Mirvac Group · ASX:MGR
Mirvac — FY2005 Earnings Presentation
50 slides from Mirvac's earnings presentation, Aug 19, 2005
Slide 1: 2005 Annual Results
2005 ANNUAL RESULTS Mirvac Group Annual Results August 2005 FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES 1 Slide 1
Slide 2: Managing Director Greg Paramor
2005 ANNUAL RESULTS Managing Director FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT Greg Paramor INVESTMENT PROPERTIES 2 Peppers Anchorage, Port Stephens Slide 2 Latitude, Lavender Bay
Slide 3: Agenda
Agenda 2005 • Overview ANNUAL RESULTS • FY05 Results • Divisional Strategy • Market Outlook • Summary FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES 3 Slide 3
Slide 4: Overview
Overview 2005 • Integration of James Fielding Group now complete • Challenging twelve months as residential market slowed ANNUAL RESULTS • Premium brand in residential projects • Strong residential & non-residential development pipeline • Expanding recurrent earnings through investments and funds ma
Slide 5: Platform for Growth
Platform for Growth 2005 Mirvac Group Funds Investment Development Hotels ANNUAL RESULTS Management -Property Trust(s): - Residential - 3 owned: - Listed Trusts Commercial - The Como (18,697 lots under control) - Unlisted Funds Industrial - Sydney Marriott - Retail - Debt Funds Retail - Cairns Inter
Slide 6: Financial Highlights
Financial Highlights 2005 • Net profit of $233.3m – $2.3m above the May 05 guidance • Distribution of 33.80 cents - 5% increase from FY04 ANNUAL RESULTS • Retained profits - currently $127.7m • Increase in total assets from $4.3bn to $5.5bn • Asset revaluation of $59.3m across the investment portfol
Slide 7: Tim Regan, Chief Financial Officer
2005 ANNUAL RESULTS Chief Financial Officer FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT Tim Regan INVESTMENT PROPERTIES 7 Slide 7
Slide 8: Key Financial Outcomes
Key Financial Outcomes 2005 FY05 FY04 Change ANNUAL RESULTS EPS 29.86c 36.67c (18.6%) DPS 33.80c 32.20c 5.0% NTA per security $3.26 $3.12 4.5% Total assets $5,524m $4,306m 28.3% FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES 8 Slide 8
Slide 9: Profit and Loss
Profit and Loss 2005 FY05 FY04 Change $m $m ANNUAL RESULTS Total revenue1 1,468.7 1,400.4 4.9% EBITDA 373.7 392.8 (4.9%) Net profit after tax 233.3 252.7 (7.7%) Total distributions 266.4 222.9 19.5% Retained earnings 127.7 157.3 (18.8%) FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT 1. Includes share
Slide 10: Distribution Growth
Distribution Growth 2005 266.4 250 222.9 ANNUAL RESULTS 188.4 200 $millions 161.7 150.7 150 100 50 FUNDS MANAGEMENT FY01 FY02 FY03 FY04 FY05 HOTEL MANAGEMENT Payout ratio DEVELOPMENT 95% 95% 83% 88% 114% INVESTMENT PROPERTIES 10 Slide 10
Slide 11: Net Profit after Tax by Division
Net Profit after Tax by Division 2005 FY05 % FY04 % $m split $m split Investments1 151.4 64.9 135.7 53.7 ANNUAL RESULTS Developments 85.4 36.6 116.0 45.9 Hotels 11.8 5.0 9.0 3.6 Funds Management2 5.1 2.2 - - Unallocated (20.4) (8.7) (8.0) (3.2) Net profit after tax 233.3 252.7 FUNDS MANAGEMENT HOTEL
Slide 12: Net Profit after Tax by Entity
Net Profit after Tax by Entity 2005 Company Company $76.9m1 $126.9m1 ANNUAL RESULTS 33% 50% Trust Trust $156.4m $125.8m 67% 50% FY05 FY04 FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES 1. After consolidation adjustments 12 Slide 12
Slide 13: Balance Sheet
Balance Sheet 30 Jun 05 30 Jun 04 Change 2005 $m $m Assets Investments 2,917 2,435 19.8% ANNUAL RESULTS Development 1,899 1,372 38.4% Hotels 165 160 2.5% Funds Management 443 - - Other 100 339 (70.5%) Total assets 5,524 4,306 28.3% Liabilities Borrowings 2,085 1,654 26.1% Other 458 412 11.2% Total l
Slide 14: Debt Summary
Debt Summary 2005 FY05 FY04 Total net debt $2,029m $1,322m ANNUAL RESULTS Total hedged 77.0% 86.8% Fixed interest maturity 4.1 yrs 3.9 yrs Average borrowing rate 6.33% 6.30% (including margin) Gearing1 - Group 37.1% 33.3% Gearing1 - Trust 22.3% 20.0% FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT 1.
