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WORKSPACE GROUP PLC

WORKSPACE GROUP PLC. Preliminary Results For the year ended 31 March 2005. Headline results. Valuation Surplus £67m 10.4% Total Property Valuation £718m Up 14.3% Net Asset Value per share £2.24 Up 21.7% Turnover £55.0m Up 7.8% Trading pre-tax profit £14.5m Up 2.6%

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WORKSPACE GROUP PLC

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  1. WORKSPACE GROUP PLC Preliminary Results For the year ended 31 March 2005

  2. Headline results • Valuation Surplus £67m 10.4% • Total Property Valuation £718m Up 14.3% • Net Asset Value per share £2.24 Up 21.7% • Turnover £55.0m Up 7.8% • Trading pre-tax profit £14.5m Up 2.6% • Trading EPS per share 6.3p Up 3.3% • Profit before Tax £14.4m Down 4.7% • Annual Rent Roll £42.3m Up 11% • Gearing 88% • Dividend 3.41p Up 10%

  3. Ten Year Results Five Year Ten Year Compound Growth Compound Growth Trading PBT 11.7% 19.6% Trading EPS 9.5% 12.1% Dividend per share 10.2% 13.1% Net Assets (per share) 19.9% 21.6% Property at Valuation 18.7% 24.2%

  4. The Business – A Simple Model • To achieve profit and capital growth from: • Providing workspace to SMEs • Investing in properties with potential • - Income growth • - Capital growth • - Alternative use • Increasing scale of portfolio, spreading overheads and • developing the brand • The right financial platform

  5. Our Business – A Reminder • “ We provide affordable, flexible space for new and small businesses in London and the South East ” • c.4,000 customers over 103 estates; 5.2 million sq .ft • Over 7,700 enquiries a year; market leading brand in • fragmented market • A simple product offer • Superior service from in-house management • Customer focused

  6. Customer Profile Typical Workspace tenant: Rent under 5% of turnover Source: Kingston University survey of over 200 customers. Spring 2004

  7. Total Percentage of Customers by DTI Categories

  8. Trading: Occupancy & Rents • Continuing occupancy improvements • 31 March - core occupancy 90.5% • - overall occupancy 88.3% • - 46% estates at occupancy of 95%+ • 7,764 enquiries in year; 1,012 lettings • Occupancy improving at Barley Mow and Quality Court • Like-for-like average rents up 2.9% (from £8.57 to £8,82) • Rolling rent review/lease renewals programme on 5.8% opening rent roll secured 16.7% uplift on previous passing rentals

  9. Acquisitions & Disposals Disposals Hooley Lane, Redhill Union Street Sites, SE1 Three Mills, E3 £34.8m 2.5% Acquisitions Quadrangle, Fulham, SW6 Southbank House, SE1 Southgate Office Village, N14 Chiswick Studios, W4 Lombard House, Croydon Lewis House, Park Royal, NW10 Homesdale Business Centre, Bromley Total £43.4m Net Yield 7.3%

  10. Recent Acquisitions The Quadrangle, SW6 Chiswick Studios, W4 Southgate Office Village, N14 Homesdale Business Centre, Bromley Southbank House, SE1 Lombard House, Croydon

  11. Progress on Major Refurbishments

  12. Progress on Adding Value: Changes of Use • Wharf Road Planning consent achieved. Replacement of 43,000 sq. ft business centre with 77 residential units and new 32,500 sq. ft business centre • Thurston Road 46,400 sq. ft industrial estate to be replaced by 75,000 sq. ft retail warehouse and up to 290 residential units • Aberdeen Studios Planning application in for replacement of existing centre 65,000 sq. ft and up to 96 residential units • Greenheath Planning consent being sought for replacement of existing business centre and 100 residential units • Longer Term Work

  13. 2005 Results: P & L Account

  14. 2005 Results: Balance Sheet Immediate Investment Capacity = £49.2m (Gearing 102%) (£115.6m to 120%)

  15. Key Elements on Valuation • Income up 4.1%, ERV up 3.3% (like-for-like) • ERV £57.6m; 90% ERV = £51.8m; Current net rental income £42.3m • Net initial yield 5.9%, reversionary yield 8.0%, equivalent yield 7.1% • Valuation surplus after £14.3m impact of stamp duty change • Valuation surplus: 40% rent, 60% yield • Capital value £139 per sq. ft

  16. IPD Performance

  17. Benchmarks Performance

  18. International Financial Reporting Standards • First impacts annual accounts to 31 March 2006 • Continued quarterly reporting • Q1 August – External Valuation • Impact on EPS and NAV computations (deferred tax, valuation surpluses, financial instruments)

  19. REITs • Origin of Group – earnings focus with high dividend distribution. • On right terms, Group may fit into a REIT environment. • Recent consultation document - thoughts

  20. Looking Forward: The Same Business Model • As stated September 2003 • - 5% per annum rental increases • - No movement in yields/occupancy • - Conservative gearing • - Annual investment £50m - £60m • Aim: - Doubling value in 5 years to September 2008 - £1bn portfolio • On track

  21. Looking Forward: Occupancy and Rents • SME confidence • The London Economy • Short and Longer Term • See: Investor Relations/Company Presentations • section of www.workspacegroup.co.uk

  22. Recent Trends - Starts During 2004, London & South East continue to lead the way in business starts Source: Barclays ‘Starts and Closures’ 2004

  23. Recent Trends – Starts (2) Rise in starts across the Capital during 2004,Though down slightly across the South East Source: Barclays ‘Starts and Closures’ 2004

  24. SME Prospects Expected change during first quarter of 2005(Q1 2005 on Q4 2004) Source: SERT, ‘Quarterly Survey of Small Businesses in Britain’, Q1 2005

  25. Other Longer Term Features • Olympics – decision 6 July • Regeneration Areas • Infrastructure Improvements: Crossrail, East London Line. • Tracking of acquisition targets – our database • Stepping up the added value programme – 45% of estates

  26. Priorities and Performance Performance Priorities Deliver enhanced shareholder value NAV up 21.7%, EPS up 3.3%, TSR 34% per annum over last 5 years To improve occupancy to 90% Occupancy 90% To continue with a further £60m acquisitions in a year Acquisitions - £43m / Disposals - £35m Continue to identify and implement added value schemes Planning/sale achieved: Hooley/Union St Planning achieved: Wharf Road Good Planning Progress: Aberdeen, Thurston Road Strengthen brand awareness as Leader in marketplace Re-launch of Group website, continued link with Kingston University. 7,764 enquiries, 1,012 new lettings

  27. Summary • Good enquiry levels; occupancy high and robust • Rental focus in 2005/06 • Added value programme gaining momentum • Business plan on target • Growth opportunities Workspace – Leader in a Growing Marketplace

  28. APPENDIX

  29. Total Shareholder Return

  30. 5 Year Share Price

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