Bwp Trust · ASX:BWP
Bwp Trust — H1 FY2006 Earnings Presentation
25 slides from Bwp Trust's earnings presentation, February 2006
Slide 1: Interim Results Presentation
Interim Results Presentation Vermont South, Vic February 2006 www.bunningspropertytrust.com.au
Slide 2: Presentation Outline
Presentation Outline ¾ Structure ¾ Key Events/Results ¾ Tenant Performance ¾ Portfolio ¾ Capital Management ¾ Financial Performance ¾ Outlook February 2006 2 2
Slide 3: Structure
Structure ¾ Manager: Bunnings Property Management (BPML) – subsidiary of WES; but… – independent board Bill Cairns (Chairman); AVR, ex GPT,FAL,WAN John Austin; MREEF, ex JLL, GRW Property Peter Mansell; WAN, FAL, JDV, ZFX Peter Johnston; ex WES, ex BPML director ¾ Tenant: Bunnings Group Limi
Slide 4: Results – highlights at 31 Dec 2005
Results – highlights at 31 Dec 2005 ¾ Revenue $27.2 million 10.6% on pcp ¾ Operating profit $18.8 million 7.3% on pcp ¾ Distribution 6.22 cpu 7.4% on pcp ¾ NTA1 $1.59 per unit $0.13 on pcp ¾ Market capitalisation $588 million 7.3% on pcp 1 includes IFRS adjustment to previously disclosed NTA Februar
Slide 5: Events - highlights
Events - highlights ¾ Acquisition, development & upgrades ($30.2m) – purchase of Morley ex BBC HWH – Vermont South development completed – Bayswater showrooms completed – upgrade at Northland completed ¾ Unitholders’ meeting – constitutional changes: provide for AIFRS changes ¾ AIFRS – updated portf
Slide 6: Events – AIFRS
Events – AIFRS ¾ No issue with straightlining rent and incentives ¾ Revaluations resulted in $15.8m unrealised gain for half-year Opening Capex Revaluations 750,000 700,000 650,000 600,000 550,000 500,000 AGAAP AIFRS AIFRS 30-Jun-05 30-Jun-05 31-Dec-05 February 2006 6 6
Slide 7: The Tenant – Warehouses across AUS & NZ
The Tenant – 135 Warehouses across AUS & NZ Sales from Warehouses drive Bunnings Revenue 4,500 500 4,000 450 3,500 400 Operating Revenue ($m) 350 3,000 SMI acquisition EBITA ($m) 300 2,500 250 2,000 BWP established 200 1,500 150 1,000 100 500 50 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 8: The Tenant – recent activity and outlook
The Tenant – recent activity and outlook ¾ FY05 trading performance – $4.1b revenue; ↑ 5.8% on pcp – trading EBITA $417.9m; ↑ 8.6% on pcp Series 3000 Warehouse – trading EBITA/sales 10.3%; vs 10.0% in pcp ¾ 1H06 network – 4 openings (Nerang, Sunbury, Vermont South, Kalgoorlie) Series 5000 Warehouse
Slide 9: The Tenant – 100% occupancy; 9.4 yr ave. lease expiry
The Tenant – 100% occupancy; 9.4 yr ave. lease expiry 24 20 Number of leases 16 12 20 8 11 4 7 6 3 2 0 1 1 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Term to lease expiry (years) ¾ Typical lease features – 5 + 5 + 5 (plus 2 x 5 year options) – annual CPI escalation – 5 year market reviews – WES covenant
Slide 10: BWP Portfolio – properties; geographic spread improving
BWP Portfolio – 52 properties; geographic spread improving Dec 05 VIC 19 NSW/ACT 11 QLD 10 WA 10 ) 26 SA TOTAL 2 521 ) 10 1includes 2 distribution centres and 1 development site ) 19 ) 10 )4)2 ) 41 ) 11 ) 135 BWH Stores ) 18 .1 )8 ) 34 ) 49 BWP – owned stores )2 )1 . 1 BWP development site February
Slide 11: Portfolio – growth through acquisition and revaluation
Portfolio – growth through acquisition and revaluation $m 750 600 450 300 150 0 99 0 1 02 03 04 5 99 0 1 2 03 4 5 0 0 0 0 0 0 0 0 n n n n n n n ec ec ec ec ec ec ec Ju Ju Ju Ju Ju Ju Ju D D D D D D D At cost Revaluations February 2006 11 11
Slide 12: Portfolio – 1 market rent review in FY06
Portfolio – 1 market rent review in FY06 ¾ Rockingham market rent review independently determined in 1H05 Passing Market Uplift Effective rent review % date $000 $000 pa pa Rockingham 956 1,120 +17.2% 16 Aug 05 ¾ Outlook FY07 FY08 FY09 FY10 FY11 Market rent reviews 6 7 22 12 4 February 2006 12 12
Slide 13: Portfolio – revaluation across portfolio
Portfolio – revaluation across portfolio ¾ 12.1% valuation increase on Jun 05 disclosed book value ¾ Weighted average cap rate reduced from 8.3% to 7.9% ¾ Property revaluations – 3 yearly independent valuations – directors’ valuation supported by an independent review will be undertaken on all prope