Slide 15: Introduction of AIFRS
Introduction of AIFRS 2005 • Required to adopt AIFRS for the year ended 30 June 06 • First reporting period is half year to 31 December 05 ANNUAL RESULTS • The adoption of AIFRS will not impact: • net cash flows • business fundamentals • strategic direction • Key impacts to profit & loss statement:
Slide 16: Impact of AIFRS
Impact of AIFRS 2005 DESCRIPTION $m FY05 Net Profit under AGAAP 233.3 ANNUAL RESULTS Depreciation of owner occupied properties (9.0) Write-back of goodwill amortisation 5.1 Cash distributions on employee EIS securities (2.3) Investment property revaluation increment 59.2 Reversal of UIG53 profits (3
Slide 17: Nicholas Collishaw, Investment Division
Holden HQ, Victoria 2005 ANNUAL RESULTS FUNDS MANAGEMENT HOTEL MANAGEMENT Investment Division DEVELOPMENT INVESTMENT PROPERTIES 17 Nicholas Collishaw Slide 17
Slide 18: Investments Highlights
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S Highlights 2005 • Investment division net profit after tax of $151.4m1, an 11.6% increase on FY04 • Investment portfolio grown to $2.9bn through acquisition of ANNUAL RESULTS James Fielding, internal developments and revaluations • Ac
Slide 19: Diversification by Asset Value
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S Diversification by Asset Value 2005 $583m Growth in Investment Portfolio Hotel/ LPT/ Car SA Infra Parking 1% ANNUAL RESULTS 6% 3% VIC 21% Retail 26% NSW 56% QLD 14% Indust/Other Office 10% 55% ACT 8% FUNDS MANAGEMENT HOTEL MANAGEMENT
Slide 20: Commercial and Industrial Portfolio
2005 ANNUAL RESULTS Commercial FUNDS MANAGEMENT and HOTEL MANAGEMENT Industrial Portfolio DEVELOPMENT INVESTMENT PROPERTIES 20 Slide 20 189 Grey St. Southbank, Qld
Slide 21: Commercial and Industrial Highlights
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S 2005 Commercial and Industrial Highlights • Commercial and industrial portfolio net income increased 3.7% (like for like) ANNUAL RESULTS • Stable commercial portfolio occupancy at 97.2% • Improving industrial portfolio occupancy at 99
Slide 22: Commercial and Industrial Development Update
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S Commercial and Industrial Development Update Nexus Industry Park, Liverpool 2005 -15 year pre-commitment to Atlas Holdings for 13,000 sqm – construction commenced - Commitments from major users likely to fill Park ANNUAL RESULTS in th
Slide 23: Retail Portfolio
Greenwood Plaza , North Sydney 2005 ANNUAL RESULTS FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES Retail Portfolio 23 Slide 23
Slide 24: Retail Performance
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S 2005 Retail Performance Neighbourhood and regional centres owned1 16 Occupancy 99.1% ANNUAL RESULTS Like for like actual net income has grown 5.4% MAT growth - total centres 2.5% Speciality sales2 $8,415 per sqm MAT growth - specialty
Slide 25: Retail Leasing and Development Highlights
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S Retail Leasing and Development Highlights Currently 5 centres undergoing extension / development and 4 2005 centres undergoing development planning Waverley Gardens ANNUAL RESULTS • Stage 1 works 95% complete and finished areas fully
Slide 26: Retail Leasing and Development Highlights
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S 2005 Retail Leasing and Development Highlights Orion Town Centre (Stage 1) • Piling works commenced • Leasing commenced with scheduled opening early 2007 ANNUAL RESULTS Stanhope Gardens (Stage 2) • DA lodged for new DDS and specialtie
Slide 27: Significant Current and Future Development Pipeline
