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Interim Results for the six months ended 30 June 2021

Confident in the long-term prospects for prime central London, in particular the West End

Ian Hawksworth, Chief Executive of Capco, commented:

“Capco’s actions, commitment and creativity over the last 18 months have ensured that Covent Garden is the most vibrant district in the West End. We are confident that our approach and the quality of our estate, underpinned by our strong balance sheet, position Capco for recovery.

The elevated level of enquiries, strong transactional activity and improving sentiment indicate that the worst of the pandemic may be behind us.

Looking ahead, there are challenges in the near term, as the economy moves towards more normal levels of activity, however we remain confident in the resilience of London’s West End and the enduring appeal of Covent Garden."  

Key financials

  • Total equity of £1.7 billion (Dec 2020: £1.8 billion)
  • EPRA NTA declined by 6 per cent to 199 pence per share (Dec 2020: 212 pence per share)
  • Total property value of £1.8 billion, a decrease of 5.1 per cent (like-for-like) (Dec 2020: £1.9 billion)
  • Group net debt to gross assets ratio of 28 per cent (Dec 2020: 28 per cent)
  • Covent Garden loan to value ratio of 18 per cent (Dec 2020: 19 per cent)
  • Underlying earnings of nil pence per share (Jun 2020: 0.3 pence per share)
  • Reported net rental income £21.0 million (Jun 2020 £18.2 million)
  • Recommencement of dividend distribution with proposed interim dividend of 0.5 pence per share (Jun 2020: nil)

Covent Garden portfolio

  • Covent Garden total property value of £1.7 billion, like-for-like movement of £85 million or 4.9 per cent since 31 Dec 2020
  • ERV decreased by 4.3 per cent (like-for-like) to £76 million (Dec 2020: £81 million) while the equivalent yield was stable at 3.94 per cent

Proactive asset management and strong leasing momentum

  • 29 new leases and renewals were agreed during the period representing £6.0 million contracted income (6 per cent below Dec 2020 ERV) with a further £3.1 million under offer
  • Government restrictions have been lifted with retail and hospitality customers fully reopen
  • Growing customer sales recorded through the period with certain premium and luxury categories amongst the highest performing
  • High occupancy with EPRA vacancy at 3.4 per cent (Dec 2020: 3.5 per cent) performing strongly versus central London
  • 12 new openings scheduled over the course of 2021 including Peloton, Glossier and Ave Mario
  • Improved rent collection; 65 per cent of June quarter collected (adjusted for payment plans)
  • Customer support provided in H1 2021 on a case by case basis and expected to reduce with easing of restrictions
  • Pedestrianisation of key streets extended; additional al fresco dining providing over 800 covers
  • Six month cultural programme launched; digital engagement, public art installations, pop-up bars and terraces across the estate
  • Realised value from the sale of two residential-led blocks on Southampton Street for £50 million (before costs)

Net Zero Carbon by 2030 underlining commitment to sustainability

  • Environment, Sustainability and Community (“ESC”) Board Committee setting clear actions
  • Detailed pathway to Net Zero Carbon by 2030 to be published later this year
  • Commitment to enhancing air quality with continued pedestrianisation of streets around Piazza
  • Customer engagement programme commenced 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
  • Support provided in respect of homelessness charities, local food banks and the elderly as well as hospitality, retail and cultural foundation

Strong balance sheet position with significant financial flexibility

  • Covent Garden net debt of £304 million (Dec 2020: £352 million) and loan to value ratio of 18 per cent (Dec 2020: 19 per cent)
  • Group net debt of £668 million (Dec 2020: £710 million) and net debt to gross assets of 28 per cent (Dec 2020: 28 per cent)
  • Access to Group liquidity comprising undrawn facilities and cash of £989 million (Dec 2020: £1 billion)
  • Capital commitments of £5 million (Dec 2020: £2 million)
  • Weighted average maturity on drawn debt of 5.4 years (Dec 2020: 5.4 years) and average cost of debt of 2.8 per cent (Dec 2020: 2.6 per cent)

Other investments

  • Investment in Shaftesbury PLC valued at £552 million (Dec 2020: £552 million), compared with a £501 million cost; dividend income from Shaftesbury PLC shares of £2.3 million received in July 2021
  • Lillie Square property value of £108 million, a decrease of 7.9 per cent (like-for-like) since 31 Dec 2020. JV loan facility repaid in full during the period
  • Final £15 million of deferred consideration from the Earls Court sale due in November 2021
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