Mirvac Group · ASX:MGR
Mirvac — H1 2004 Earnings Presentation
39 slides from Mirvac's earnings presentation, February 2004
Slide 1: Key Points
Interim Results 2003 Key Points MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • Net Profit for six months to December 2003 of $117m represents an increase of 16.5% on previous period • Increase in distribution for six months to December 2003 of 15.6% to 15.9c • Investment Division net profit in
Slide 2: Securities Performance
Interim Results 2003 Securities Performance MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Total Returns for the Period Ending Dec. 2003: One Two Three Year Years Years MIRVAC GROUP 11.9% 26.7% 45.0% Property Leaders Accum. Index 7.5% 22.1% 37.8% S&P/ASX 200 Property Accum. Index 8.8% 21.6% 39.4
Slide 3: Key Financial Outcomes
Interim Results 2003 Key Financial Outcomes MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec Dec 2003 2002 EPS 17.23c 16.16c + 6.6% DPS 15.90c 13.75c +15.6% NTA per Security $3.02 $2.79 + 8.2% Total Assets $4,028.0m $3,213.0m +25.4% i n t e r i m
Slide 4: Trust
Interim Results 2003 Trust MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 Total Assets $2,187m $1,942m Interest Bearing Debt $499m $512m Gearing 22.8% 26.4% Net Profit $66.9m $57.0m Percentage of Total 57.2% 56.8% i n t e r i m
Slide 5: Corporation
Interim Results 2003 Corporation MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 Total Assets $1,841m $1,271m Interest Bearing Debt $1,081m $550m Exchanged Contracts $812m $1,085m Net Profit after tax $50.1m $43.4m Percentage of Total 42.8% 43.2% i n t e r i m
Slide 6: Net Profit After Tax and Distributions
MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Interim Results 2003 125 $117.0 $100.4 100 $90.4 $millions $75.0 75 $70.3 Distributions Paid / Payable Six Months to December $108.3 50 100 $85.7 $79.9 25 75 $74.7 $64.2 1999 2000 2001 2002 2003 $millions 6 months to December 50 Net Profit After Tax
Slide 7: Profit & Loss
Interim Results 2003 MIRVAC GROUP Profit & Loss r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 $m $m Revenue from $691.4 $548.1 Ordinary Activities EBIT $173.0 $139.5 Net Profit $117.0 $100.4 After Tax Total Distributions $108.3 $85.7 Retained Earnings $128.3 $92.4 i n t e r i m
Slide 8: Distribution Analysis as at December 2003
Interim Results 2003 Distribution Analysis as at December 2003 MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 cps cps Franked Income 6.36c 4.03c Tax Deferred 3.34c 4.37c Taxable 6.20c 5.35c Distribution for the half 15.90c 13.75c Franking Credit 2.73c 1.73c Total Grossed Up V
Slide 9: Balance Sheet
Interim Results 2003 Balance Sheet MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 $m $m Assets Investments 2,226.3 1,877.0 Development 1,620.8 1,162.4 Hotels 152.2 151.8 Other 28.7 21.8 Total Assets 4,028.0 3,213.0 Liabilities Borrowings 1,580.1 1,061.6 Other 355.5 386.5 Tota
Slide 10: Cash Flow
Interim Results 2003 Cash Flow MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 Source of Funds $m $m New Capital 28.1 4.0 Net Borrowings 324.9 276.3 Receipts from Customers 633.3 636.5 986.3 916.8 Application of Funds Hotel Division Costs 41.4 39.2 Investment Division Costs 32
Slide 11: Divisional Net Profit After Tax
Interim Results 2003 Divisional Net Profit After Tax MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 $m $m Investment $66.6 $57.3 + 16.3% Development $45.4 $43.0 + 5.6% Hotels $5.8 $5.6 + 2.7% i n t e r i m
Slide 12: Investment Division
Interim Results 2003 Investment Division MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 $m $m Total Assets 2,226.3 1,877.0 EBIT 82.4 70.9 Interest 15.0 13.6 Profit Before Tax 67.4 57.3 i n t e r i m Profit After Tax 66.6 57.3
Slide 13: Development Division
Interim Results 2003 Development Division MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 Total Assets $1,620.8m $1,162.4m Sales Revenue $534.2m $420.5m EBIT $86.0m $68.7m EBIT Margin on cost 18.6% 19.5% Interest $26.7m $11m Net Profit After Tax $45.4m $43.0m Settlements# Hous
Slide 14: Hotel Division
