Property for Industry Limited · NZX:PFI
Property for Industry — FY2013 Earnings Presentation
27 slides from Property for Industry's earnings presentation, Feb 17, 2014
Slide 1: Property For Industry 2013 Annual Results Briefing
PROPERTY FOR INDUSTRY 2013 ANNUAL RESULTS BRIEFING
Slide 2: Agenda
AGENDA 1. Highlights 2. Portfolio 3. 2013 Annual Results 4. Market & Outlook 5. Strategy 6. Questions 7. Appendicies PROPERTY FOR INDUSTRY 2013 201 3 A N N U A L R E S U L T S B R I E F I N G 2
Slide 3: 1. Highlights
1. HIGHLIGHTS 1. HIGHLIGHTS
Slide 4: Highlights
HIGHLIGHTS • Successful merger with Direct Property Fund Limited (DPF); • Profit after tax for the year increased to $40.5 million equating to 12.79 cents per share; • Distributable profit of 7.26 cents per share 9.3% ahead of the prior year; • Fourth quarter final dividend of 2.01 cents per share,
Slide 5: 2. Portfolio
2. PORTFOLIO
Slide 6: Portfolio Snapshot
PORTFOLIO SNAPSHOT 31 December 2013 31 December 2012 Number of properties 83 50 Number of tenants 136 86 Contract rent $65.4m $32.6m Occupancy 97.1% 97.4% Weighted average lease term 5.31 years 4.80 years PROPERTY FOR INDUSTRY 2013 201 3 A N N U A L R E S U L T S B R I E F I N G 6
Slide 7: Rental Income
RENTAL INCOME • DPF merger contributed 55.8% uplift in rental income; • Acquisition and disposal activity contributed a net $2.2M uplift in rental income; • 16 new leases agreed over more than 52,000 sqm of space; • 48 rent reviews conducted resulting in an average annual uplift of 2.4% on merged co
Slide 8: Investment Properties
INVESTMENT PROPERTIES $000’s Carrying value as at 31 December 2012 $382,180 Additions, disposals, capital expenditure and prepayments $439,782 Valuation gain – DPF portfolio 30 June 2013 (3 mths) $7,553 Valuation gain – DPF portfolio 31 December 2013 (6 mths) $2,146 Valuation gain – PFI portfolio 31
Slide 9: Lease Expiry Profile
LEASE EXPIRY PROFILE Vacancies % 2014 Expiries Tenant % 18 Ron Driver Place 1.4% 212 Cavendish Drive Toll Logistics 1.2% 2-6 Niall Burgess Road 0.5% Carlaw Gateway Precinct Wilson Parking 0.9% 85 Cavendish Drive 0.3% 9 Nesdale Avenue Brambles 0.9% 50 Parkside Road 0.2% 229 Dairy Flat H’way Massey Un
Slide 10: 3. 2013 Annual Results
3. 2013 ANNUAL RESULTS
Slide 11: Distributable Profit
DISTRIBUTABLE PROFIT • Distributable profit per share up 0.62 cents per share (cps) or 9.3% • Growth in operating revenue outweighed growth in operating expenses • Effective current tax rate down 3% due to one off tax deductions associated with the merger • 2013 dividend of 7.20 cps, 2013 dividend h
Slide 12: Net Tangible Assets
NET TANGIBLE ASSETS • Net tangible assets (NTA) per share up 9.5 cps or 8.4%, highest recorded NTA since 2008 • DPF merger contributed 2.4 cps • Investment property revaluations on merger and at year end contributed 4.8 cps • Increase in the fair value of derivatives of 2.0 cps also positive • Chang
Slide 13: Treasury
TREASURY • Current and forward starting hedging of $378.5M at an average rate of 3.8% for an average duration of 2.3 years to provide some relief from rising interest rates; • 24.7% reduction in weighted average cost of debt, 5.5% as at 31 December 2013 (2012: 7.3%); • Loan to value of 37.4% at year
Slide 14: 4. Market & Outlook
4. MARKET & OUTLOOK - @ °
Slide 15: Market & Outlook
MARKET & OUTLOOK • Continued optimism in the industrial property market built upon the general improvement in the wider economy; • Investor activity remains high, chasing quality stock which has resulted in strong transactional evidence for prime industrial property; • Leasing enquiry up; • Outlook
Slide 16: 5. Strategy
5. STRATEGY
Slide 17: Strategy
STRATEGY • PFI’s strategy is to invest in quality industrial property in New Zealand’s main urban centres; • The company will drive shareholder returns by: • Managing the vacancy and upcoming lease expiries; • Consider the development of existing expansion land and repositioning of properties as ten
Slide 18: Strategy – Portfolio Management
STRATEGY – PORTFOLIO MANAGEMENT • Leasing: increased scale and portfolio diversification bought about by the merger puts PFI in an excellent position to take advantage of strengthening leasing and investment activity as the industrial property sector continues to improve; • Accretive capital expendi
Slide 19: Strategy – Divestment
STRATEGY – DIVESTMENT • Strengthening property market to potentially provide the opportunity to divest non core assets, examples being: • Non industrial – current portfolio composition is ~80% industrial and ~20% other, focus on increasing industrial weighting over time; • Vacant / obsolete / low pe
Slide 20: Strategy – Acquisition
STRATEGY – ACQUISITION • Generic industrial remains desirable: • Prime opportunities > fully valued; • Secondary opportunities > better growth potential but higher risk. • Non generic industrial also provides better growth potential: • Higher yielding; • Income, capital and WALT accretion; • High qu
Slide 21: 6. Questions
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Slide 22: 7. Appendices
7. APPENDICES
Slide 23: Appendix 1: Financial Performance
APPENDIX 1: FINANCIAL PERFORMANCE For the year ended (audited, $000) December 2013 December 2012 Change Rental income 47,850 29,214 18,636 Interest and management fee income 230 210 20 Total operating revenue 48,080 29,424 18,656 Interest expense and bank fees (12,869) (8,103) (4,766) Management fee
Slide 24: Appendix 2: Distributable Profit
APPENDIX 2: DISTRIBUTABLE PROFIT For the year ended (audited, $000) December 2013 December 2012 Change Profit after taxation 40,512 26,932 13,580 Adjusted for Unrealised fair value change in investment properties (12,326) (12,302) (24) Gains on disposals of investment properties (47) (1,059) 1,012 T
Slide 25: Appendix 3: Financial Position
APPENDIX 3: FINANCIAL POSITION As at (audited, $000) December 2013 December 2012 Change Investment properties 841,841 382,180 459,661 Goodwill 29,086 - 29,086 Other assets 6,093 2,432 3,661 Total assets 877,020 384,612 492,408 Borrowings 315,190 114,200 200,990 Deferred tax liabilities 12,404 7,881
Slide 26: Appendix 4: Treasury
APPENDIX 4: TREASURY December 2013 December 2012 Facilities Drawn (excluding overdraft) $315.190M $114.200M Facilities limit $350.000M $150.000M Facilities headroom $34.180M $35.800M Facilities term (average) 2.5 years 3.1 years Facilities banks ANZ, BNZ, CBA, Westpac ANZ, CBA Covenants Gearing (pol
Slide 27: Disclaimer
DISCLAIMER The information included in this presentation is provided as at 17 February 2014. Neither Property For Industry Limited (PFI) nor PFIM Limited (PFIM), the manager of PFI, guarantee the repayment of capital or the performance referred to in this presentation. Past performance is not a reli