Stride Property Group · NZX:SPG

Stride Property — FY2019 Earnings Presentation

32 slides from Stride Property's earnings presentation, May 29, 2019

  1. Slide 1: Annual Results for the year ended 31 March 2019

    Stride Property Group (NS) Annual Results For the year ended 31 March 2019

  2. Slide 2: Agenda and Contents

    Agenda and Contents Page Welcome Highlights 3 Philip Littlewood – Chief Executive Officer Sustainability 9 Financial Performance 11 Jennifer Whooley – Chief Financial Officer Capital Management 16 Portfolio Overview 19 Strategy 25 Philip Littlewood – Chief Executive Officer Conclusion 27 Appendices

  3. Slide 3: Highlights

    Highlights Grey Street, Wellington 3

  4. Slide 4: Performance

    Performance Stride Property Group (Stride) – Consolidated (FY18 figures in brackets) Financial Performance Profit after income tax $76.2m • Net rental income of $57.3m ($59.1m) lower primarily due to the divestments (down $4.0m) and property under development (down $1.8m), offset by completed develo

  5. Slide 5: Places

    Places Stride Property Limited (SPL) (As at 31 March 2018 figures in brackets) • Portfolio2 occupancy 97.6% (96.7%), up 0.9% NZ Merchants 20 Rockridge Avenue, Auckland • Portfolio2 valuation $966.3m ($902.2m) representing a net valuation gain of $36.5m or 4.2% • Industrial portfolio3 value $262.5m f

  6. Slide 6: Places: Developments and Transactions

    Places Stride Property Limited Developments The Development team formed in FY18 is currently managing over $200m of development projects on Stride Investment Management Limited (SIML) managed properties. For SPL, these projects include: • 11 Springs Road, Auckland – construction of a new head office

  7. Slide 7: People

    People Board Refresh – Stride Our Values • Director refresh continued with appointment of Jacqueline Robertson in March 2019 • Jacqueline has 25 years of experience in financial and advisory services, and was a partner at Deloitte for 11 years. Jacqueline enhances the mix of skills and further stren

  8. Slide 8: Products

    Products Investore Property Limited (Investore) • SPL owns a 19.9% shareholding • FY19 dividend increased to 7.60cps (up 0.14cps or 1.9% on FY18 dividend) • $100m bond issue completed April 2018 and 1.7m shares acquired under Portfolio Composition by Value buyback programme • Successful renewal of t

  9. Slide 9: Sustainability

    33 Customhouse Quay, Wellington Sustainability 33 Customhouse Quay, Wellington 9

  10. Slide 10: Sustainability & Safety

    Sustainability & Safety Sustainability Safety • We recognise that sustainability is an important part of doing business, • Safety is a significant focus at Stride and during FY19 a new and this includes all pillars of a successful, sustainable business – Safety and Sustainability Manager was appoint

  11. Slide 11: Financial Performance

    Financial Performance 11

  12. Slide 12: Financial Performance

    Financial Performance Stride Property Group – Consolidated 2019 2018 Change Actual Actual $m $m $m % Net rental income 57.3 59.1 (1.8) (3.1) Management fee income 15.7 15.7 0.0 0.0 Corporate expenses (19.3) (17.8) (1.5) (8.7) Profit before net finance expense, other income/(expense) and income tax 5

  13. Slide 13: Distributable Profit

    11 Distributable Profit Stride Property Group – Consolidated 2019 2018 Change Actual Actual $m $m $m % Profit before income tax 81.4 100.8 (19.4) (19.3) Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (36.5) (48.3) +11.8 +24.5 - Gain on disposal of investm

  14. Slide 14: AFFO Distributable Profit

    AFFO Distributable Profit Stride Property Group – Consolidated 2019 2018 Change Actual Actual $m $m $m % Distributable profit after current income tax 38.8 38.8 0.0 0.0 Adjustments to funds from operations: - Maintenance capital expenditure (6.4) (5.5) (0.8) (15.0) Adjusted Funds From Operations (AF

  15. Slide 15: Financial Summary

    Financial Summary Stride Property Group – Consolidated As at As at 31 Mar 19 31 Mar 18 Change Portfolio valuation12 ($m) 966.3 902.2 64.0 Bank debt drawn ($m) 332.9 307.7 25.2 Bank loan to value ratio (LVR) (%) 34.4 34.1 0.3 Equity ($m) 704.2 667.1 37.1 Shares on issue (million) 365.3 365.0 0.3 NTA

