash basis 2.4 - 2.4 (1.3) 1.0 (0.3)
Total CapEx on cash basis 130.4 1.0 131.4 51.2 2.6 53.8
1. The property-related capex represents
the standalone performance of Capital & Counties Properties PLC for the
period 1 January to 5 March 2023 and that of the Group from 6 March 2023 to 31
December 2023.
4. EPRA LTV (Loan-to-Value)
2024
Group Share of joint ventures and associates Total
£m
£m
£m
Borrowings from financial institutions (1,239.8) - (1,239.8)
Exchangeable bond (275.0) - (275.0)
Exclude:
Cash and cash equivalents(1) 124.0 4.9 128.9
EPRA net debt (B) (1,390.8) 4.9 (1,385.9)
Investment property at fair value 4,943.6 43.7 4,987.3
Owner occupied property at fair value 20.1 - 20.1
Properties held for sale at fair value 9.8 - 9.8
Properties under development - 21.6 21.6
Net receivables 85.5 (61.5) 24.0
Total property value (A) 5,059.0 3.8 5,062.8
EPRA LTV (B/A) 27.4%
1. Includes tenant deposits of £14.2
million held as security against tenant rent payments which are subject to
certain restrictions and therefore not available for general use by the Group.
2023
Group Share of joint ventures and associates Total
£m
£m
£m
Borrowings from financial institutions (1,409.8) (60.0) (1,469.8)
Exchangeable bond (275.0) - (275.0)
Net payables 62.6 (80.4) (17.8)
Exclude:
Cash and cash equivalents(1) 200.2 9.9 210.1
Net debt (B) (1,422.0) (130.5) (1,552.5)
Investment property at fair value 4,775.1 182.2 4,957.3
Owner occupied property at fair value 20.2 - 20.2
Properties under development - 41.8 41.8
Total property value (A) 4,795.3 224.0 5,019.3
EPRA LTV (B/A) 30.9%
1. Includes tenant deposits of £14.5
million held as security against tenant payments which are subject to certain
restrictions and therefore not available for general use by the Group.
5. EPRA cost ratio
2024 2023
£m
£m
Administrative expenses(1) 42.7 83.8
Total property outgoings 56.1 51.2
Provision for expected credit loss 3.9 2.0
Less: Service charge expense (22.1) (19.3)
Management fee (0.1) (0.1)
Share of joint ventures and associates expenses 2.9 3.5
Exclude:
Ground rent cost (0.4) (0.8)
EPRA Cost (including direct vacancy costs) (A) 83.0 120.3
Direct vacancy costs (8.6) (8.9)
EPRA Costs (excluding direct vacancy costs) (B) 74.4 111.4
Gross Rental Income less ground rent costs 226.7 194.3
Less: Service charge income (22.1) (19.3)
Share of joint ventures and associates property income 8.8 8.3
Adjusted gross rental income (C) 213.4 183.3
EPRA Cost Ratio (including direct vacancy costs) (A/C) 38.9% 65.6%
EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 34.9% 60.8%
Company specific adjustments(2):
Non-underlying administrative expenses (3.3) (44.5)
Impact of change in accounting policy on property outgoings - (1.0)
Company specific adjustments for costs (D) (3.3) (45.5)
Adjusted Company Cost (including direct vacancy costs) (E = A+D) 79.7 74.8
Adjusted Company Cost (excluding direct vacancy costs) (F = B+D) 71.1 65.9
Impact of change in accounting policy on rental income(2) - 4.1
Adjusted Company gross rental income (G) 213.4 187.4
Adjusted Company Cost Ratio (including direct vacancy costs) (E/G) 37.3% 39.9%
Adjusted Company Cost Ratio (excluding direct vacancy costs) (F/G) 33.3% 35.2%
1. £0.7 million (2023: £0.3 million)
of administrative expenses were capitalised during the year. These capitalised
costs mainly relate to employee costs as it is the Group's policy to
capitalise directly attributable overheads and operating expenses to assets
under refurbishment or development.
