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Interim Results for the six months ended 30 June 2018

Ian Hawksworth, Chief Executive of Capco, commented:

“Capco has had an active start to the year across its two prime central London estates. At Covent Garden we delivered another period of strong performance and an increase in value, with excellent demand across all uses driving 21 per cent overall growth in net rental income. At Earls Court, the consented land is now ready for development and we have realised significant proceeds over the last twelve months from the sale of the Empress State Building and continued sales at Lillie Square.
Capco has achieved significant growth since listing, with long-term value creation across the business. Covent Garden has been transformed into a leading global retail and dining destination, attracting a vibrant mix of British, independent and international brands, while at Earls Court, we have created one of central London's most important mixed-use development opportunities. Against this backdrop, the Board is considering the structure of the Group and constructive early steps have been taken in preparing for a possible demerger.
Whilst the broader macroeconomic outlook remains uncertain, Capco is backed by a strong balance sheet and remains focused on creating long-term value for shareholders. Our two prime central London estates are well-placed for long-term success.”

Key financials

  • Equity attributable to owners of the Parent £2.8 billion (Dec 2017: £2.8 billion)
  • EPRA NAV maintained at 334 pence per share (Dec 2017: 334 pence per share)
  • Total property value of £3.3 billion, a decrease of 0.4 per cent (like-for-like) (Dec 2017: £3.3 billion adjusted for the sale of the Empress State Building)
  • Proposed interim dividend of 0.5 pence per share (Jun 2017: 0.5 pence per share)
  • Continued income growth at Covent Garden 
  • Covent Garden total property value of £2.6 billion, a 1.6 per cent increase (like-for-like) (Dec 2017: £2.5 billion)
  • Net rental income up 11.6 per cent (like-for-like) or 21.2 per cent in absolute terms against June 2017 
  • Positive operational momentum; 26 new leases and renewals 8.9 per cent above December 2017 ERV
  • ERV increased by 1.9 per cent (like-for-like) to £107 million (Dec 2017: £105 million)
  • Development of Floral Court complete; 75 per cent of lettable space contracted 
  • Tiffany recently launched new concept store on James Street

Realising value at Earls Court

  • Earls Court interests valued at £707 million, a decrease of 7.0 per cent (like-for-like) (Dec 2017: £759 million adjusted for the sale of the Empress State Building)
  • ECPL land available for development; ongoing interest from potential partners and end users
  • Sale of the Empress State Building for £250 million, a £30 million premium to the Dec 2017 valuation
  • Lillie Square:
    • Delivery of Phase 1 substantially complete, £123 million cash proceeds received (Capco share)
    • Over 80 per cent of Phase 2 now reserved or exchanged and main construction has commenced

Strong financial position with significant financial flexibility 

  • Group loan to value ratio of 17 per cent (Dec 2017: 21 per cent)
  • Group undrawn facilities and cash of £886 million (Dec 2017: £691 million)
  • Capital commitments of £82 million (Dec 2017: £61 million)
  • Weighted average maturity of 6.5 years (Dec 2017: 6.9 years)
  • Weighted average cost of debt of 2.9 per cent (Dec 2017: 2.8 per cent) 

Preparation for possible demerger 

  • Constructive early steps taken in preparing for a possible demerger and further announcements will be made in due course 
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