  16. Slide 16: Capital Management

    Capital Management 25 O’Rorke Road, Auckland 16

  17. Slide 17: Capital Management – Debt Facilities

    Capital Management – Debt Facilities Stride Property Limited Highlights • $200m bank facility refinanced, increasing average tenor of debt facilities to As at As at Debt facilities 31 Mar 2019 31 Mar 2018 2.8 years • Next debt facility maturing is $200m in June 2021 (FY22) Banking facility limit (AN

  18. Slide 18: Capital Management – Cost of Debt

    Capital Management – Cost of Debt Stride Property Limited Key transactions As at As at Cost of debt 31 Mar 2019 31 Mar 2018 • $100m of swaps terminated in April 2018, with an average term of 2.8 years and an average rate of 4.1%, for a cost of $4.1m Weighted average cost of debt • New $120m swaps en

  19. Slide 19: Portfolio Overview

    Portfolio Overview 25 O’Rorke Road, Auckland 19

  20. Slide 20: Portfolio Overview

    Portfolio Overview Stride Property Limited As at As at As at Overview 31 Mar 1916 30 Sep 18 31 Mar 18 SPL Lease Expiry Profile17 by Contract Rental18 Properties (no.) 26 26 26 Tenants (no.) 381 377 379 Net Lettable Area (sqm) 252,014 252,038 251,953 ● 31 March 2018 ● 31 March 2019 Net Contract Renta

  21. Slide 21: Portfolio by Sector

    Portfolio by Sector Stride Property Limited Overview Total Portfolio19 Industrial Office Retail Large Format Retail and Retail Shopping Centres LFR Centres21 Properties (no.) 26 11 8 3 4 Tenants (no.) 381 21 70 49 241 Net Lettable Area (sqm) 252,014 100,919 48,606 37,205 65,284 Net Contract Rental20

  22. Slide 22: Major Lease Transactions Completed

    Major Lease Transactions Completed Stride Property Limited SIML completed 270 lease transactions for SPL during FY19: • 193 rent reviews over 127,660sqm for a total annual rental of $32.3m, an increase on previous rentals of +3.8%, or +2.7% on an annualised basis • 39 lease renewals over 24,835sqm f

  23. Slide 23: Remaining Lease Expiries FY20 & FY21

    Remaining Lease Expiries FY20 & FY21 Stride Property Limited Net Lettable % of Contract FY20 Tenant Property Area (sqm) Rental25 Various Johnsonville Shopping Centre (50%), Wellington 4,375 2.5 WNZ Wellington (Wagamama) 33 Customhouse Quay, Wellington 320 0.4 Chamber of Commerce 65 Chapel Street, Ta

  24. Slide 24: Portfolio Occupancy (by area)

    Portfolio Occupancy (by area) Stride Property Limited Occupancy (%) Vacancy Net Lettable Area Occupancy (%) Property 31 Mar 19 (sqm) 31 Mar 19 (sqm) 31 Mar 19 31 Mar 18 15 Rockridge Avenue, Auckland 100.0 0 9,113 39.0 Other 100.0 0 91,805 100.0 Industrial Total 100.0 0 100,919 94.6 Johnsonville Shop

  25. Slide 25: Strategy

    Strategy New Waste Management Development Springs Road, Auckland 25

  26. Slide 26: Stride business and strategy

    Stride business and strategy Stride is focussed on establishing a group of property funds in specific sectors to provide growth in our investment management business. In terms of our portfolios, this will include: 1. Continued focus on delivering strategy and growing our existing products – Investor

  27. Slide 27: Conclusion

    Conclusion 20 Rockridge Avenue, Auckland 27

  28. Slide 28: Conclusion

    Conclusion Delivering on results while positioning the business to execute on our strategy • Executive team completed and Board refresh progressed • Disposal of 33 Corinthian Drive provides balance sheet headroom for further growth aligned with Stride’s investment management strategy • Redevelopment

  29. Slide 29: Appendices

    Appendices Grey Street, Wellington 29

  30. Slide 30: Appendix 1

    Appendix 1 Profit before other income and income tax $40.7m $0.8m $0.6m $0.6m $2.6m $38.0m ($1.5m) ($4.0m) ($1.8m) Year ending Net rental increase Net rental reduction Net rental reduction Net rental increase NZ IFRS adjustments Lower net finance Higher corporate Year ending 31 Mar 2018 from complet

  31. Slide 31: Appendix 2

    Appendix 2 NTA per share $1.92 $0.10 $0.02 $0.10 ($0.01) ($0.01) $1.82 ($0.10) As at 31 Mar 2018 Operating Profit before Income tax expense Swap movement Dividends Paid Net change in fair value Share of profit in As at 31 Mar 2019 Tax of Investment properties associate Investment Property26 $36.5m $

  32. 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

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