Interim Results 2003 Hotel Division MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec. 2003 Dec. 2002 Total Assets $152.2m $151.8m Profit After Tax $5.8m $5.6m Average Occupancy 75% 76% i n t e r i m Average Room Rate $171 $161
Slide 15: Debt Management
Interim Results 2003 Debt Management MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Dec Dec 2003 2002 Total Net Debt $1,521.0m $1,061.6m Total Hedged $1,048.0m $850.0m Fixed Interest Maturity 4.3yrs 5.5yrs i n t e r i m Average Borrowing Rate 6.16% 6.17% (including margin)
Slide 16: Capital Management
Interim Results 2003 Capital Management MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • DRP opened to all security holders with December Distribution fully underwritten • March 2004 Distribution will be fully underwritten • Pre-sale securitisation bond program issued $225m with CP issuance of $
Slide 17: Investment Division Segmental EBIT Results
Interim Results 2003 - Investment Division Segmental EBIT Results MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 $85 $82.4 $82.4 $80 $75.2 $75.2 $75 $70.9 $70.9 $70 $65.4 $65.4 $63.3 $63.3 $65 $millions $60.0 $60.0 $58.2 $58.2 $60 $55.7 $55.7 $55.7 $55.7 $55 i n t e r i m $50 Dec. Jun. Dec. Jun.
Slide 18: Diversification by Asset Value
Interim Results 2003 - Investment Division Diversification by Asset Value MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 $181m Growth in Assets (6 months) Carpark 3% VIC Retail 19% 25% QLD 10% Indust/Other NSW 9% ACT 62% Office 9% i n t e r i m 63% Sector Diversification Geographic Diversificati
Slide 19: Portfolio Growth
Interim Results 2003 - Investment Division Portfolio Growth MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • Investment portfolio has grown to $2.18 billion through new acquisitions, development and revaluations • Continued focus on retail and industrial acquisitions Acquisitions / Completed Dev
Slide 20: Commercial & Industrial Highlights
Interim Results 2003 - Investment Division Commercial & Industrial Highlights MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • Improvement in commercial portfolio occupancy to 96.7% • Industrial portfolio occupancy at 90.9% (Smithfield affected) • 58,600m2 (13.8%) commercial / industrial space l
Slide 21: Commercial & Industrial Major Leases
Interim Results 2003 - Investment Division Commercial & Industrial Major Leases MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 During the 6 months from July to December, major lease deals completed included Area m2 Telstra 650 Chapel St, South Yarra 3,700 URS Riverside Quay, Bldg 1,Southbank 3,1
Slide 22: Commercial Vacancy Rates - Market Comparison
Interim Results 2003 - Investment Division Commercial Vacancy Rates - Market Comparison MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Mirvac Market Sydney CBD 7.1% 9.5% North Sydney 0.4% 12.4% Chatswood 7.2% 15.0% Parramatta 0.0% 5.8% St Kilda Road/Southbank 4.2% 10.3% Canberra 1.8% 5.5% Brisba
Slide 23: Lease Expiry Profile - Commercial
Interim Results 2003 - Investment Division Lease Expiry Profile - Commercial MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 30% 25% 20% 15% 10% 5% i n t e r i m 0% FY 03/04 FY 04/05 FY 05/06 FY 06/07 FY 07/08 Beyond
Slide 24: Retail Highlights
Interim Results 2003 - Investment Division Retail Highlights MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • Retail portfolio occupancy remains high at 98.7% • Like for like actual income growth of 4.8% • Completion of Stage 1 Stanhope Village • Completion of Stage 2 Greenwood Plaza • DA approv
Slide 25: Retail Performance
Interim Results 2003 - Investment Division Retail Performance MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 • MAT Growth - Total Centres 4.0% • Specialty Sales $8,099 / m2 • MAT Growth- Specialty Shops 3.4% • Specialty Occupancy Cost 11.4% (average Total Portfolio) i n t e r i m
Slide 26: Lease Expiry Profile by Area - Retail
Interim Results 2003 - Investment Division Lease Expiry Profile by Area - Retail MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 45% 40% 35% 30% 25% 20% 15% 10% 5% i n t e r i m 0% 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 Beyond
Slide 27: Investment Development Update
