Capital & Counties Properties plc (JSE:CCO) News - Audited preliminary results for the year ended 31 December 2021

Capital & Counties Properties PLC
Incorporated and registered in the United Kingdom and
Wales with registration Number 07145041 and registered in
South Africa as an external company with Registration
Number 2010/003387/10)
JSE code: CCO
ISIN: GB00B62G9D36

23 FEBRUARY 2022
CAPITAL & COUNTIES PROPERTIES PLC (“CAPCO”)

AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021


Covent Garden recovery underway, returning to growth

Ian Hawksworth, Chief Executive of Capco, commented:
“We are pleased with the strong level of leasing demand for Covent Garden which has
contributed to a valuation uplift in the second half. With footfall continuing to
increase, customer sales approaching 2019 levels and our creative approach, Covent
Garden is the most vibrant district in the West End and is well-positioned for
further rental growth.

Capco has a strong balance sheet, enabling us to further invest in our estate to
accelerate value creation as well as take advantage of market opportunities. We look
ahead with confidence to continued progress in 2022 to generate long-term returns for
shareholders from our unique portfolio of West End investments.”

Key financials

-   Total equity of £1.8 billion (2020: £1.8 billion)
-   EPRA NTA 212.4 pence per share (2020: 212.1 pence per share)
-   Total property return 1.5 per cent (2020: -24.4 per cent)
-   Total shareholder return 16.5 per cent (2020: -44.3 per cent)
-   Total property value £1.8 billion, a decrease of 1.3 per cent (like-for-like)
    (2020: £1.9 billion)
-   Group net debt to gross assets ratio of 24 per cent (2020: 28 per cent)
-   Underlying net rental income increased to £52.3 million (Dec 2020: £43.6 million)
-   Underlying earnings per share 0.5 pence (2020: -0.7 pence per share)
-   Proposed final 2021 dividend of 1.0 pence per share resulting in a full-year
    dividend of 1.5 pence per share

Covent Garden portfolio valuation growth in H2 2021

-   The independent property valuation of Covent Garden was £1.7 billion, representing
    a like-for-like increase of 4.6 per cent in the second half of the year and an
    overall movement of -0.6 per cent for the full year (2020: £1.7 billion)
-   The second half movement was driven by an increase of 3 per cent in ERV on a like-
    for-like basis as well as a reduction in the equivalent yield of 5 basis points on
    a like-for-like basis to 3.88 per cent
-   The valuer’s assumption on loss of near-term income has been reduced from £11
    million at 30 June 2021 to £nil
-   Realised proceeds from the sale of Covent Garden assets totalling £95 million
    (before costs)

Strong leasing momentum driving rental growth

-   60 new leases and renewals were agreed representing £11 million contracted income,
    in line with previous passing rents
-   H2 2021 leasing transactions representing £5 million income, slightly ahead of
    June 2021 ERV
-   Positive start to 2022, leasing pipeline with £3.8 million of income under offer
-   Leasing success with our targeted categories including new signings from TAG
    Heuer, Glossier and Uniqlo
-   Creative asset management unlocking value and enhancing sustainability profile of
    the assets
-   EPRA vacancy at 2.6 per cent (Dec 2020: 3.5 per cent)
-   14 new openings across the estate including Glossier, Ave Mario and 3 Henrietta
    Street
-   Overall customer sales for the second half of 2021 approaching 2019 levels, with
    certain categories including premium and luxury outperforming
-   Improving rent collections with 92 per cent of December 2021 to March 2022 quarter
    collected, 75 per cent of 2021 rents collected (adjusted for monthly payment
    plans) (2020: 68 per cent)
-   Pedestrianisation of key streets extended; al fresco dining providing over 1,000
    covers in total
-   Innovative cultural programme; digital growth and engagement, public art
    installations and global brand partnerships driving footfall and spend
Delivering environmental and social value

-   Detailed pathway to Net Zero Carbon by 2030 published
-   Improving EPC ratings across the estate through incremental refurbishment
-   Commitment to enhancing air quality with continued pedestrianisation of streets
    around the Piazza
-   Customer engagement programme on carbon, water and waste, intending to reduce
    environmental impact
-   Partnership with the Wild West End, a charitable partnership which aims to enhance
    the quality of green space and the local environment
-   Employee survey completed with high levels of engagement reported
-   Support provided to homelessness charities, local food banks and the elderly as
    well as hospitality, retail and cultural foundations
-   Oversight of Environment, Sustainability and Community (“ESC”) strategy by Board
    Committee

Other investments

-   Investment in Shaftesbury PLC valued at £596 million (Dec 2020: £552 million),
    compared with a £501 million acquisition cost; dividend income of £2.3 million in
    July 2021 and £3.9 million since year-end
-   Lillie Square property value of £86 million (Capco share), a decrease of 14.1 per
    cent (like-for-like) since 31 December 2020. Joint venture net cash position £44.6
    million (£22.3 million Capco share)
-   Final £15 million of deferred consideration from the Earls Court sale received in
    November 2021

