Shaftesbury Capital PLC

If you're ready to start, we can crack on. Well, good morning again. Thanks so much for joining us today at our interim results presentation. We're delighted to report strong results for the first half, delivering growth across all key metrics. This is the agenda for this morning. I'll start with an overview. Sital will then take you through the financial review. and I'll then provide an update on portfolio activity and we'll finish with a summary and outlook. So it's been a successful period, delivering strong performance with an increase in rents, values, income and dividend. And despite the well-documented uncertain geopolitical and macroeconomic environment, I'm pleased to say that the West End continues to demonstrate its strength and our portfolio is well positioned to outperform. We continue to see positive trends in footfall and customer sales growth across our prime portfolio and the team, many of whom are here today, is successfully achieving significant leasing spreads with excellent levels of activity, limited vacancy and a strong pipeline of transactions. We continue to invest in our portfolio through capital expenditure and acquisitions and also disposed of non-core asset Lily Square during the period. We have a strong balance sheet with access to substantial liquidity and are well positioned to take advantage of market opportunities. So just turning to the headline results for the first half of the year, total property value increased 3.4% like for like to 5.6 billion pounds. That was supported by 3.8% increase in ERV. EFRA NTA increased 3.9%, 223 pence per share, provided a total property return which was 5%, which is significantly above the MSCI index of 2.6%. The total accounting return was 4.9%. We continue to deliver rental growth and operational efficiencies whilst aiming to enhance customer service. Underlying earnings overall increased by 8% and the board has declared an interim dividend of 2.2 pence per share, which is up 16%. I think the performance demonstrates the exceptional qualities of the portfolio delivering growth in rents, dividends, ERV and valuations. As one of the largest owners of property in London's West End, we play an important role in shaping the areas that we operate in and their long-term future. Visitors continue to be drawn to the West End's exceptional cultural, retail and entertainment offering. Approximately 70% of footfall is driven by domestic UK visitors. Londoners account for around 45%. visitors from elsewhere in the UK are furthered 25% and international visitors into the capital contribute the remaining approximately 30% creating a diverse very resilient customer base that supports consistent trading performance we've noticed that spend, basket sizes and overall trading productivity continue to improve and this is supported by more frequent and longer visits reflecting the strength of engagement across our destinations. Rental growth prospects are underpinned by strong fundamentals. Occupancy remains very high with the supply of new space limited and this is creating continued scarcity value. The West End market has delivered quite predictable growth over the long term with annualised rental growth of approximately 4% per annum Our portfolio has delivered ERV growth of nearly 7% per annum since 2010. West End retail yields have also been remarkably consistent, averaging approximately 4% over many cycles, again demonstrating its attractiveness and also its long-term defensive qualities. So as I say, despite that backdrop, investment yields across our portfolio, which predominantly comprise small lot size freehold properties, remain very resilient. And there continues to be a broad pool of domestic and international investors attracted to the West End real estate market, particularly for those smaller lot sizes, which is a very active component of the marketplace. So with that, I'll just hand over to Zittel to take you through the financial review.

