Dexus Convenience Retail REIT · ASX:DXC
Dexus Convenience Retail REIT — APN Property Group — FY2016 Earnings Presentation
32 slides from Dexus Convenience Retail REIT's earnings presentation, Aug 22, 2016
Slide 1: FY2016 Results Presentation
FY2016 RESULTS PRESENTATION 22 AUGUST 2016 www.apngroup.com.au ASX Code: APD
Slide 2: APN Property Group Overview
APN Property Group Overview As at 30 June 2016 APN PROPERTY GROUP LIMITED $2.2 BILLION FUM REAL ESTATE BALANCE SHEET INDUSTRIA REIT DIRECT PROPERTY SECURITIES $135 MILLION NET $422 MILLION FUM $205 MILLION FUM $1,571 MILLION FUM TANGIBLE ASSETS ► Specialist Australian commercial real estate investme
Slide 3: FY2016 Achievements
FY2016 Achievements OPERATING EARNINGS1 $10.5 million ▲52% (3.46 cents per share) FUM2 $2.2 billion ▲21% TOTAL SHAREHOLDER Building A, 1 Homebush Bay Drive, Rhodes NSW 40.2% RETURN3 10.00 cents per share fully franked SPECIAL DIVIDEND Plus 1.75 cps FY2016 dividends ▲17% FUND Strong risk-adjusted inv
Slide 4: FY2016 Results Overview
FY2016 Results Overview Record profit Statutory profit of $49.7 million up 295% reflecting sale of healthcare division Statutory EPS 16.60 cents Strong growth across all key revenue and profit metrics vs FY2015 FY2015 FY2016 $49.7 m $34.5 m $27.7 m $25.4 m $22.0 m $11.9 m $13.3 m $12.6 m Fund
Slide 5: FY2016 Results Overview
FY2016 Results Overview Recurring income (all income other than performance and $34.5 million Total Net Income (before tax and minority transaction fees) up 43% interests) (below) $9.1 million in performance and transaction fees All categories of revenue increased over FY2015 FY2016 Net Inco
Slide 6: Growth in underlying recurring income
Growth in underlying recurring income1 From continuing operations only; removes Healthcare division for all time periods $17.4m $13.9m $12.2m $9.8m FY2013 FY2014 FY2015 FY2016 1. Net operating income excluding performance and transaction fees before tax and minority interests 2. Based on annual grow
Slide 7: Income statement
Income statement Co-investment income (not including mark to market Income Statement ($’000s) FY2016 FY2015 Change gains) up 54% to $5.2 million Funds management fees 13,287 11,930 ▲ 11% Performance & transaction fees 9,102 6,346 ▲ 43% $39.3 million profit from non-operating activities Asset & p
Slide 8: Balance sheet
Balance sheet At 30 June 2016 (refer Appendix for Detailed Proforma Balance Sheet reflecting post balance date transactions) Cash of $48.81 million ($5.0 million for AFSL) Balance Sheet ($’000s) Jun 2016 Jun 2015 Change Co-investments $106.9 million (includes GHC units of $63.0 million) Cash 72,
Slide 9: Growth in funds under management
Growth in funds under management From continuing operations only; removes Healthcare division for all time periods From continuing operations only 20.7% increase over FY2015 $2.2bn $1.7bn $1.8bn $1.3bn FY13 FY14 FY15 FY16 9
Slide 10: Share price performance to 30 June 2016
Share price performance to 30 June 2016 3 year share price performance, figure annualised $0.55 $0.50 35.1% APD $0.45 S&P/ASX Small Ordinaries (rebased) S&P/ASX 200 (rebased) $0.40 $0.35 $0.30 10.4% $0.25 $0.20 (4.1%) $0.15 $0.10 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Source:
Slide 11: Sale of healthcare division
Sale of healthcare division INVESTOR OUTCOME STRATEGY AND RATIONALE New sponsor NorthWest is a global real estate Healthcare platform under NorthWest sponsorship healthcare operator continues to offer excellent return potential for Acquisition of co-investment stake fosters continuing investor
Slide 12: Real Estate Securities
Real Estate Securities Achievements Breakdown by Fund Strong risk adjusted investment performance across PFIF2 UPF ARI $71m $41m $8m APN’s five real estate securities funds PFIF $192m FuM increased 29% over the year Wholesale AREIT Continued tapering of outflows from Property For Mandates $52m
Slide 13: APN AREIT Fund
APN AREIT Fund Rated one of Australia’s leading property securities funds Strong risk adjusted performance over FY2016 FY2016 FUM up by $304 million (ex CFS mandate of additional $52 million) with net inflows averaging $11.7m per month ($140 million in total) New mandate won in May 2016 Di
Slide 14: Established Equity Raising and Distribution Platform
Established Equity Raising and Distribution Platform Over nearly 20 years APN has built a broad market distribution reach – over FY2016 this has been further enhanced with the award of the Colonial First State First Choice AREIT Mandate All the major vertically integrated brands Wraps and Platform
Slide 15: Industria
Industria Achievements Record leasing success – more than 27,000sqm Increased occupancy to 96% Retained high WALE of 4.9 years FY2017 distribution guidance of 15.6 cps Outlook New fund manager Addressing near term lease expiries and remaining vacancy Capitalising on opportunities to ac
Slide 16: Direct Funds
Direct Funds Achievements Funds FuM ($ million) Funds under management up 3% to $205 million APN Property Plus Portfolio $82 $18.1 million Steller Development Fund successfully launched in September 2015 APN Regional Property Fund $45 APN Coburg North Retail Fund $19 Sold Auburn delivering a t
