EXPERTS IN REGIONAL PROPERTY

PALACE CAPITAL PLC FINAL RESULTS

Y E A R E N D E D 3 1 M A R C H 2 0 2 3

Agenda

  • Key highlights
  • Financial review
  • Operational review
  • Outlook
  • Appendices

Page 1 | Palace Capital plc | Investor Presentation June 2023 | palacecapitalplc.com

OVERVIEW

Key Highlights

Good progress achieved in strategy to maximise cash returns to shareholders in difficult market conditions

  • £59.0m of investment properties and £12.3m of HQ apartments completed or exchanged from 1 April 2022 to date
  • Disposals facilitated gross debt reduction of £37.5m in FY 23 to £64.3m (net debt £58.8m). Post year end and by 31 July 2023 gross debt expected to reduce by c£30.3m to c. £34m and net debt from £58.8m to c. £20m
  • LTV expected to reduce to c.13% by 31 July 2023, down from 31% at 31 March 2023
  • Two share buyback programmes announced during FY 23, with 2.6m shares purchased for £6.7m . Since 1 April 2023 a further 0.5m shares purchased for £1.2m. Total cash returned to shareholders from the buyback programme to date is £7.9m. The Company has today announced a further share buyback programme of up to 1m shares or £2.5m
  • Total dividends paid or declared for the year increased by 13.2% to 15.0p (FY 22: 13.25p)

Company remains well placed regarding timing of disposals programme including various options for returning capital to shareholders

  • As evidenced by the £34m industrial portfolio disposal in May 2023 which had been paused in October 2022 demonstrating the flexibility and optionality regarding strategy execution
  • Operationally the business remains robust with 99% rent collection for FY 23 and proactive asset management
  • Proactive asset management generating an additional £1.1m of annualised rental income from lease activity, 11% above March 2022 ERV
  • Strong income return of 7.3% led to a Total Property Return of -11.6% (FY 22: +12.5%), outperforming the MSCI UK Quarterly Property Index benchmark of -12.6% for FY 23
  • Like-for-likeproperty portfolio valuation reduction of -18.6% (FY22: +3.9%) due to softening yields across the portfolio, although £43.4m of disposals, 6% ahead of book value since 31 March 2023, and an accretion of 6p per share in EPRA NTA has demonstrated that some value has been recovered and realised

Page 2 | Palace Capital plc | Investor Presentation June 2023 | palacecapitalplc.com

FY 23: FINANCIAL REVIEW

Key Financial Highlights FY 23

ADJUSTED PROFIT

BEFORE TAX

£7.6m

FY 22: £7.8m

ADJUSTED EPS

17.1p

FY 22: 16.9p

EPRA NTA

PER SHARE

296p

FY 22: 390p

DIVIDENDS PAID

OR DECLARED

15.0p

FY 22: 13.25p

GROSS DEBT

£64.3m

FY 22: £101.8m

LOAN TO VALUE

31%

FY 22: 28%

ANNUALISED COST SAVINGS

£1.4m

SHARE

BUYBACKS

£6.7m

Page 3 | Palace Capital plc | Investor Presentation June 2023 | palacecapitalplc.com

FY 23: FINANCIAL REVIEW

Financial Statement Review

INCOME STATEMENT

31 March 23

31 March 22

31 March 23

31 March 22

Gross property income (excl. ECL provision)

£17.9m

£17.4m

BALANCE SHEET

Property operating expenses

(£2.6m)

(£2.6m)

Portfolio value

£192.4m

£259.0m

ECL provision

£0.3m

£0.4m

Cash

£5.5m

£28.1m

Net rental income (excl. trading profit)

£15.6m

£15.2m

Drawn debt

£64.3m

£101.8m

Recurring admin expenditure

(£4.1m)

(£4.4m)

Net debt

£58.8m

£73.6m

Finance costs

(£3.9m)

(£3.0m)

IFRS net assets

£128.5m

£177.2m

Adjusted profit before tax

£7.6m

£7.8m

Basic NAV per share

294p

383p

Tax

£0.1m

(£0.1m)

EPRA NTA per share

296p

390p

Adjusted profit after tax

£7.7m

£7.7m

Loan to value

31%

28%

Payments to former Directors (incl. associated costs)

(£1.8m)

-

NAV gearing

46%

41%

Share based payments & development loan interest

(£0.2m)

(£0.3m)

EPRA earnings

£5.7m

£7.4m

Gain/(loss) on revaluations

(£42.9m)

£8.2m

HQ trading profit

£0.5m

£3.8m

Profit on disposal - investment properties

£0.8m

£5.0m

Other P&L movements*

£0.2m

£0.1m

IFRS earnings

(£35.7m)

£24.5m

*Other P&L movements includes changes in fair value of interest rate derivatives, debt termination costs, and loss on disposal of listed equity investments Page 4 | Palace Capital plc | Investor Presentation June 2023 | palacecapitalplc.com

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Palace Capital plc published this content on 15 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 June 2023 09:31:09 UTC.