Stride Property Group · NZX:SPG
Stride Property — FY2018 Earnings Presentation
32 slides from Stride Property's earnings presentation, May 30, 2018
Slide 1: Annual Results for the year ended 31 March 2018
Stride Property Group (NS) Annual Results For the year ended 31 March 2018 30 May 2018
Slide 2: Agenda and Contents
Agenda and Contents Page Welcome Highlights 3 Philip Littlewood – Chief Executive Officer Strategy 5 Financial Performance 10 Jennifer Whooley – Chief Financial Officer Capital Management 15 Portfolio Overview 18 REIM Business 23 Philip Littlewood – Chief Executive Officer Conclusion 26 Appendices 2
Slide 3: Highlights
Highlights Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 3
Slide 4: Highlights
Highlights On 10 June 2016, Stride Property Limited (SPL) issued an Distributable profit1 after current Explanatory Memorandum as a part of its restructuring into income tax of 10.63 cps, up a stapled group. The following is a comparison of the prospective financial information in the Explanatory Me
Slide 5: Strategy
Strategy Vision Strategy Strategic pillars To be the best performing listed Stride is developing a real estate real estate investment and investment management (REIM) management company in business for the long term, with each New Zealand step towards growth deliberate and carefully considered We us
Slide 6: Delivery of Strategy
Delivery of Strategy (Compared to Prospective Financial Information for FY18 figures in brackets) Net property valuation increase1 Our commitment • We target investments that show high, long-term demand with consistently strong returns • We will continue to grow our high performing and NTA sustainab
Slide 7: Delivery of Strategy
Delivery of Strategy Appointment of new Chief Executive Officer Philip Littlewood Appointment of new Our commitment Director Philip Ling We are committed to building our capability to deliver a full range of services from asset management to property development, from finance to corporate services a
Slide 8: Delivery of Strategy
Delivery of Strategy (Prior period FY17 for SPL figures in brackets) 15 Rockridge Avenue, Auckland Our commitment We leverage our investment management, development and leasing expertise to select property investments that deliver market leading returns Our delivery • Divestments - three Bunnings op
Slide 9: Delivery of Strategy
Delivery of Strategy Portfolio valuation – owned and managed properties as at 31 March 2018 Our commitment • We create and manage sustainable, single sector focused investment products for our investors • We co-invest in our products to ensure we have a long-term alignment with our investors • Our s
Slide 10: Financial Performance
Financial Performance Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 10
Slide 11: Financial Performance
Financial Performance Stride Property Group - Consolidated 2018 2018 Prospective Change Actual Base Case $m $m $m % Net rental income 57.6 58.2 (0.6) (0.9) Management fee income 13.3 12.9 +0.4 +3.0 Corporate expenses (13.8) (13.1) (0.7) (5.3) Profit before net finance expenses, other income and inco
Slide 12: Distributable Profit
Distributable Profit1 Stride Property Group - Consolidated 2018 2018 Prospective Change Actual Base Case $m $m $m % Profit before income tax 100.8 46.3 +54.5 +117.9 Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (48.3) (1.1) (47.2) (4,129.3) - Share of pr
Slide 13: AFFO Distributable Profit
AFFO Distributable Profit Stride Property Group - Consolidated 2018 2018 Prospective Change Actual Base Case $m $m $m % Distributable profit after current income tax 38.8 38.1 +0.7 +1.9 Adjustments to funds from operations: - Maintenance capital expenditure (5.5) (4.0) (1.5) (36.5) Adjusted Funds Fr
Slide 14: Financial Summary
Financial Summary Stride Property Group - Consolidated As at As at 31 Mar 18 31 Mar 17 Property value1 ($m) 902.2 895.3 Bank debt drawn ($m) 307.7 347.5 Bank loan to value ratio2 (LVR) 34.1% 38.8% Equity ($m) 667.1 607.9 Shares on issue (million) 365.0 364.9 NTA per share (refer Appendix 2) $1.82 $1
Slide 15: Capital Management
Capital Management Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 15
Slide 16: Capital Management – Debt Facilities