Thanks, Ian, and good morning all. As you've seen, there's been continued progress in the first half towards our medium-term target and further growth in earnings, valuations, and net tangible assets. Our strong balance sheet positions us well for investment, expansion, and growth. So starting with the income statement, top-line growth reflects a successful period of leasing and asset management. Gross rents of £97.3 million are effectively up 4%, adjusting to the establishment of the Covent Garden Partnership in April 2025. In aggregate, commercial lettings and renewals were 5% ahead of ERV and 25% ahead of previous passing rents. Property costs reflect some inflation, and a small increase in the expected credit loss offset by operational efficiencies. Administration costs of £20.8 million include the effect of an increased share option charge and ongoing savings. Continued income growth and operational efficiencies are targeted over future periods. Net finance costs have been reduced to £17.5 million, reflecting lower levels of drawn debt. All of these movements taken together resulted in an 8% increase in underlying earnings to £44 million, or 2.4 pence per share, and we've increased the interim dividend to 2.2 pence. There's been further growth in passing and market rents, with embedded reversion in the portfolio and good visibility on income growth. ERVs were up across the portfolio, resulting in a 3.8% increase since December to over £280 million. Retail and CompGarden were the largest contributors to growth in passing rents during the period. Vacancy remains low, with under 3% of the portfolio being available to let. As illustrated in the chart, there's the opportunity to grow rental income significantly whilst also continuing to grow ERVs. This will be through a combination of contracted income and rent freeze converting to running income, refurbishments being completed, and ERV capture through the normal leasing cycle. So turning now to the balance sheet, the main driver for NTA growth was increased property valuations. The market value of the portfolio is up 3.4% to 5.6 billion pounds. or £4.9 billion on a group share basis. Total property return to the period was 5%, outperforming the MSCI UK Property Index. Net debt is slightly under £800 million, with loan-to-value at 16%. NTA per share has increased by 3.9% since December to 223 pence, and NRV per share is up to 241 pence. Rental values are up across the portfolio, with retail and F&B, which account for some 70%, being the standout contributors. The equivalent yield was stable at 4.6% for the commercial portfolio. Our sales continue to be highly attractive to our customers, and with average rental tones of around £100 per square foot, demonstrate good levels of affordability and leave plenty of room for growth. The balance sheet is in a strong position with low leverage, access to significant liquidity and substantial headroom against covenants. With loans to value of 16% and net debt to EBITDA of under 6.5 times, there is significant flexibility to deploy capital. Most of our drawn debt is at fixed rates. The interest rate protection we have in place will be topped up with further hedging for future years. Other points on debt. Firstly, we have reduced gross debt using cash to repay the exchangeable bonds and the Lily Square proceeds to pay down bank facilities. Secondly, we've extended the maturity profile, most recently on the Comet Garden RCS. And three, debt margins have continued to improve, with our most recent facility being completed at 90 basis points for an initial term of five years. Post repayment of the private placement loan notes maturing later this year, the group will have access to over £800 million of liquidity. We are very well paced to invest in our portfolio and will continue to review financing opportunities, taking advantage of the attractive credit profile of the group. So to summarise, there's been strong financial performance in the first half and we have enhanced flexibility. The total accounting return in H1 was 4.9%, driven by rental growth and disciplined cost and capital management. We will continue to focus on our priority areas, progression in earnings and dividends, deploying capital accretively, and maintaining balance sheet strength and flexibility. And with that, I will now hand back to Ian.

Thanks Tittle. So a little bit about the portfolio, just a recap. I think you know what we own, but it's an impossible to replicate portfolio. It's located in some of the most iconic destinations across the West End. Obviously Covent Garden, Carnaby, Soho and Chinatown. It's 5.6 billion pounds of value. that we have under management today comprises 2.8 million square feet of lettable space that sits across 640 predominantly freehold buildings within that there are approximately 1900 individual units excuse me the portfolio is broadly one third retail one third food and beverage with the balance in the upper floors which offer office and residential accommodation and overall the portfolio offers a very diverse occupier mix, a range of income streams and a range of unit sizes and rental towns. As you'll have seen, occupational demand continues to be strong and it prioritises the best locations, not just in London but elsewhere in the world. Availability on many of our streets is now at near record lows, and that's supporting competitive pricing. Portfolio vacancy was 2.6% at the mid-year, and there's obviously been progress since that date, with this slide showing some of the new brands and renewals that occurred during the period. Overall, 226 leasing transactions completed. That represented £23 million of contracted rent about 5% ahead of December 25 ERV and roughly 18% ahead of previous passing rates. I think the long-term benefits of our active approach to asset management and our leasing strategy are becoming increasingly evident. Careful customer selection and the introduction of high-quality brands have driven higher sales densities, stronger customer performance and continued rental growth. Since the merger we've welcomed over 180 new brands across the portfolio and many of those new entrants are trading at significantly higher levels than the previous occupiers which supports future sustained rental growth. The team take a very active and creative approach. This is informed by a really deep knowledge of the West End and I think that positions the company