Interim Results 2003 - Investment Division Investment Development Update MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Continued strategy for growth of investments by development Est.Value Total Value Current $m $m Ikon retail 13 Waverley Gardens, Mulgrave 50 Thiess Building, Brisbane 43 Darlin
Slide 28: Investment Development Update (cont'd): Stanhope Village
Interim Results 2003 - Investment Division Investment Development Update (cont’d) MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Case Study Stanhope Village Completion : November 2003 Current Area : 7,255 m2 Projected cost : $20.3m Yield on Cost : 10.0% i n t e r i m
Slide 29: Development Highlights
Interim Results 2003 - Development Division Development Highlights MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Net Profit After Tax $45.4m Sales Revenue $534.2m Settlements* House / Land 825 Unit 360 i n t e r i m * includes settlements from JV’s
Slide 30: Development - State of The Market
Interim Results 2003 - Development Division Development - State of The Market MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Demand • Underlying demand will remain strong • Population increasing • Headship rate decreasing • Investor market slower Supply • Supply constrained by land releases i n
Slide 31: Development - State of The Market
Interim Results 2003 - Development Division Development - State of The Market MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Residential Cycles • Previous cycles ended abruptly by credit squeeze or recession • Government no longer has control over bank lending • Current economic growth sustainab
Slide 32: Development Division - Revenue
Interim Results 2003 - Development Division Development Division - Revenue MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 WA WA 5.6% 1.0% NSW NSW Victoria Developments Victoria Developments 19.5% 33.8% 24.0% 42.6% Qld QLD 11.5% 24.5% NSW NSW Housing Housing i n t e r i m 16.3% 21.2% $534.2m $420
Slide 33: Lots Under Control
Interim Results 2003 - Development Division MIRVAC GROUP Lots Under Control r e s u l t s D e c e m b e r 2 0 0 3 Total No. of Houses 15,350 Forecast revenue from lots currently Total No. of Units 6,150 controlled - $8.8 billion over 10 years Total No. of Lots 21,500 (no escalation) No. of Lots Fore
Slide 34: NSW Housing
Interim Results 2003 - Development Division NSW Housing MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Sanctuary Gardens, Westleigh 1 9 19 13 1 Newbury, Stanhope Gardens* 2 8 16 11 2 6 Princeton, Carlingford 3 7 Hammondville 4 20 Spring Farm 5 17 3 Forestview, Belrose 6 Seaviewrise, Belrose 7 18
Slide 35: Current Exchanges
MIRVAC GROUP r e s u l t s D e c e m b e r 2 0 0 3 Current Exchanges Dec. 2003 June 2003 $812m $941m • No profits yet brought to account • Greater focus on land, housing and low rise apartments will involve less pre-selling i n t e r i m
Slide 36: Hotel Division - Rooms Under Management
MIRVAC GROUP Hotel Division r e s u l t s D e c e m b e r 2 0 0 3 2,574 2,574 2,533 2,533 2,396 2,396 2,252 2,252 2,234 2,234 1,820 1,820 i n t e r i m Dec. 1998 Dec. 1999 Dec. 2000 Dec. 2001 Dec. 2002 Dec. 2003 Rooms Under Management
Slide 37: Hotel Division - Room Rate and Occupancy
MIRVAC GROUP Hotel Division r e s u l t s D e c e m b e r 2 0 0 3 100% $182 $182 $170 $170 $172 $172 $171 $171 $161 $161 $161 $161 75% 76% 76% 75% 75% 72% 72% 73% 73% 74% 74% 72% 72% 50% 25% i n t e r i m 0% Dec. 1998 Dec. 1999 Dec. 2000 Dec. 2001 Dec. 2002 Dec. 2003 Average Room Rate Average Room O
Slide 38: Corporate Structure
MIRVAC GROUP Corporate Structure r e s u l t s D e c e m b e r 2 0 0 3 Mirvac Group Board Of Directors Managing Director Robert J. Hamilton Mirvac Executive Committee Hotels Robert Lynch Mick O’Brien Chris Freeman Adrian Fini Ian Costley Andrew Turner Barry Neil Roger Fortune Dennis Broit C.E.O. C.E
Slide 39: Looking Forward
MIRVAC GROUP Looking Forward r e s u l t s D e c e m b e r 2 0 0 3 Trust 60% Corporation 40% Investment Division • A grade properties developed internally • Acquisition of well located medium to high yielding properties with redevelopment potential • Maximise retail and industrial opportunities Deve