Slide 17: Convenience retail portfolio update
Convenience retail portfolio update Strategy Long WALE, high quality convenience retail tenants with assets located in strong population catchment areas APN remains of the view that the investment strategy is attractive however based on the strength in transaction markets and potential pricing r
Slide 18: APN Steller Development Fund
APN Steller Development Fund Successfully launched September 2015 Investment type Multi-site residential development, closed-end wholesale unlisted property fund Attractive risk / return metrics - $6,400 per sqm (net sellable area) breakeven point Development 209 apartments over 6 medium density
Slide 19: Market commentary
Market commentary Continuing strength in both direct and listed Australian commercial property markets Prices have continued to increase given the significant liquidity (equity and debt) and historically low interest rates (though bond yield spread to cap rates remains reasonable) Occupier mar
Slide 20: Capital management
Capital management Special dividend IMAGE 10.0 cents per share special dividend declared Approximately $31.4 million Record date: 29 September 2016 Payment date: 18 October 2016 Fully franked Ongoing capital requirements APN is committed to disciplined capital management In excess of $
Slide 21: Outlook
Outlook Cautious approach to current property market conditions, especially changes to bank lending policies While competitive, attractive property acquisition and new fund opportunities can still be found Seeking to deliver long term, consistent growth across APN’s business APN continues to
Slide 22: Earnings guidance
Earnings guidance Subject to continuation of current market conditions FY2016 FY2017 Original guidance Results Guidance Guidance only includes transaction / Includes recurring as well as Guidance only includes transaction / performance revenue items which transactional and performance based performa
Slide 23: Implied Funds Management platform valuation
Implied Funds Management platform valuation1 At 30 June 2016 before 10.0 cps Special Dividend Market implied value of funds management platform of $21.7m 60.0 Total co-investments of based on $2.2bn FuM = 1.0% $48.1m 50.0 A$ cents per share 6.9 40.0 22.0 30.0 50.0 20.0 5.3 0.5 3.7 10.0 11.6 0.0 IDR
Slide 24: Appendices
APPENDICES APN | Property Group 24
Slide 25: Funds under Management Summary
Funds under Management1 Summary Fee Basis APN Co-investment Funds Sector Investors FuM Manage- Perfor- Other $ % ment mance APN AREIT Fund Property Securities Retail & Institutional $1,207m $0.2m − APN Wholesale AREIT Mandates Property Securities Retail & Institutional $52m − − APN Property for
Slide 26: Pro-forma Balance sheet
Pro-forma Balance sheet Settlement of 30 June 2016 Healthcare GHC unit sale Balance Sheet ($’000s) 30 June 2016 Loan repayment dividends Pro-forma divestment proceeds2 declared liabilities Cash 72,0311 (15,000) (48,393) 58,783 (32,969) 34,452 Co-investments 106,914 (58,783) 48,131 Investment propert
Slide 27: Detailed Income statement
Detailed Income statement Income Statement ($’000s) Continuing Healthcare Jun 2016 Continuing Healthcare Jun 2015 Change Funds management fees 10,797 2,490 13,287 9,956 1,974 11,930 ▲ 11% Performance & transaction fees 931 8,171 9,102 1,997 4,349 6,346 ▲ 43% Asset & project management fees (171) 3,0
Slide 28: Operating Profit After Tax Reconciliation
Operating Profit After Tax Reconciliation $‘000s 18,000 1,552 (1,798) 16,000 1,825 (2,041) 14,000 1,544 66 (1,676) 12,000 2,756 10,507 10,000 1,357 8,000 6,922 6,000 4,000 2,000 - Operating Increase in Increase in Increase in Increase in Increase in co- Increase in rent Increase in Increase in MI In
Slide 29: Debt facilities
Debt facilities All facilities non-recourse (security is limited to the direct property assets on a cross collateralised basis only) Eagleby: unconditional contract exchanged for the sale of this property announced post balance date Masters Nowra: post balance date the final construction insta
Slide 30: Boards and Management team
Boards and Management team Experienced real estate team, Independent Boards Board of Directors (APN Property Group Limited) Independent Responsible Entity – APN Funds Management Limited Chris Aylward Over 30 years experience in property and construction industry Geoff Chairman since April 2012 a
Slide 31: Disclaimer
Disclaimer The financial information included in this presentation is based on APN Property Group’s financial statements and results that have been prepared in accordance with the Corporations Act 2001 (Cth), applicable Accounting Standards and Interpretations and in compliance with other applicable
Slide 32: Contact details
Contact details APN Property Group Limited Follow @apngroup Tim Slattery Michael Groth Executive Director Chief Financial Officer +613 8656 1000 +613 8656 1000 [email protected] [email protected] ASX Code: APD APN Property Group Limited Level 30,101 Collins Street, Melbourne, Vic 300