2. Company specific adjustment relates
to non-underlying administrative expenses and do not represent the recurring,
underlying performance of the Group. Details of non-underlying expenses are
set out in note 5 'Administration expenses'. The prior year company specific
adjustments include an adjustment relating to the alignment of accounting
policies on completion of the merger. £4.1 million of the adjustment was
recognised through the straight lining of tenant lease incentives and £1.0
million in property expenses.
6. Like-for-like rental growth
The like-for-like rental growth presented represents 100 per cent of the
wholly owned property portfolio, where all assets are located in the West End
of London.
2024 Pro-forma
£m
2023
£m
Rental income in current year 205.0 196.5
Adjusted for impact of:
Acquisitions (2.8) (0.4)
Disposals (2.9) (4.1)
Change in accounting policy(1) - 4.1
Like-for-like rental income in current year (A) 199.3 196.1
Rental income in previous year 196.5 178.2
Adjusted for impact of:
Acquisitions - (0.1)
Disposals (12.1) (4.8)
Change in accounting policy(1) 4.1 -
Like-for-like rental income in prior year (B) 188.5 173.3
Like-for-like growth in rental income ((A-B)/B) 5.7% 13.2%
1. There was a £4.1 million reduction
to 2023 straight-lining of tenant lease incentives as a result of the
alignment of accounting policies following the merger
Rental income for the year ended 31 December 2023 used within the like-for
like rental growth calculation above, has been determined based on pro forma
information. The table below summarises the pro forma information.
Shaftesbury Capital PLC 31 December 2023(1) Shaftesbury PLC Pro forma
£m 1 January to 5 March 2023(2) 2023
£m
£m
Rent receivable 171.9 21.2 193.1
Straight-lining of tenant lease incentives 3.9 (0.5) 3.4
Rental income 175.8 20.7 196.5
1. As reported in note 4 'Gross profit'.
Represents the standalone results of Capital & Counties Properties PLC for
1 January to 5 March 2023 and that of the Group from 6 March to 31 December
2023.
2. Reflects the rental income for
Shaftesbury PLC for the period 1 January to 5 March 2023 obtained from
internal management accounts of Shaftesbury PLC. The amounts have not been
adjusted for accounting policy alignments or fair value adjustments.
Analysis of property portfolio
For the year ended 31 December 2024
Wholly-owned portfolio valuation by use
Portfolio by use as at 31 December 2024 Retail Food & Offices Commercial Residential Wholly-owned
beverage portfolio
Valuation (£m)(1) 1,784.2 1,664.8 877.9 4,326.9 644.7 4,971.6
Valuation (%) 36% 33% 18% 87% 13% 100%
L-f-L valuation movement (FY 2024) +7.5% +4.7% +3.1% +5.5% -1.6% +4.5%
L-f-L valuation movement (H2 2024) +6.5% +2.2% +1.2% +3.7% -1.0% +3.1%
Annualised gross income (£m) 73.2 73.0 33.6 179.8 23.0 202.8
Annualised gross income (%) 36% 36% 17% 89% 11% 100%
L-f-L annualised gross income growth (FY 2024) +9.1% +4.2% +18.3% +8.6% +3.9% +8.0%
L-f-L annualised gross income growth (H2 2024) +5.3% - +12.0% +4.2% +2.9% +4.1%
ERV (£m) 90.2 85.0 50.5 225.7 24.9 250.6
ERV (%) 36% 34% 20% 90% 10% 100%
L-f-L ERV movement (FY 2024) +11.2% +7.2% +6.1% +8.4% +1.4% +7.7%
L-f-L ERV movement (H2 2024) +8.8% +3.4% +1.5% +5.0% +1.6% +4.7%
ERV psf (£) 126 91 79 98 60 92
Net initial yield 3.8% 4.0% 3.3% 3.8% 2.9% 3.6%
Topped up net initial yield 4.0% 4.3% 3.8% 4.1% N/A 3.9%
Equivalent yield 4.5% 4.7% 4.9% 4.6% 3.1% 4.4%
WAULT 3.0 8.1 2.7 4.8 1.1 4.4
Floor Area (sq ft m)(2) 0.7 1.0 0.6 2.3 0.4 2.7
Unit Count(2) 415 394 404 1,213 656 1,869
1. Excludes £1.9 million of Group
properties primarily held in Lillie Square Holdings (a wholly-owned
subsidiary).
