Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2009 Earnings Presentation
48 slides from Charter Hall's earnings presentation, Feb 24, 2009
Slide 1: Charter Hall Group First Half FY09 Results
For personal use only Charter Hall Group First Half FY09 Results 24 February 2009
Slide 2: Agenda
Agenda For personal use only First Half FY09 Summary Earnings Overview Charter Hall Property Trust Charter Hall Managed Funds Development Financials Capital Management Outlook Questions Appendices Charter Hall Group 1H FY09 Results Presentation 2
Slide 3: Section one: First Half FY09 Summary
For personal use only Section one First Half FY09 Summary 275 George Street Brisbane (CHOF4 & CPOF) and Northbank Plaza, Brisbane (CPOF)
Slide 4: First Half FY09 Summary
First Half FY09 Summary For personal use only Underlying Earnings of $20.9 million for 1H FY09 Transitioned business to adjust to low growth environment and absorb asset devaluations – Refinancing or negotiation of new debt facilities totalling $1.4 billion for CY08 – Improved headroom with debt
Slide 5: First Half FY09 Summary
First Half FY09 Summary For personal use only 1H FY09 1H FY08 Underlying Earnings1 $20.9m $26.3m Underlying EPS2 4.80c 6.28c DPS 3.96c 6.30c NPAT (AIFRS) ($16.6m) $46.5m AT 31 DECEMBER 08 AT 30 JUNE 08 AUM $3.87bn $3.90bn Total Group Assets $610m $802m Total Group Net Assets $488m $492m NTA $1.09 $1
Slide 6: Section two: Earnings Overview
For personal use only Section two Earnings Overview ONE30 Stirling Street, Perth (CPOF)
Slide 7: Group Revenue
Group Revenue For personal use only 1H FY09 revenue of $31.9 million1 – Reduced exposure to property income due to selling down CPRF properties – Minimal transaction fee, performance fee and development investment income in CHL CHL $41.7m CHPT $31.9m $22.3m $17.0m $19.4m $14.9m 1H FY08 1H FY09 NOT
Slide 8: Group Revenue
Group Revenue For personal use only Revenue composition 1H FY09 revenue breakdown ($31.9 million) $19.4m Performance Development 1H FY08 Property Fees Investment Management 3% 2% 1H FY09 and Other Fees $15.5m 4% $14.9m Development Management Fees 21% CHPT Revenue $8.8m 46% $5.6m $4.5m $3.4m $0.9m $0
Slide 9: Group EPS and DPS
Group EPS and DPS For personal use only Underlying EPS down 24% on pcp basis 6.28c 6.30c EPS DPS 4.80c 3.96c 1H FY08 1H FY09 Charter Hall Group 1H FY09 Results Presentation 9
Slide 10: Section three: Charter Hall Property Trust
For personal use only Section three Charter Hall Property Trust Atrium, 60 Union Street, Pyrmont (CPOF)
Slide 11: Charter Hall Property Trust (CHPT)
Charter Hall Property Trust (CHPT) For personal use only 84% (by value) of the portfolio revalued independently over 1H FY09 38 basis points (bps) like for like expansion in weighted average capitalisation rate – Continues to be partially offset by strong rental increases and realised developmen
Slide 12: Charter Hall Property Trust (CHPT)
Charter Hall Property Trust (CHPT) For personal use only Reconciliation of fall in value CHPT property investment portfolio – CHPT portfolio falls from $497 million (post CPRF raising) to $467 million – Net fall of $30.4 million comprises of $2.0 million from net sales and $28.4 million fall in va
Slide 13: CHPT Portfolio Metrics
CHPT Portfolio Metrics For personal use only Weighted average lease expiries Sector diversification (years, by net income) (by value) CPOF 7.9 Industrial, 17% CPIF 11.6 CPRF 9.0 Office, 45% DPF 7.5 Retail, 39% CHUF 9.0 CHPT 8.8 Charter Hall Group 1H FY09 Results Presentation 13
