Rural Funds Group · ASX:RFF
Rural Funds — H1 FY2015 Earnings Presentation
26 slides from Rural Funds's earnings presentation, Feb 24, 2015
Slide 1: Financial results presentation half year ended 31 December 2014
For personal use only Rural Funds Group (ASX: RFF) Financial results presentation half year ended 31 December 2014 24 February 2015
Slide 2: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (“RFM”) as the responsible entity of Rural Funds Group (“RFF”). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168
Slide 3: Agenda
Agenda For personal use only RFM attendees 1. Highlights and results summary David Bryant Managing Director 2. Forecasts 3. Strategy Stuart Waight Chief Operating 4. Appendices Officer Daniel Yap Financial Controller James Powell Investor Relations & Distribution Manager 3
Slide 4: Highlights and results summary
For personal use only Highlights and results summary
Slide 5: Highlights first half FY2015
Highlights first half FY2015 For personal use only Stapling of Rural Funds Trust (RFT) to RF Active collectively called the Rural Funds Group Achievements Acquisition of Tocabil Station for purposes of leasing and almond development Net profit before income tax $3.9m Financial Adjusted funds
Slide 6: Results summary
Results summary For personal use only Metrics as at 31 December 2014 Income Net profit before income tax 3,903,000 AFFO $5.0m (pre-tax) in line with previous forecast to 30 June 2015 Total comprehensive income 3,904,000 Adjusted funds from operations 4,997,000 Result includes 2.5 months of RF Ac
Slide 7: First half FY2015 results
First half FY2015 results For personal use only Summarised statement of comprehensive income Result includes $0.96m unrealised loss 6 mths ended 6 mths ended relating to interest rate swaps and 31 Dec 2014 31 Dec 20131 decrease in market interest rates RFT for the first time treated as a flow Pr
Slide 8: First half FY2015 adjusted funds from operations
First half FY2015 adjusted funds from operations For personal use only Composition of AFFO (pre-tax) AFFO is pre-tax and excludes fair 6 mths ended 6 mths ended value adjustments, depreciation and 31 Dec 2014 31 Dec 2013 impairment to represent RFF’s property rental business Property revenue 10,68
Slide 9: Debt facility
Debt facility For personal use only Debt metrics as at 31 December 2014 $2 million per annum amortisation commencing 30 September 2016 Term debt facility limit $103.0m Key financial covenants: – LVR <50% Term debt drawn $99.3m – Interest Cover Ratio (ICR) >2.25x Headroom $3.7m – Permitted distri
Slide 10: RFF market price performance
RFF market price performance Comparison of RFF to S&P/ASX 300 A-REIT index1 For personal use only RFF market price movement from 14 February 2014 (listing date) to 31 December 2014 Increase $1.10 since listing 44.0% $1.05 Increase for $1.00 result period 17.4% $0.95 $0.90 $0.85 $0.80 $0.75 $0.70 RFF
Slide 11: Forecasts
For personal use only Forecasts
Slide 12: Forecasts
Forecasts For personal use only Distributions AFFO and distributions on track to previously forecast Record date CPU result to 30 June 2015 30 September 2014 (expected to be tax deferred) 2.15 Total comprehensive income is below forecast due to approximately $0.96m or 0.82 cents per unit impact
Slide 13: Strategy
For personal use only Strategy
Slide 14: Strategy
Strategy For personal use only The Tocabil Station acquisition and proposed development closely adheres to RFF’s previously stated long term objectives Tocabil Station is currently leased for cotton and wheat farming RFM is continuing discussions with a potential lessee Other comments: – RFM
Slide 15: Appendices
For personal use only Appendices
Slide 16: Reconciliation of net profit after tax to AFFO
First half FY2015 results For personal use only Reconciliation of net profit after tax to AFFO Table adds back non cash items to 6 mths ended 6 mths ended reconcile net profit after tax to AFFO 31 Dec 2014 31 Dec 20131 Major items for first half FY2015 Net profit after tax 3,904,000 (3,980,000)
Slide 17: Summarised balance sheet
First half FY2015 results For personal use only Summarised balance sheet Net assets $136.7m As at As at NAV per unit $1.16 31 December 2014 30 June 2014 Change in total assets primarily due Cash 800,000 2,723,000 to: Property investments 238,045,000 227,204,000 – Tocabil Station acquisition De
Slide 18: Property investment reconciliation
First half FY2015 results For personal use only Property investment reconciliation Investment Biological Intangible Plant and Total property assets assets1 equipment Balance as at 30 June 2014 138,108,000 65,506,000 23,590,000 - 227,204,000 Acquisition – Tocabil Station 3,525,000 2,369,000 - 5,894,0
Slide 19: Diversified assets and counterparts
Diversified assets and counterparts For personal use only Portfolio diversification by asset values as at 31 Dec 20141 RFF portfolio highlights include: 3% 5% • 27 properties Poultry infrastructure • 100% occupancy 16% Almond orchards 39% • 12.2 year WALE (as at 31 December 2014) • diversification b
Slide 20: Almond industry outlook
Almond industry outlook For personal use only Improving supply and demand outlook Three key factors provide a promising outlook for the Australian almond industry: 1. Difficult conditions for Californian growers, source of 80% of the worlds almonds; 2. Declining AUD, favourable for Australian grower
Slide 21: Key assets further details
Key assets further details For personal use only Poultry infrastructure Almond orchards Vineyards 13 poultry farms consisting of 134 sheds located Two almond orchards located near Hillston NSW Seven vineyards with 666 ha planted to vines in Griffith, NSW and 20 sheds on 4 farms in of which 1,221 ha
Slide 22: RFF investment thesis
RFF investment thesis For personal use only Australian property sectors Observations: 160 – Academic research demonstrates that leasing assets provides capital management benefits and 140 flexibility to lessees and is linked to higher company returns 120 – The combined value of Australian commerci
Slide 23: Spectrum of investment opportunities
Spectrum of investment opportunities RFF has identified a range of investment opportunities For personal use only RFF will pursue acquisitions of additional assets to grow the quantum and diversity of its earnings The investment strategy is to invest across the full range of the asset continuum
Slide 24: Responsible entity relationship
Responsible entity relationship RFM is one of the oldest and most experienced agricultural funds management organisations in For personal use only Australia Rural Funds Management Limited (RFM) is an experienced fund and asset manager that specialises in Australian agriculture Established in 199
Slide 25: RFM board and management team
RFM board and management team RFF is externally managed and governed by a highly experienced management team and board For personal use only Board of directors Contact • Joined RFM in 2003 • Responsible for reviewing and optimising the • Former director of broking firm JBWere with more than performa
Slide 26: Corporate information
Corporate information For personal use only Rural Funds Management Ltd ACN 077 492 838 AFSL 226701 Canberra Office Level 2 2 King Street Canberra ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: www.ruralfunds.com.au For further information: For media enquiries: Investor relat