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S Significant Current and Future Development Pipeline Est. Value 2005 Projects Status ($m) Waverley Gardens I 52 Estimated completion Sept 2005 Waverley Gardens II 25 Estimated completion end 2007 Hinkler Central - Bundaberg 42 Construc
Slide 28: Outlook
I N V E S T M E N T S I N V E S T M E N T S I N V E S T M E N T S 2005 Outlook • Portfolio in very good shape: WALE: commercial 3.9 years, retail - 6.1 years, industrial - 5.0 years ANNUAL RESULTS • Significant development projects – retail, commercial and industrial – in place over next 5 years • I
Slide 29: Hotels Division
2005 ANNUAL RESULTS Hotel Division FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES Slide 29 Hotels Division 29
Slide 30: Hotels Highlights
HOTELS HOTELS HOTELS HOTELS HOTELS 2005 Highlights • Profit after tax increase of 30.2% to $11.8m • Mirvac Hotels and Resorts awarded Best Hotels Accommodation Chain in Australia, New Zealand and South Pacific1 ANNUAL RESULTS • Additions to management portfolio: - Quay West Resort Bunker Bay, WA - S
Slide 31: Total number of rooms 2,750
HOTELS HOTELS HOTELS HOTELS HOTELS 2005 WA Owned 6% 15% NZ NSW 7% 48% Managed ANNUAL RESULTS 46% Qld 14% Strata 39% VIC 25% Total number of rooms 2,750 FUNDS MANAGEMENT Management Types Profit by Region HOTEL MANAGEMENT DEVELOPMENT (number of rooms) INVESTMENT PROPERTIES 31 Slide 31
Slide 32: Hotels Outlook
HOTELS HOTELS HOTELS HOTELS HOTELS 2005 Outlook • Continue to expand hotels under management from 2,750 to more than 3,300 rooms ANNUAL RESULTS • Open The Sebel Trinity Wharf Tauranga (NZ), Sea Temple Resort & Spa Port Douglas, The Sebel Harbour Lights Cairns, and Quay West Resort Magenta Shores. •
Slide 33: Funds Management
2005 ANNUAL RESULTS FUNDS MANAGEMENT Funds Management HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES 33 Slide 33
Slide 34: Funds Management Highlights
F U N DS MANAGEMENT F U N DS M A N A G E M E N T Highlights 2005 • Net profit after tax of $5.1m (6 months to June 2005) • Funds under management increased by 66% to $2.5bn1 • JF Meridian Trust assets increased by 41% to $924m ANNUAL RESULTS • Launched: – JF US Industrial Trust – James Fielding Infr
Slide 35: Funds Under Management
F U N DS M A N A G E M E N T F U N DS M A N A G E M E N T 2005 Funds Under Management JF Direct Domaine 10% JFUSIT PFA 3% 7% 5% JF Capital ANNUAL RESULTS 4% PJF 9% ARF HCP 1% 13% JF Infra 10% JFM 38% FUNDS MANAGEMENT HOTEL MANAGEMENT $2.5bn1 DEVELOPMENT INVESTMENT PROPERTIES 1. After adjusting for j
Slide 36: Funds Management Outlook
F U N DS M A N A G E M E N T F U N DS M A N A G E M E N T Outlook 2005 • Funds under management forecast to increase to $3.5bn • Continue to launch selected new funds in areas of infrastructure, property debt and unlisted property funds ANNUAL RESULTS • Provide new sources of third party capital for
Slide 37: Development Division
Ephraim Island, QLD 2005 ANNUAL RESULTS FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES Slide 37 Development Division 37
Slide 38: Major Developments - NSW
DEVELOPMENT DEVELOPMENT DEVELOPMENT Major Developments - NSW Epica, Chatswood 2005 Acquired: Aug 1998 Total project value: $170m Project period: 2003 – 2005 Total lots: 228 ANNUAL RESULTS Magenta Shores, Magenta Acquired: Sept 2002 Total project value: $530m Project period: 2004 – 2010 Total lots: 5
Slide 39: Major Developments - QLD
DEVELOPMENT DEVELOPMENT DEVELOPMENT Major Developments - QLD Waterline, Bulimba 2005 Acquired: Jun 2002 Total project value: $138m Project period: 2004 – 2008 ANNUAL RESULTS Total lots: 144 Ephraim Island, Gold Coast1 Acquired: Nov 2002 Total project value: $545m Project period: 2003 – 2008 Total lo