2. Excluding long-leasehold residential
interests.
Wholly-owned portfolio valuation by location
Portfolio by location as at 31 December 2024 Covent Garden Carnaby | Soho Chinatown Fitzrovia Wholly-owned portfolio
Valuation (£m)(1) 2,652.7 1,597.1 716.3 5.5 4,971.6
Valuation (%) 53% 32% 15% - 100%
L-f-L valuation movement (FY 2024) +3.7% +6.4% +3.7% -7.1% +4.5%
L-f-L valuation movement (H2 2024) +2.8% +4.3% +2.0% -6.1% +3.1%
Annualised gross income (£m) 104.3 66.2 32.0 0.3 202.8
Annualised gross income (%) 51% 33% 16% - 100%
L-f-L annualised gross income growth (FY 2024) +7.2% +12.1% +2.8% -5.3% +8.0%
L-f-L annualised gross income growth (H2 2024) +2.7% +8.4% +0.4% -6.0% +4.1%
ERV (£m) 134.0 81.9 34.4 0.3 250.6
ERV (%) 53% 33% 14% - 100%
L-f-L ERV movement (FY 2024) +9.1% +7.1% +4.1% - +7.7%
L-f-L ERV movement (H2 2024) +5.5% +4.5% +2.0% - +4.7%
ERV psf (£) 96 92 81 58 92
Net initial yield 3.6% 3.6% 4.0% 5.0% 3.6%
Topped up net initial yield 3.8% 4.0% 4.1% 5.0% 3.9%
Equivalent yield 4.5% 4.5% 4.3% 4.4% 4.4%
WAULT 4.4 4.0 5.6 6.1 4.4
Floor Area (sq ft m)(2) 1.4 0.9 0.4 - 2.7
Unit Count(2) 853 660 350 6 1,869
1. Excludes £1.9 million of Group
properties primarily held in Lillie Square Holdings (a wholly-owned
subsidiary).
2. Excluding long-leasehold residential
interests.
DIVIDENDS
The Directors of Shaftesbury Capital PLC have proposed a final cash dividend
of 1.8 pence per ordinary share (ISIN GB00B62G9D36) payable on Friday, 30 May
2025.
Dates
The following are the salient dates for the payment of the proposed 2024 final
cash dividend:
Proposed 2024 final dividend announced Thursday, 27 February 2025
Sterling/Rand exchange rate struck Wednesday, 9 April 2025
Sterling/Rand exchange rate and dividend amount in Rand announced by 11.00 am Thursday, 10 April 2025
(South Africa time)
Last day to trade cum-dividend* Tuesday, 22 April 2025
Ordinary shares listed ex-dividend on the Johannesburg Stock Exchange Wednesday, 23 April 2025
Ordinary shares listed ex-dividend on the London Stock Exchange Thursday, 24 April 2025
Record date for the 2024 final dividend in UK and South Africa Friday, 25 April 2025
Deadline for submission of declaration of eligibility to receive gross PID Friday, 25 April 2025 (COB)
payment to UK registrar
Annual General Meeting Thursday, 22 May 2025
Dividend payment date for shareholders Friday, 30 May 2025
The proposed 2024 final cash dividend is subject to approval at the Company's
Annual General Meeting, to be held on Thursday, 22 May 2025.
* South African shareholders should note that, in accordance with the
requirements of Strate, the last day to trade cum-dividend on the Johannesburg
Stock Exchange will be Tuesday, 22 April 2025. No dematerialisation or
rematerialisation of shares will be possible from Wednesday, 23 April 2025 to
Friday, 25 April 2025 inclusive. No transfers between the UK and South African
registers may take place from close of business on Thursday, 10 April 2025 to
Friday, 25 April 2025 inclusive.
