Dexus Convenience Retail REIT · ASX:DXC

Dexus Convenience Retail REIT — APN Property Group — H1 2015 Earnings Presentation

34 slides from Dexus Convenience Retail REIT's earnings presentation, Feb 23, 2015

  1. Slide 1: December 2014 Half Year Results Presentation

    DECEMBER 2014 HALF YEAR RESULTS PRESENTATION 23 FEBRUARY 2015

  2. Slide 2: Agenda

    AGENDA  Results summary  Business highlights  Strategy and outlook  Appendices Chris Aylward Tim Slattery Michael Groth Executive Chairman Executive Director Chief Financial Officer 2

  3. Slide 3: Results Summary

    RESULTS SUMMARY APN | Property Group

  4. Slide 4: HY2015 Highlights

    HY2015 Highlights Financial Results  Statutory profit after tax of $8.5 million up 101%  Operating earnings1 before tax of 2.55 cents per share  Continuing improvement of ‘quality’ of earnings – funds management fees $5.9 million up 20% Australian Red Cross Blood Service Facility, Brisbane QLD 

  5. Slide 5: HY2015 Highlights – continued

    HY2015 Highlights – continued Strong operational results  Strong results across the business  Coburg North – new syndicate successfully launched  Auburn – redevelopment well progressed and sale announced1 8 Clunies Ross Crt, Brisbane Technology Park QLD Earnings and dividend guidance increased 

  6. Slide 6: Income statement Highlights

    Income statement Dec Dec Highlights $000s 2014 2013 Change  Strong growth in recurring income – now 72% Funds management fees 5,861 4,885 ▲ 20% Performance & transaction fees 3,671 6,154 ▼ 40%  Co-investment income (ex mark to market Asset & project management fees 905 647 ▲ 40% movements) $1.5 mi

  7. Slide 7: Balance sheet

    Balance sheet  Cash of $20.0 million $000s Dec 2014 Jun 2014 Change Cash 20,0121 6,0341 ▲ 232% – Cash held in trust for underlying funds managed by the Group of $8.9 million Co-investments 48,555 46,077 ▲ 5% (June 2014: $0.2 million) Other assets 13,979 11,519 ▲ 21% Intangible assets 4,073 4,079 -

  8. Slide 8: Funds under management

    Funds under management1 Continuing investment performance has delivered solid FUM growth over the period $109m $2,128m $2,023m ($36m) $17m $15m $1,787m Net FUM increase Portfolio and market Casey Specialist revaluations across movements across 541 St Kilda Road Centre completion Securities Securitie

  9. Slide 9: Business Highlights

    BUSINESS HIGHLIGHTS APN | Property Group

  10. Slide 10: Group Overview

    Group Overview $1,151 million $341 million Funds Under Management Funds Under Management 6 Securities Healthcare 1 Funds Fund $231 million $405 million Funds Under Management Funds Under Management Direct Industria 4 1 Funds1 Fund 1 Excludes new funds launched post 31 December 2014 (APN Coburg North

  11. Slide 11: Direct Funds

    Direct Direct Funds Highlights  Exchanged conditional contract for sale of The Marketplace, Auburn with forecast investor gross profit of >50%  150 Collins St completed (APN DF2)  Completed sale of 541 St Kilda Road – 29% total return  Successfully launched APN Coburg North Retail Fund  Sale fo

  12. Slide 12: APN Coburg North Retail Fund

    Direct APN Coburg North Retail Fund  New direct unlisted property fund  Recently built (2014) shopping centre anchored by Investment type Single asset, closed-end unlisted property fund Woolworths supermarket Investment objective Stable income and capital growth Property Coburg Hill Shopping Centr

  13. Slide 13: Real Estate Securities

    Securities Real Estate Securities  FUM at $1,151 million, increase of 10.4% since June 2014 APN AREIT Fund continuing strong net inflows  Awarded Money magazine’s 2015 Best of the Best Award $25.0m $22.5m  AREIT Fund average net inflows of ~$20 million per month $20.0m  Consistent returns and lo

  14. Slide 14: Healthcare

    Healthcare Healthcare Highlights  Total return of 18.7% (6 months), outperforming the S&P/ASX 300 Property Trust Accumulation Index return of 12.7%  Completed Casey Specialist Centre and advanced growth projects including Frankston Private and Epworth Freemasons Cancer Centre  Multiple industry r

  15. Slide 15: Industria

    Industria Industria Highlights  Half year distribution of 8.36 cents per Security delivered  WALE increased over the period to 5.1 years Key metrics  NTA increased to $2.01 Market Capitalisation1 $250 million  Included in the S&P/ASX 300 index Total Funds Under Management $405 million  16,400+

  16. Slide 16: Strategy and Outlook

    STRATEGY AND OUTLOOK APN | Property Group

  17. Slide 17: Strategy and implementation

    Strategy and implementation PROPERTY FOR INCOME Philosophy Approach Investment performance Outstanding service Focus on activities in which  Specialist expertise Strategy  Track record APN has a competitive  Governance advantage  Co-investment ‘How we are seeking to do it’ Commercial objective:

  18. Slide 18: Attractive Industry Dynamics and Market Position

    Attractive Industry Dynamics and Market Position Projected superannuation assets to 2033 Australian superannuation assets $1.87 trillion1; 1 forecast to grow to $3 trillion by 20202 Income-orientated investment products are 2 attractive assets for superannuation investors APN’s ‘property for income’

