Abacus Group · ASX:ABG
Abacus — Abacus Storage King — HY24 Earnings Presentation
32 slides from Abacus's earnings presentation, Feb 16, 2024
Slide 1: HY24 Results Presentation
HY24 RESULTS PRESENTATION 16 FEBRUARY 2024 Artist’s Impression: Storage King Granville, NSW Australia
Slide 2: Agenda
ABACUS STORAGE KING HY24 RESULTS Agenda 01 Introduction and HY24 highlights 02 Finance metrics and capital structure 03 Investment portfolio performance 04 Platform initiatives 05 Outlook & guidance Steven Sewell, Evan Goodridge, Nikki Lawson, Nikki Lawson, Steven Sewell, Managing Director CFO GGM S
Slide 3: Introducing Abacus Storage King
INTRODUCING ABACUS STORAGE KING VISION: To be the undisputed leader in the Self Storage industry by being the most respected, responsive, and recognised owner, operator and manager HY24 Highlights • Sector specialist Self Storage REIT launched 3 August 20232 ABACUS STORAGE KING (ASX:ASK) • Vertical
Slide 4: HY24 Business Metrics
HY24 BUSINESS METRICS TOTAL ASSETS WACR1 GEARING NET TANGIBLE ASSETS NET ZERO $3.1bn 5.67% 29.3% $1.52ps 2030 10bps on FY23 ESTABLISHED2 ESTABLISHED2 FUNDS FROM FFO PER SECURITY DISTRIBUTION PER OCCUPANCY REVPAM OPERATIONS (FFO) SECURITY 90.4% $324 $37.6m 3.0cps 3.0cps 10bps on HY23 4.8% on HY
Slide 5: HY24 Financial Metrics
Image placeholder – new filtered photos to be inserted HY24 FINANCIAL METRICS EVAN GOODRIDGE Storage King Avondale, QLD Storage King Gregory Hills, NSW Australia
Slide 6: HY24 Operating Earnings Summary
HY24 OPERATING EARNINGS SUMMARY Strong revenue growth and attractive operating margin of 66% Performance metrics ($m)1 HY24 HY235 Change % Storage revenue 96.4 87.4 10.3 HY24 Performance Leased tenancy and fee revenue (net) 6.82 6.2 9.7 • Growth in operating revenue of 10.3%, driven by: Operating re
Slide 7: Capital Management
CAPITAL MANAGEMENT Significant capacity to fund growth initiatives NTA1 ASK total assets Acquisition capacity2 Avg. cost of drawn debt3 Gearing4 Debt term to maturity $1.52ps $3.1bn ~$250m 3.3% 29.3% 3.2yrs Debt expiry profile Interest rate hedging – Hedging profile expiry drawn debt $m Drawn bank d
Slide 8: Balance Sheet
BALANCE SHEET Strong balance sheet with the ability to deliver continued growth 31 December 2023 Investment properties $2,691.4m PP&E and equity accounted investments $53.1m Growth drivers Goodwill and intangibles $72.5m Established 69% Organic growth from structural demand drivers. Cash and cash eq
Slide 9: Valuation Update
Storage StorageKing KingNew NewLynn, Lynn,New NewZealand Zealand VALUATION UPDATE Resilient property values supported by income growth and structural sector drivers ABG assets acquired at de-staple $21m $48m $2,691m $32m $84m $71m $2,531m 30 June 2023 Acquisitions Capex Market income Cap rate 31 Dec
Slide 10: Portfolio Operating Performance
Image placeholder – new filtered photos to be inserted PORTFOLIO OPERATING PERFORMANCE NIKKI LAWSON Storage StorageStorage King KingEllenbrook, King Robina, Mitcham, QLD VIC WA Australia
Slide 11: Self Storage – Positive Drivers
SELF STORAGE – POSITIVE DRIVERS A range of demand and supply drivers support sector resilience Structural Cyclical Population Emerging category Rise of Housing Housing Discretionary growth e-commerce density turnover spending Sustained population growth 0.21 sqm1 Self Storage per Supply chain challe
Slide 12: HY24 Revenue Growth
HY24 REVENUE GROWTH The established portfolio has consistently delivered RevPAM growth in recent years Growth in established portfolio RevPAM – structurally higher post-COVID due to increasing consumer awareness1 Rental Rate RevPAM CAGR (HY18-HY24) $ Pre-COVID COVID Post-COVID 4.7% p.a. 400 CAGR +3.