The above dates are proposed and subject to change.
The proposed 2024 final cash dividend will be paid wholly as a Property Income
Distribution ("PID"). There will be no Non-PID (ordinary dividend) element of
the final cash dividend. As such, the entire final cash dividend will be
subject to a deduction of a 20 per cent UK withholding tax unless exemptions
apply.
Information for shareholders
The information below is included only as a general guide to taxation for
shareholders based on Shaftesbury Capital's understanding of the law and the
practice currently in force. Any shareholder who is in any doubt as to their
tax position should seek independent professional advice.
UK shareholders
The proposed 2024 final cash dividend will be paid wholly as a PID. Certain
categories of shareholders may be eligible for exemption from the 20 per cent
UK withholding tax and may register to receive their dividends on a gross
basis. Further information, including the required forms, is available from
the 'Investor Information' section of the Company's website
(https://www.shaftesburycapital.com/en/investors/investor-information.html
(https://www.shaftesburycapital.com/en/investors/investor-information.html) ),
or on request from the Company's UK registrar, MUFG Corporate Markets. Validly
completed forms must be received by MUFG Corporate Markets no later than the
dividend record date, as advised; otherwise the dividend will be paid after
deduction of tax.
There will be no Non-PID element of the final cash dividend.
South African shareholders
The proposed 2024 final cash dividend proposed by the Company is a foreign
payment and the funds are sourced from the UK.
PID: The proposed 2024 final cash dividend will be paid wholly as a PID and a
20 per cent UK withholding tax is applicable to a PID. As such, South African
shareholders may apply to HMRC after payment of the proposed 2024 final cash
dividend for a refund of the difference between the 20 per cent UK withholding
tax and the UK/South African double taxation treaty rate of 15 per cent.
The proposed 2024 final cash dividend will be exempt from income tax but will
constitute a dividend for Dividends Tax purposes, as it will be declared in
respect of a share listed on the exchange operated by the JSE. SA Dividends
Tax will therefore be withheld from the proposed 2024 final cash dividend at a
rate of 20 per cent, unless a shareholder qualifies for an exemption and the
prescribed requirements for effecting the exemption are in place by the
requisite date. Certain shareholders may also qualify for a reduction of SA
Dividends Tax liability to 5 per cent (being the difference between the SA
dividends tax rate and the effective UK withholding tax rate of 15 per cent)
if the prescribed requirements for effecting the reduction are in place by the
requisite date.
Non-PID: There will be no Non-PID element of the proposed 2024 final cash
dividend.
Other overseas shareholders
Other non-UK shareholders may be able to make claims for a refund of UK
withholding tax deducted pursuant to the application of a relevant double
taxation convention. UK withholding tax refunds can only be claimed from HMRC,
the UK tax authority.
Additional information on PIDs and ordinary dividends (Non-PIDs) can be found
at
https://www.shaftesburycapital.com/en/investors/investor-information/reit.html
(https://www.shaftesburycapital.com/en/investors/investor-information/reit.html)
Cash dividends paid directly to bank or building society account
Cash dividend payments made by the Company, including the final dividend of
1.8 pence per ordinary share subject to shareholder approval at the 2025
Annual General Meeting, will now only be paid by electronic means. The Company
will no longer be issuing payments by cheque. To receive cash dividends,
shareholders must ensure that they have registered their bank/building society
details with the appropriate registrar. Visit the dividend information section
of our website for more details
(https://www.shaftesburycapital.com/en/investors/investor-information/dividend-information.html
(https://www.shaftesburycapital.com/en/investors/investor-information/dividend-information.html)
).
GLOSSARY
Annualised gross income
Total annualised actual and "estimated income" from leases at a valuation
date. It includes sundry non-leased income and estimated turnover related
rents. No rent is attributed to leases which were subject to rent free periods
at that date. It does not reflect any head rents and estimated irrecoverable
outgoings at the valuation date. "Estimated income" refers to gross ERVs in
respect of rent reviews outstanding at the valuation date and, where
appropriate, ERV in respect of lease renewals outstanding at the valuation
date where the fair value reflects terms for a renewed lease.