Slide 40: Major Developments - VIC
DEVELOPMENT DEVELOPMENT DEVELOPMENT Major Developments - VIC Beacon Cove, Port Melbourne1 2005 Acquired: 1995 Total project value: $130m (Stage 2) Project period: 2003 – 2006 (Stage 2) Total lots: 108 (Stage 2) ANNUAL RESULTS Yarra’s Edge - T5, Docklands Acquired: Mar 2002 Total project value: $191m
Slide 41: Major Developments - WA
DEVELOPMENT DEVELOPMENT DEVELOPMENT Major Developments - WA Peninsula, Burswood1 2005 Acquired: Apr 2003 Total project value: $800m+ Project period: 2002 – 2015 Total lots: 1,000+ ANNUAL RESULTS Eden Springs, Mandurah Acquired: Aug 2003 Total project value: $14m+ Project period: 2003 – 2006 Total lo
Slide 42: Major Developments - NSW Housing
DEVELOPMENT DEVELOPMENT DEVELOPMENT Major Developments – NSW Housing Mornington, Holsworthy 2005 Acquired: Nov 2002 Total project value: $90m Project period: 2002 – 2007 Total lots: 255 ANNUAL RESULTS Glenfield Road, Casula Acquired: Jun 2001 Total project value: $250m Project period: 2001 – 2008 To
Slide 43: Development Revenue
DEVELOPMENT DEVELOPMENT DEVELOPMENT Development Revenue Settlements FY 05: 2005 • House & land lots – 1,687 • Medium density lots - 480 WA 9% WA VIC 17% VIC NSW Devel ANNUAL RESULTS 25% 23% 32% NSW Devel 19% QLD QLD 13% 15% NSW Housing NSW Housing 24% 23% FUNDS MANAGEMENT HOTEL MANAGEMENT FY05 - $1,
Slide 44: Lots Under Control
DEVELOPMENT DEVELOPMENT DEVELOPMENT Lots Under Control Forecast revenue from lots currently 2005 Total No. of Houses/Land - 14,150 Total No. of Med. Density - 4,547 controlled – $8.5bn1 over 10 years Total No. of Lots 18,697 WA ANNUAL RESULTS WA $1.4bn 5,210 VIC NSW NSW $1.5bn 7,948 $4.2bn VIC 3,223
Slide 45: Development Outlook
DEVELOPMENT DEVELOPMENT DEVELOPMENT Outlook 2005 • Focus on major integrated developments ANNUAL RESULTS • Expand number of lifestyle developments • Residential sales pipeline – exchanged contacts of $877 million (at 30 June) • Expanded non-residential development team with mandate to acquire develo
Slide 46: Market Outlook
2005 ANNUAL RESULTS MARKET OUTLOOK FUNDS MANAGEMENT HOTEL MANAGEMENT DEVELOPMENT INVESTMENT PROPERTIES Slide 46 Market Outlook 46
Slide 47: Residential – Macro Environment Favourable
MA R K E T O U T LOOK M A R K E T O U T L O O K Residential – Macro Environment Favourable 2005 • Interest rates on hold • International migration – close to record high ANNUAL RESULTS • Labour market – Wages growth strong (+5%) – Unemployment low (5%) – Participation rate record high • Cost pressur
Slide 48: Residential – Market Environment Stabilised
MA R K E T O U T LOOK M A R K E T O U T L O O K Residential – Market Environment Stabilised 2005 • Approvals – Houses – back on long-term trend ANNUAL RESULTS – Apartments – still below long-term trend • Home lending rose through 2005 • First home buyers returning to market • Vacancy rates five-year
Slide 49: Non-Residential
MA R K E T O U T LOOK M A R K E T O U T L O O K Non - Residential 2005 • Retail and industrial sector to remain strong • Office sector recovering ANNUAL RESULTS • Hotels strong on back of improving tourism sector • Strong competition for assets • Yields to remain firm • Rental growth positive across
Slide 50: Summary
Summary 2005 • Grow recurrent earnings • Leverage off integrated property platform ANNUAL RESULTS • Maintain position as leading residential brand in Australia • Continue to optimise MPT’s portfolio • Experienced and focused management team in place • Strong pipeline of assets under control FUNDS MA