Slide 13: HY24 Portfolio Snapshot
HY24 PORTFOLIO SNAPSHOT Stabilising portfolio and development sites account for 16% of property asset value Operating Stores Segment Established portfolio Acquisition portfolio Stabilising portfolio Development sites Mature stores acquired post Not actively operating Definition Mature stores open at
Slide 14: Store Operating Trends by Region – Established
STORE OPERATING TRENDS BY REGION – ESTABLISHED WA and SA fastest growing regions 1 NSW 23% HY23 RevPAM $ HY24 RevPAM $ VIC 20% NZ 18% Share of HY24 QLD 15% Revenue ACT 11% 358 355 347 WA 11% 327 324 322 321 317 310 309 SA 2% 307 296 288 265 253 229 NSW 25% VIC 19% NZ 17% Share of HY24 QLD 14% Valuat
Slide 15: HY24 Acquisitions
Storage King Coburg North, VIC Australia HY24 ACQUISITIONS Acquisition opportunities in a fragmented sector support portfolio growth • $161 million invested in HY24 acquisitions including $84 million acquired as part of the de-staple from ABG, $67 million on three operating stores and $10 million on
Slide 16: Development Pipeline
DEVELOPMENT PIPELINE Set to deliver 181 developments (110,000 NLA) and 5 expansions (15,500 NLA) in the short to medium term New store projects Expansion of existing stores Spend to date Cost to complete2 Est. completion value NLA Cost to complete NLA $211m $264m $564m 110,000sqm $39m 15,500sqm NLA
Slide 17: Platform
Image placeholder – new filtered photos to be inserted PLATFORM NIKKI LAWSON Storage Storage Storage King King St Lukes, Clayton, KingNew Epping, VIC Zealand
Slide 18: Storage King – Leading Platform
STORAGE KING – LEADING PLATFORM Focused approach to long term brand management BRANDED SEARCH1 TOTAL ENQUIRIES2 CUSTOMER NPS3 rated most recognised Self Storage brand in Australia #1 IN CATEGORY +4% 66 Length of tenant stay has been gradually increasing since 20164 100,000+ 60.0% 197 Total units4 55
Slide 19: Platform Optimisation
PLATFORM OPTIMISATION Operating margin enhancement potential over the medium to longer term Market Share by NLA highlights the Economies of scale fragmentation1 ASK is well placed to capitalise on industry consolidation and achieve economies of scale. Opportunity for platform growth through addition
Slide 20: ASK ESG Initiatives to Drive Income and Value
ASK ESG INITIATIVES TO DRIVE INCOME AND VALUE Net zero commitment by 20301 1. Scope 1 & 2 greenhouse gas emissions for ASK owned stores assuming access to green power remaining a feasible option, if required. Abacus Storage King | HY24 Results Presentation 20
Slide 21: Outlook & Guidance
OUTLOOK & GUIDANCE STEVEN SEWELL Storage King Epping, VIC Australia
Slide 22: Outlook & Guidance
Storage King Prestons, NSW Australia OUTLOOK & GUIDANCE Outlook Underpinned by our multi-pronged growth strategy, namely: • Organic – positive sector drivers, supported by sector leading SK operating platform • Acquisitions – fragmented sector provides acquisition opportunities • New store creation
Slide 23: Appendices
APPENDICES STATUTORY EARNINGS RECONCILIATION SLIDE 24 FFO EARNINGS SUMMARY SLIDE 25 OPERATING PROFIT RECONCILIATION SLIDE 26 BALANCE SHEET ALLOCATION SLIDE 27 CAPITAL METRICS SLIDE 28 INVESTMENT PORTFOLIO METRICS SLIDE 29 STORAGE KING NETWORK SLIDE 30 GLOSSARY SLIDE 31 IMPORTANT INFORMATION SLIDE 32