APM (Alternative Performance Measure)
A financial measure of historical or future financial performance, position or
cash flows of the Group which is not a measure defined or specified in IFRS.
Capco
Capco represents Shaftesbury Capital PLC, formerly Capital & Counties
Properties PLC, (also referred to as "the Company") and all its subsidiaries
and group undertakings, collectively referred to as "the Group".
Cash and undrawn committed facilities
Cash and cash equivalents, excluding tenant deposits, plus undrawn committed
facilities.
Category A (Cat A)
A Category A (Cat A) office refurbishment refers to the basic fit-out of an
office space, typically including essential infrastructure such as raised
floors, suspended ceilings, lighting, air conditioning, and basic fire and
safety systems. This level of refurbishment prepares the space for tenant
occupation but does not include interior design elements, partitions, or
bespoke fittings.
Contracted income
Includes rent frees and contracted rent increases.
CRREM
Carbon Risk Real Estate Monitor. The leasing global standard and initiative
for operational decarbonisation of real estate assets.
EBITDA
EBITDA represents underlying earnings before interest, tax, depreciation and
amortisation.
EPC (Energy Performance Certificate)
An asset rating setting out how energy efficient a building is, rated by its
carbon dioxide emission on a scale of A to G, with A being the most energy
efficient.
EPRA
European Public Real Estate Association, the publisher of Best Practice
Recommendations intended to make financial statements of public real estate
companies in Europe clearer, more transparent and comparable.
EPRA cost ratio (including direct vacancy costs)
EPRA cost ratio (including direct vacancy costs) is a proportionally
consolidated measure of the ratio of net overheads and operating expenses
against gross rental income (with both amounts excluding ground rents
payable). Net overheads and operating expenses relate to all administrative
and operating expenses, net of any service fees, recharges or other income
specifically intended to cover overhead and property expenses.
EPRA cost ratio (excluding direct vacancy costs)
EPRA cost ratio (excluding direct vacancy costs) is the ratio defined above,
but with direct vacancy costs removed from the net overheads and operating
expenses balance.
EPRA earnings per share
Profit or loss for the year excluding valuation movements on the wholly-owned,
joint venture and associate properties, fair value changes of financial
instruments and listed investments, cost of early close out of debt, gain on
bargain purchase and IFRS 3 merger-related transaction costs, and unlikely to
reoccur in the foreseeable future, divided by the weighted average number of
shares in issue during the year.
EPRA LTV (loan-to-value)
Ratio of net debt, including net payables, to the sum of the net assets,
including net receivables, of the Group, its subsidiaries and joint ventures
and associates, all on a proportionate basis, expressed as a percentage. The
calculation includes trading properties at fair value and debt at nominal
value.
EPRA NDV (net disposal value) per share
The net assets as at the end of the year including the excess of the fair
value of trading property over its cost, revaluation of other non-current
investments and the fair value of fixed interest rate debt over their carrying
value, divided by the diluted number of ordinary shares.
EPRA net initial yield
Annualised net rent (after deduction of revenue costs such as head rent,
running void, service charge after shortfalls and empty rates) on investment
and development property expressed as a percentage of the gross market value
before deduction of theoretical acquisition costs.
EPRA NTA (net tangible assets) per share
The net assets as at the end of the year including the excess of the fair
value of trading property over its cost and revaluation of other non-current
investments, excluding the fair value of financial instruments and deferred
tax on revaluations, divided by the diluted number of ordinary shares.
EPRA NRV (net reinstatement value) per share
The net assets as at the end of the year including the excess of the fair
value of trading property over its cost and excluding the fair value of
financial instruments, deferred tax on revaluations and diluting for the
effect of those shares potentially issuable under employee share schemes plus
a gross up adjustment for related costs such as Real Estate Transfer Tax,
divided by the diluted number of ordinary shares.
