SEGXF - SEGRO Plc (SEGXF) Q4 2023 Earnings Call Transcript Title:

2024-02-17 00:14:06 ET

Corcept Therapeutics Incorporated (CORT)

Q4 2023 Earnings Conference Call

February 15, 2024, 05:00 PM ET

Company Participants

Claire Mogford - Head, Investor Relations

David Sleath - Chief Executive Officer

Soumen Das - Chief Financial Officer

Conference Call Participants

Maxwell Nimmo - Numis

John Cahill - Stifel

Zachary Gauge - UBS

Robert Jones - BNP Paribas

Frederic Renard - Kepler Cheuvreux

Paul May - Barclays

Pieter Runneboom - Kempen

Presentation

David Sleath

All right. Good morning, everybody. Welcome to SEGRO's Full Year 2023 Results Presentation. Thank you all for taking the time to join us here in the room or online. Now the observant of you will have noticed that Soumen is not here in the room with us. You can't see him yet, but he will be looming large on the screen above us all. And I can tell you that this is the first, but definitely won't be the last reference today that I make to COVID-19. But Soumen, I hope you all are feeling okay and get well soon.

As usual, I'm going to make a few opening remarks before we go into the body of the presentation, and we will finish with Q&A. Now it was the macro environment that dominated headlines during 2023 as the world adjusted to higher interest rates and try to predict when they were going to settle. And in fact, as we know, it was only in the last few weeks of the year that the folks started to clear and markets gained confidence that we were nearing the end of the rate hike cycle, started turning their focus instead to when we might see the first cuts coming.

The impact of the monetary conditions on the investment market is well documented. But from an occupational market perspective, 2023 was the first time for quite a few years, probably going back to the GFC, that we saw the fundamentals of the industrial logistics sector tested by the economic headwinds. And I'm pleased to say that those occupational fundamentals or tailwinds, if you prefer, remained robust and enduring and helped us to deliver another strong operating performance.

These occupational fundamentals, together with more stable monetary conditions also, I think, provide a supportive backdrop for a recovery in investment markets. And as we look ahead with that backdrop, we're confident that SEGRO is primed to deliver significant further growth through a combination of securing higher rents and delivering profitable developments in an increasingly attractive market.

Our strategy is clear, and it's been consistent and it continues to deliver. It's been designed to ensure we produce attractive performance on a long-run basis by taking a thoughtful and disciplined approach to capital allocation, pursuing operational excellence, having an efficient capital and corporate structure and taking a responsible approach to business. And 2023 once again saw that strategy in action, enabling SEGRO to deliver for all of our various stakeholders.

We focused our investments on the current and future development program, only committing capital to the most profitable and compelling opportunities. Operationally, we secured GBP 88 million of net new rent commitments, which is one of our best years ever, with a significant proportion of capital-light reversion capture coming from the existing portfolio and which contributed to a 6.5% growth in like-for-like net rental income.

Our balance sheet remains in good shape with modest leverage, substantial liquidity, a long debt maturity profile and a low almost entirely fixed average cost of debt. And as you'll see in a moment, we've done well with our Responsible SEGRO commitments.

This slide shows how that consistent strategy has delivered attractive financial returns over a number of years. Since 2016, our passing rents have grown 12% per annum. This has supported compound annual growth rates in both earnings and dividends per share of 8%. Over the property cycle, we cannot control investment yields, which are highly correlated to government bond yields. But even after the recent market correction, we've shown a very attractive 10% CAGR in net asset value per share since 2016. This is pretty strong compounding performance, and we believe there's still a lot more to come....

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