Slide 24: Statutory Earnings Reconciliation
STATUTORY EARNINGS RECONCILIATION Performance metrics ($m) HY24 TERM DEFINITION Net profit attributable to ASK securityholders 0.4 Fair value adjustments 41.3 FFO is in line with the PCA’s definition and comprises net profit/loss after tax attributable to stapled security holders, calculated in Depr
Slide 25: FFO Earnings Summary
FFO EARNINGS SUMMARY Performance metrics ($m)1 HY24 HY233 Comments Rental income 96.8 87.5 Increase by $9.3m ($5.1m from acquisitions4 & stabilising assets) Merchandise income 1.9 2.2 Income from merchandise sales at ASK owned stores Fee income 8.9 8.8 Fees derived from revenue of 82 licensed stores
Slide 26: Operating Profit and FFO Reconciliation
OPERATING PROFIT AND FFO RECONCILIATION Performance metrics ($m)1 HY24 Comments Storage revenue 96.4 Comprises $94.5m rental income associated with stores and $1.9m of merchandise income Comprises $2.3m rental income associated with commercial tenancies, $8.9m fee income less $4.4m Leased tenancy an
Slide 27: HY24 Balance Sheet Allocation
HY24 BALANCE SHEET ALLOCATION $ 3.1bn 80% 31 December 2023 Established stores Total Assets $1,888m Acquisition stores $402m OPERATING STORES $2.5bn Stabilising stores $200m Un-zoned council land $147m 8% Council approved $15m DEVELOPMENT STORES $0.2bn Under construction $88m Listed securities $173m
Slide 28: Capital Metrics
CAPITAL METRICS Capital management metrics as at 31 December 2023 Comments Total bank debt facilities $1,250m Increased and extended banking facility by $250 million to $1.25 billion Total bank debt drawn $961m Term to maturity 3.2yrs Interest rate hedging 72% Weighted average hedge maturity 2.6yrs
Slide 29: Investment Portfolio Metrics
INVESTMENT PORTFOLIO METRICS % NLA Breakdown by State Performance metrics Australia New Zealand HY24 HY23 NSW 28% No. of assets 120 16 136 127 VIC 20% QLD 18% NLA (sqm) 538,489 77,666 616,155 570,205 NZ 13% Occupancy1 (%) 89.9 92.7 90.4 90.5 WA 11% Rental rate1 ($ psm) 355 374 358 341 ACT 8% RevPAM1
Slide 30: Storage King Network
STORAGE KING NETWORK1 198 operating stores across Australia & New Zealand 116 82 1.1 million Total land area (sqm) on REGIONAL QLD Abacus Storage King stores 3 LICENSED WA QLD 22 21 SUNSHINE COAST BRISBANE 14 14 1 139 13 5 GOLD COAST 7 4 Assets owned by Abacus Storage King SA 116 operating stores 1
Slide 31: Glossary
GLOSSARY TERM DEFINITION TERM DEFINITION ABG Abacus Group NLA Net lettable area AIFRS Australian Equivalents to International Financial Reporting Standards NTA Net tangible assets ASK Abacus Storage King NPS Net promoter score ASX Australian Securities Exchange PCA Property Council Australia CAGR Co
Slide 32: Important Information
IMPORTANT INFORMATION The information provided in this document is general, and may not be suitable for the specific purpose of any user of this document. It is not financial advice or a recommendation to acquire Abacus Storage King securities (ASX: ASK). Abacus Storage King believes that the inform