EPRA topped-up initial yield
EPRA net initial yield adjusted for the expiration of rent-free periods.
EPRA vacancy
ERV of un-let units, including those under offer, expressed as a percentage of
the ERV of the wholly-owned property portfolio
excluding units under development.
ERV (Estimated rental value)
The external valuers' estimate of the open market rent which, on the date of
valuation, could reasonably be expected to be obtained on a new letting or
rent review of the property.
F&B (Food & Beverage)
A sector within the portfolio which includes establishments primarily engaged
in the preparation and sale of food and beverages. This encompasses a diverse
range of customers including restaurants, cafés, bars, pubs and other
hospitality venues.
Headline earnings per share
Headline earnings per share is calculated in accordance with Circular 1/2023
issued by the South African Institute of Chartered Accountants ("SAICA"), a
requirement of the Group's JSE listing. This measure is not a requirement of
IFRS.
Leasing activity
The rental value secured from lettings, rent reviews and lease renewals during
a year.
Like-for-like property
Property which has been owned throughout both years, without significant
capital expenditure in either period, so income can be compared on a
like-for-like basis. For the purposes of comparison of capital values, this
will also include assets owned at the previous balance sheet date but not
necessarily throughout the prior year.
LTV (Loan-to-value)
LTV is calculated on the basis of net debt divided by the market value of the
wholly owned property portfolio.
Longmartin
Longmartin Properties Limited is a 50 per cent associate between the Group and
The Mercers' Company. The Group disposed of its share in Longmartin during the
year.
LSJV
The Lillie Square joint venture is a 50 per cent joint venture between the
Group and Kwok Family Interests (KFI). The joint venture was established to
own, manage and develop land interests at Lillie Square.
MSCI
Producer of an independent benchmark of property returns.
NAV
Net Asset Value.
Net initial yield
The net initial income at the valuation date expressed as a percentage of the
gross valuation. Yields reflect net income after deduction of any ground
rents, head rents and rent charges and estimated irrecoverable outgoings at
the valuation date.
Net debt
Total borrowings, at nominal value, less cash and cash equivalents, excluding
tenant deposits.
NRI (Net rental income)
Gross rental income less ground rents, payable service charge expenses and
other non-recoverable charges, having taken due account of expected credit
loss provisions and adjustments to comply with International Financial
Reporting Standards regarding tenant lease incentives.
Nominal equivalent yield
Effective annual yield to a purchaser on the gross market value, assuming rent
is receivable annually in arrears, and that the property becomes fully
occupied and that all rents revert to the current market level (ERV) at the
next review date or lease expiry.
Passing rent
Contracted annual rents receivable at the balance sheet date. This takes no
account of accounting adjustments made in respect of rent-free periods or
tenant lease incentives, the reclassification of certain lease payments as
finance charges or any irrecoverable costs and expenses, and does not include
excess turnover rent, additional rent in respect of unsettled rent reviews or
sundry income.
PIDs (Property income distributions)
Distribution under the REIT regime that constitutes at least 90 per cent of
the Group's taxable income profits arising from its qualifying property rental
business, by way of dividend. PIDs can be subject to withholding tax at 20 per
cent. If the Group distributes profits from its non-qualifying business, the
distribution will be taxed as an ordinary dividend in the hands of the
investors.
Private placement loan notes interest cover
Interest cover is calculated based on net rental income, less an
administration adjustment of £5.0 million, divided by net finance costs.
Private placement loan notes LTV
LTV is calculated on the basis of net debt divided by the market value of
wholly owned property portfolio. This measure is consistent with the LTV ratio
disclosed in 'Alternative performance measures' table.
REIT (Real Estate Investment Trust)
A REIT is exempt from corporation tax on income and gains of its property
rental business (qualifying activities) provided a number of conditions are
met. It remains subject to corporation tax on non-exempt income and gains
(non-qualifying activities) which would include any trading activity, interest
income and development and management fee income.
RETT (Real Estate Transfer Tax)
Purchasers' cost as included within the independent valuation of investment
and trading properties.