Strong balance sheet and significant financial flexibility

-   Covent Garden net debt of £254 million (Dec 2020: £352 million) and loan to value
    ratio of 15 per cent (Dec 2020: 19 per cent)
-   Group net debt of £599 million (Dec 2020: £710 million) and net debt to gross
    assets of 24 per cent (Dec 2020: 28 per cent)
-   Access to Group liquidity comprising undrawn facilities and cash of £652 million
    (Dec 2020: £1 billion)
-   Completion of a new £300 million unsecured revolving credit facility for Covent
    Garden, replacing the previous facility which was due to mature in December 2022
-   Early repayment of £75 million nominal of private placement loan notes due to
    complete shortly
-   Weighted average maturity on drawn debt of 4.9 years (Dec 2020: 5.4 years) and
    average cost of debt of 2.8 per cent (Dec 2020: 2.6 per cent)
KEY FINANCIALS

                                                     2021       2020       2019
  Equity attributable to owners of the            £1,786m    £1,760m    £2,478m
  Parent
  Equity attributable to owners of the             209.8p     206.8p    £290.0p
  Parent per share
 0.4% Total return in 2021 (2020: -27.2%)
 (2019: -9.6%)
  EPRA net tangible assets                        £1,810m    £1,806m    £2,506m
  EPRA net tangible assets per share               212.4p     212.1p     292.9p
  Dividend per share                                 1.5p          –       1.5p
 1.5% Total property return in 2021 (2020: -
 24.4%) (2019: -5.4%)
  Property market value1                          £1,815m    £1,942m    £2,774m
  Net rental income from continuing                £46.4m     £15.8m     £61.2m
  operations1
  Profit/(loss) for the year attributable to       £29.3m   -£702.7m   -£253.6m
  owners of the Parent
  Headline earnings/(loss) per share                 5.3p      -1.3p      -2.2p
  Basic earnings/(loss) per share2                   3.4p     -82.6p     -29.7p
 Underlying earnings/(loss) per share2               0.5p      -0.7p       1.0p
1. On a Group share basis.
2. From continuing and discontinued operations.
SHORT FORM ANNOUNCEMENT

This short-form announcement is the responsibility of the Directors. It is only a
summary of the information contained in the full announcement and does not contain
full or complete details. Any investment decision should be based on the full
announcement accessible from 22 July 2022 via the JSE link at
https://senspdf.jse.co.za/documents/2022/jse/isse/CCO/FY21Result.pdf
and also available on the Company’s website at www.capitalandcounties.com. Copies of
the full announcement may also be requested by contacting the Company
(feedback@capitalandcounties.com or telephone +44 (0)20 3214 9170).
DIVIDENDS

The Directors of Capital & Counties Properties PLC have proposed a final dividend per
ordinary share (ISIN GB00B62G9D36) of 1.0 pence payable on 8 July 2022.
Dates
The following are the salient dates for payment of the proposed final dividend:

Sterling/Rand exchange rate struck:                              Monday, 30 May 2022
Sterling/Rand exchange rate and dividend amount in Rand         Tuesday, 31 May 2022
announced:
Ordinary shares listed ex-dividend on the Johannesburg        Wednesday, 8 June 2022
Stock Exchange:
Ordinary shares listed ex-dividend on the London Stock         Thursday, 9 June 2022
Exchange:
Record date for final dividend in UK and South Africa:          Friday, 10 June 2022
Annual General Meeting                                         Tuesday, 28 June 2022
Dividend payment date for shareholders                           Friday, 8 July 2022

The proposed final dividend is subject to approval at the Company’s Annual General
Meeting, to be held on 28 June 2022.
South African shareholders should note that, in accordance with the requirements of
Strate, the last day to trade cum-dividend will be Tuesday, 7 June 2022 and that no
dematerialisation of shares will be possible from Wednesday 8 June 2022 to Friday 10
June 2022 inclusive. No transfers between the UK and South Africa registers may take
place from 8 June 2022 to 10 June 2022 inclusive. The above dates are proposed and
subject to change.

The dividend will be split equally between a PID and non-PID. Further details of the
split between the PID and non-PID will be contained in the announcement made on the
Finalisation date. The PID element will be subject to deduction of a 20 per cent UK
withholding tax unless exemptions apply. The non-PID element will be treated as an
ordinary UK company dividend.

Information for shareholders
The information below is included only as a general guide to taxation for shareholders
based on Capco'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 - PIDs
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 'Investors'
section of the Company’s website (capitalandcounties.com), or on request from our
UK registrars, Link Group. Validly completed forms must be received by Link Group no
later than the dividend Record Date, as advised; otherwise the dividend will be paid
after deduction of tax.

South African shareholders
The final dividend declared by the Company is a foreign payment and the funds are
sourced from the UK.

PIDs: South African shareholders may apply to HMRC after payment of the PID element of
the 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 PID element of the 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 PID element of the final 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: The non-PID element of the dividend will be exempt from income tax but will
constitute a dividend for SA 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 non-PID element of the final 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.

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 can be found at https://www.capitalandcounties.com/uk-
real-estate-investment-trust-reit



ENQUIRIES:

Capital & Counties Properties PLC:

Ian Hawksworth                 Chief Executive             +44 (0)20 3214 9188
Situl Jobanputra               Chief Financial Officer     +44 (0)20 3214 9183
Sarah Corbett                  Director of Commercial      +44 (0)20 3214 9165
                               Finance and Investor
                               Relations

Media enquiries:
UK: Hudson Sandler             Michael Sandler             +44 (0)20 7796 4133
SA: Instinctif                 Frederic Cornet             +27 (0)11 447 3030


A presentation will take place today at 09:45am (UK time) through a webcast on the
Group’s website www.capitalandcounties.com followed by an analyst Q&A.

JSE Sponsor
UBS South Africa (Pty) Ltd

Date: 23-02-2022 09:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.