  19. Slide 19: Outlook

    Outlook  Low growth, low inflation environment  Interest rate cuts and AUD decline will assist Economic growth (in part) environment  Structural changes (wages etc) likely necessary for major improvements 34 Australis Dr, Derrimut VIC  Continue to be highly liquid with significant competition fo

  20. Slide 20: Outlook

    Outlook  Focus on longer lease term assets or structured (eg development) opportunities  Shorter lease terms - incentive levels and cash flow risk Investment on expiry strategy  Well leased commercial property remains an attractive investment proposition in a low growth, low inflation Epworth Fre

  21. Slide 21: Appendix A: Financial Information

    APPENDIX A FINANCIAL INFORMATION 21

  22. Slide 22: Financial Performance

    Financial Performance Income Statement Dec 2014 Dec 2013 $’000s $’000s Fund management fees 5,861 4,885 Performance & transaction fees 3,671 6,154 Asset & project management fees 905 647 Registry, accounting & other fees 1,165 1,252 Total Net Funds Management Income 11,602 12,938 Co-investment incom

  23. Slide 23: Revenue analysis

    Revenue analysis Frequency of ‘non-recurring’ income (5 of 12 funds have ability to earn ‘non-recurring’ income)1 13.2 Average FY2007 - FY2014 = $4.5 million 11.5 6.7 1.1 0.6 3.7 0.0 2.0 2.1 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015YTD Continuing improvement in ‘quality’ of earn

  24. Slide 24: Financial Performance – Operating Cashflow

    Financial Performance Operating Cashflow $’000s Dec 2014 Dec 2013 Cashflow Reconciliation 12,000 $000s $000s Statutory profit after tax 8,510 4,227 1,228 (4,667) 10,000 Add/(deduct): 8,510 Non-controlling interests 1,228 1,170 8,000 Mark to market revaluations (4,667) (1,188) 6,000 311 (966) Non-cas

  25. Slide 25: Operating Profit Before Tax Reconciliation

    Operating Profit Before Tax Reconciliation 7,000 976 (2,483) 6,000 472 5,381 5,168 1,016 61 5,000 258 (87) 4,000 3,000 2,000 1,000 - Operating profit Fund Performance & Asset & project Registry & other Co-investment Overheads and MI share of Operating profit before tax at Dec management transaction

  26. Slide 26: Balance sheet

    Balance sheet $’000s Dec 2014 Jun 2014 Cash and cash equivalents 20,0121 6,0341 Trade and other receivables 6,951 6,165 Co-investments 48,555 46,077 Other assets 1,492 366 Total Current Assets 77,010 58,642 Intangible assets 4,073 4,079 Deferred tax assets 5,173 4,643 Other assets 363 345 Total Non-

  27. Slide 27: Co-investments ($000s)

    Co-investments ($000s) $60.0m $50.0m $1.4m $1.1m $0.9m $0.1m $12.5m $0.1m $40.0m $32.5m $30.0m $48.6m $20.0m $10.0m $0.0m Generation Industria REIT APN AREIT Fund APN Asian REIT APN Asia Pacific APN Newmark APN Total co- 1 Healthcare REIT Fund REIT Fund Devevelopment Auburn Property investments Fund

  28. Slide 28: Appendix B: Funds Under Management Summary

    APPENDIX B FUNDS UNDER MANAGEMENT SUMMARY 28

  29. Slide 29: Funds Under Management Summary

    Funds Under Management1 Summary Fee Basis Co- Funds Under Funds Sector Investors investment Management Mgmt Perf Other Stake APN AREIT Fund Property Securities Retail & Institutional $785m  − APN Property for Income Fund Property Securities Retail & Institutional $204m  − APN Property for Income F

  30. Slide 30: Appendix C: Company Overview

    APPENDIX C COMPANY OVERVIEW 30

  31. Slide 31: Company overview

    Company overview Share Price and Volume (three years) Volume (RHS) 1.0m $0.35 0.9m Price S&P/ASX 300 Index (Rebased) 0.8m $0.30 0.7m 0.6m $0.25 0.5m 0.4m $0.20 0.3m $0.15 0.2m 0.1m $0.10 0.0m Dec 2011 Mar 2012 Jun 2012 Sep 2012 Dec 2012 Mar 2013 Jun 2013 Sep 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014

  32. Slide 32: History

    History Australian Property APN’s first direct property Network Pty Ltd APN Property for Income fund, APN Retirement Coburg North commenced Fund No. 2 launched. APN launches the APN AREIT Fund Properties Fund established Retail Fund operations with an APN AREIT Fund, a exceeds $300m property securit

  33. Slide 33: Disclaimer

    Disclaimer The financial information included in this presentation is based on APN Property Group’s financial statements and results that have been prepared in accordance with the Corporations Act 2001 (Cth), applicable Accounting Standards and Interpretations and in compliance with other applicable

  34. Slide 34: Contact details

    Contact details Chris Aylward Tim Slattery Michael Groth Executive Chairman Executive Director Chief Financial Officer Ph: (03) 8656 1000 Ph: (03) 8656 1031 Ph: (03) 8656 1026  [email protected][email protected][email protected] APN Property Group Limited Level 30,

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