Reversionary potential
The amount by which ERV exceeds annualised gross income, measured at a
valuation date.
RICS
Royal Institution of Chartered Surveyors.
SBTi
Science Based Targets initiative.
Secured loans interest cover
Interest cover is calculated based on net rental income of the company which
holds the loan divided by net finance costs associated with the secured loan
Secured loans LTV
LTV is calculated based on the secured loan balance outstanding divided by the
market value of specified properties.
Shaftesbury Capital
With effect from 6 March 2023, Capital & Counties Properties PLC changed
its name to Shaftesbury Capital PLC (also referred to as "the Company" or
"Shaftesbury Capital"), and all its subsidiaries and Group undertakings,
collectively referred to as "the Group".
SONIA (Sterling Overnight Interbank Average Rate)
The average overnight Sterling risk-free interest rate, set in arrear, paid by
banks for unsecured transactions.
Tenant lease incentives
Any incentives offered to customers to enter into a lease. Typically,
incentives are in the form of an initial rent-free period and/or a cash
contribution to fit-out the premises. Under IFRS the value of incentives
granted to customers are amortised through the consolidated statement of
comprehensive income on a straight-line basis to the earlier of break or lease
expiry.
Topped-up net initial yield
Net initial yield adjusted for the expiration of rent-free periods.
TAR (Total accounting return)
The movement in EPRA NTA per share plus dividends per share paid during the
year.
TPR (Total property return)
Capital growth including gains and losses on disposals plus rent received less
associated costs, including ground rent.
TSR (Total shareholder return)
The movement in the price of an ordinary share plus dividends paid during the
year assuming re-investment in ordinary shares.
Underlying administrative costs
Administrative expenses excluding merger-related transaction and integration
costs and non-underlying administrative expenses. The items are excluded as
considered to be non-recurring or significant by virtue of size and nature.
Underlying earnings
EPRA earnings adjusted for the non-core property rental income business. The
Lillie Square joint venture is not considered part of the core underlying
business of the Group and therefore its results are excluded from underlying
earnings.
Underlying earnings per share (EPS)
Underlying earnings divided by the weighted average number of shares in issue
during the year.
Unsecured term & revolving loan facilities interest cover
Interest cover is calculated based on net rental income divided by net finance
costs.
Unsecured term & revolving loan facilities LTV
LTV is calculated on the basis of net debt divided by the market value of
wholly owned property portfolio. This measure is consistent with the LTV ratio
disclosed in 'Alternative performance measures' table
Valuation growth/decline
The valuation movement and realised surpluses or deficits arising from the
Group's investment property portfolio expressed as a percentage return on the
valuation at the beginning of the year adjusted for acquisitions, disposals
and capital expenditure. When measured on a like-for-like basis, the
calculation excludes those properties acquired or sold during the year.
Weighted average cost of debt - gross
The cost of debt weighted by the drawn balance of external borrowings.
Weighted average cost of debt - net
The cost of debt weighted by the drawn balance of external borrowings, taking
account of interest on cash deposits and interest rate caps and collars.
WAULT (Weighted average unexpired lease term)
The unexpired lease term to the earlier of break or lease expiry weighted by
passing rent for each lease.
Zone A
A means of analysing and comparing the rental value of retail space by
dividing it in to zones parallel with the main frontage. The most valuable
zone, Zone A, falls within a 6 metre depth of the shop frontage. Each
successive zone is valued at half the rate of the zone in front of it. The
blend is referred to as being 'ITZA' ("In Terms of Zone A").
Important notices
This press release contains "forward-looking statements" regarding the belief
or current expectations of Shaftesbury Capital PLC, its Directors and other
members of its senior management about Shaftesbury Capital PLC's businesses,
financial performance and results of operations. These forward-looking
statements are not guarantees of future performance. Rather, they are based on
current views and assumptions and involve known and unknown risks,
uncertainties and other factors, many of which are outside the control of
Shaftesbury Capital PLC and are difficult to predict, that may cause actual
results, performance or developments to differ materially from any future
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