Slide 14: Portfolio – acquisition and development
Portfolio – acquisition and development ¾ Morley, WA ($11.1m) – 8km north of Perth CBD, adjacent Centro Galleria – 1.8ha site; 9,826m2 retail area – rent $860,000; 7.75% cap rate ¾ Fyshwick, ACT ($3.5m) – 7km southeast of Canberra CBD – adjoining 1ha site to be used for future expansion of BWH – 8%
Slide 15: Portfolio – acquisition and development
Portfolio – acquisition and development ¾ Vermont South, Vic – 21km east of Melbourne CBD – largest BWH to date; total retail area 16,500m2 – 5.3ha site purchased by BWP May 03 ($10.0m) – development fee $13.3m (net of sale of 4,000m2 surplus land for $0.85m) – commenced trading Aug 05; rent $1,750,
Slide 16: Portfolio – Bayswater showroom development
Portfolio – Bayswater showroom development ¾ Background – 30km east of Melbourne CBD – adjacent BWH on Canterbury Rd – 8,200m2 site valued at $1.8m (inc. developed car park) – 2,484m2 GLA ¾ Status – practical completion; estimated cost of construction $2.3m – Clark Rubber leased 1,378m2 tenancy – ne
Slide 17: Portfolio – overview of committed upgrades
Portfolio – overview of committed upgrades ¾ Croydon, Vic ($5.6m) – BWP purchase 1.5ha and sell 0.2ha; peppercorn – additional 3,077m2 retail area; 100 car bays – incremental rent $0.49m pa; yield 8.5% – estimated completion Aug 06 ¾ Cairns, Qld ($0.7m) – BWP purchase 0.2ha for $0.3m – additional 2,
Slide 18: Portfolio – overview of committed upgrades (cont’d)
Portfolio – overview of committed upgrades (cont’d) ¾ Lismore, NSW ($0.4m) – miscellaneous works – capital rentalised at 8.75% – estimated completion Apr 06 ¾ Maribyrnong, Vic ($6.7m) – BWP purchased 3.4ha site in 2001 for $7.1m – 8000 series BWH – environmental issues to be resolved by BGL – 8% acc
Slide 19: Portfolio - prospects for BWP
Portfolio - prospects for BWP ¾ Ex Bunnings – organic rollout of 10 to 14 stores pa ¾ Ex BBC Hardware Ltd (20 acquired by WES via SMI) – 7 purchased by BWP to date – 5 sold by WES on VP basis; more possible – 4 held by WES – 4 sold to third parties ¾ Ex third party vendors (approximately 70) – 1 pur
Slide 20: Capital Management
Capital Management ¾ Overview – borrowings $195.8m – gearing 27.9% ¾ Borrowings – preferred gearing range of 20% to 40% (debt to total assets) – current gearing level lower than desired – weighted average cost 5.7% (excluding margins) – bill facilities with ANZ ($100m), NAB ($100m), WBC ($50m) ¾ Dis
Slide 21: Capital Management – gearing on target
Capital Management – gearing on target 50% 40% Preferred range 30% 20% 10% 0% 01 01 02 02 03 03 04 04 05 05 Ju n ec Ju n ec Ju n ec Ju n ec Ju n ec D D D D D February 2006 21 21
Slide 22: Capital Management – debt actively managed
Capital Management – debt actively managed BWP Hedge Book Overview Dec Jun Dec Jun Dec 03 04 04 05 05 % Debt hedged1 98 95 102 100 90 Swap rates (%) - maximum 6.62 6.62 6.62 6.62 6.62 - minimum 4.97 4.97 4.97 4.97 4.97 1 interest bearing debt ¾ $177m hedged ¾ 5.7% weighted ave rate (exc. margins/fee
Slide 23: Financial Performance – DPU growth
Financial Performance –DPU growth Interim DPU Final DPU 11.96 12.00 11.38 10.5 9.77 10.00 9.56 9.18 6.17 5.87 DPU (cents) 8.00 5.35 7.2 4.86 4.97 4.68 6.00 4.70 4.00 5.79 6.22 5.15 5.51 4.70 4.50 4.80 2.00 2.50 0.00 1 2 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 1Trust commenced trading Sep 98 ¾ 7.4% i
Slide 24: Outlook
Outlook ¾ Acquisition opportunities - ex Bunnings rollout (10 to 14 pa) - ex BBC properties - ex third party owners - New Zealand rollout (target 25) - 3000 Series rollout 4 pa (target) ¾ Rent reviews and revaluations FY06 FY07 FY08 FY09 FY10 Rent reviews 1 6 7 22 12 Revaluations 19 21 15 18 21 Febr
Slide 25: Disclaimer
Disclaimer To the maximum permitted by law, Bunnings Property Management Limited disclaims all liability and responsibility for any direct or indirect loss or damage that may be suffered by any person through relying on anything contained in or omitted from this presentation. February 2006 25 25