Capital Management – Debt Facilities Stride Property Limited As at As at Key Transactions: Debt facilities 31 Mar18 31 Mar17 • Lease incentive - $18m paid to Bunnings ($13m net of tax) Bank facility limit $400m $400m (ANZ, BNZ, CBA, Westpac) • Disposals - Three Bunnings operated properties to Invest
Slide 17: Capital Management – Cost of Debt
Capital Management – Cost of Debt Stride Property Limited As at As at Key Transactions: Cost of debt 31 Mar 18 31 Mar17 Weighted average cost of debt • Expired hedging - $85m swaps, with rates ranging from 3.3% - 5.0% 5.04% 4.85% (incl. margins & line fees) • Post balance date Weighted average inter
Slide 18: Portfolio Overview
Portfolio Overview Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 18
Slide 19: Portfolio Summary
Portfolio Summary Stride Property Limited As at As at Overview 31 Mar 18 31 Mar 17 Lease expiry profile2 by Contract Rental1 Properties (no.) 26 29 Tenants (no.) 379 380 Net Lettable Area (m2) 251,953 304,714 WALT (years) 5.1 4.9 Occupancy Rate (by area) 96.7% 96.8% Portfolio Valuation3 ($m) 902.2 8
Slide 20: Major Lease Transactions Completed
Major Lease Transactions Completed Stride Property Limited Annual Contract Lease Term Rental1 Tenant Property Commencement Area (m2) (years) ($000) Tasman Liquor Company 22 Ha Crescent, Auckland July 2018 8,757 3 795 Checkpoint NZ 15 Rockridge Avenue, Auckland August 2018 3,505 10 505 Bed Bath & Bey
Slide 21: Remaining Lease Expiries FY19 & FY20
Remaining Lease Expiries FY19 & FY20 Stride Property Limited % of FY19 Net Lettable Contract Property Tenant Area (m2) Rental1 Johnsonville Shopping Centre (50%), Wellington Various 3,163 1.72 1 Grey Street, Wellington Westpac (NZ) Investments 1,586 0.97 7-9 Fanshawe Street, Auckland IAG 667 0.43 46
Slide 22: Portfolio Occupancy 96.7% (by area)
Portfolio Occupancy 96.7% (by area) Stride Property Limited Post balance date, remaining vacancy at 15 Rockridge Avenue, Auckland, was leased increasing portfolio occupancy to 98.8% Occupancy (%) Vacancy (m2) Total Area (m2) Occupancy (%) Property 31 Mar 18 31 Mar 18 31 Mar 18 31 Mar 17 21-25 Teed S
Slide 23: REIM Business
REIM Business Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 23
Slide 24: Portfolio Valuation: Owned and Managed Properties
Portfolio Valuation: Owned and Managed Properties Value of Number of Investment in Investment Investment Managed Properties1 Properties Entities $902m2 263 – $738m 40 19.9% held by SPL $538m 43 2.0% held by SPL Total $2,178m 693 – 1. Independent valuations as at 31 March 2018. 2. Includes NorthWest
Slide 25: REIM Fee Income
REIM Fee Income Investor alignment Real estate investment management Managed Portfolios — composition by value1 fee income ($m) The performance of Stride’s investment management business is highly aligned with the investors in each of SIML’s managed products. The performance of Stride’s investment m
Slide 26: Conclusion
Conclusion Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 26
Slide 27: Conclusion
Conclusion (Compared to Prospective Financial Information for FY18 figures in brackets) Execution of strategy Execution of strategy • Significant steps have been taken around Stride’s four strategic pillars of Performance, People, across four ‘P’s Places and Products Performance, People, Places, Pro
Slide 28: Appendices
Appendices Stride Property Group — Annual Results Presentation for the year ended 31 March 2018 28
Slide 29: Appendix 1
31 Mar 18 Revaluation Revaluation Market Cap Market Cap Stride Property Limited Valuation Movement1 Movement1 Rate 2018 Rate 2017 Appendix 1 Address 33 Corinthian Drive City Auckland $m 47.4 % 1.2 $m 0.5 % 6.30 % 6.30 7 - 9 Fanshawe Street Auckland 9.8 (20.3) (1.9) 10.25 10.50 80 Greys Avenue Auckla
Slide 30: Appendix 2
Appendix 2 Profit before Other Income and Income Tax $3.5m $40.7m $0.5m $4.7m ($1.8m) $34.1m $0.1m ($0.4m) Year ending Net rental Net rental increase Increase in Lower net finance Higher One-off Year ending 31 Mar 2017 loss from from existing portfolio management fee expense corporate expenses proje
Slide 31: Appendix 2 (continued)
Appendix 2 (continued) Investment Properties (excludes the value of inventory of $36.3m) $18.0m $48.3m $866.0m $859.0m $18.6m $0.5m ($78.4m) As at Lease restructure Disposals Capital expenditure, Transfers from Net change As at 31 Mar 2017 expenditure lease incentives work in progress in fair value
Slide 32: Thank you
Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the year ended 31 Marc