Slide 14: CHPT Portfolio Metrics
CHPT Portfolio Metrics For personal use only Asset diversification Geographical diversification (by value) (by value) SA, 1% CHUF, $54.2m, DPF, $23.6m, 5% ACT, 2% 12% WA, 17% NSW, 23% NZ, 3% CPOF, CPRF, $187.5m, 40% $145.0m, 31% Qld, 27% Vic, 28% CPIF, $56.7m, 12% Charter Hall Group 1H FY09 Results
Slide 15: CHPT Portfolio Metrics
CHPT Portfolio Metrics For personal use only Top 15 tenants Lease expiry profile (by income) Bunnings 9.5% Current 1.5% 7.3% FY09 1.2% Coles FY10 3.4% Telstra 6.5% FY11 4.9% Westpac/St George 5.7% FY12 5.7% Commonw ealth Government 3.7% FY13 4.1% Woolw orths 3.5% FY14 7.5% AMEX 3.5% 4.8% FY15 Harvey
Slide 16: Section four: Managed Funds
For personal use only Section four Managed Funds Bluewater Square, Redcliffe (CPRF)
Slide 17: Assets Under Management
Assets Under Management For personal use only Assets under management (AUM) of $3.87 billion – 85% wholesale investors – No redemptions in wholesale funds Charter Hall AUM $3,867m Wholesale Investor Funds Retail Investor Funds $3,282m $585m Opportunistic Core Plus $839m $2,443m CHOF4 CHOF5 CPOF CP
Slide 18: Assets Under Management
Assets Under Management For personal use only Reconciliation of AUM change over 1H FY09 – Falls in value due to capitalisation rate expansion partly offset by strong rental growth +$62m +$52m ($142m) $3,895m $3,867m FY08 Additions Rental growth Cap rate HY09 compression Charter Hall Group 1H FY09
Slide 19: Wholesale Investment Funds Update
Wholesale Investment Funds Update For personal use only Core Plus Office Fund (CPOF) – 20% of assets (by value) identified for sale AUM $1,586m Change in AUM1 ($15m) – Occupancy of 97% expected to improve with deferral of proposed refurbishment/ CHPT Stake 24% redevelopment projects WALE 7.8 years –
Slide 20: Wholesale Opportunistic Funds Update
Wholesale Opportunistic Funds Update For personal use only Charter Hall Opportunity Fund No.4 (CHOF4) – Agents appointed to sell two assets (Alluvion, 54-58 Mounts Bay Road, Perth and AUM $478m 50% of 275 George Street, Brisbane) CHPT Stake 3% – Completing projects in FY09 substantially leased to st
Slide 21: Retail Equity Funds Update
Retail Equity Funds Update For personal use only Diversified Property Fund (DPF) – Selective asset sales program underway AUM $238m Change in AUM1 ($12m) – Open for applications and continues to receive inflows CHPT Stake 26% WALE 7.5 years Occupancy 100% Charter Hall Umbrella Fund (CHUF) – Diversif
Slide 22: Section five: Development
For personal use only Section five Development Sydney Wharf, Wharf 8 - 9, Pirrama Road, Pyrmont (PDP3)
Slide 23: Development Book
Development Book For personal use only Residential Total development book under construction of $897 millon1 15% Bulky goods 19% Off balance sheet landbank inventory of $322 million Industrial 2% – Significant capacity in CHOF5 Retail – Substantially funded pipeline 5% – Protect investor capital
Slide 24: Commercial & Industrial Property (CIP)
Commercial & Industrial Property (CIP) For personal use only Industrial pre-lease development business in which CHC has a 50% interest CIP 1H FY09 NPAT of $2.6 million (100%) $1.05 million of CIP earnings recognised by CHC in 1H FY09 CIP business model growing development services – Continue
Slide 25: Section six: Financials
For personal use only Section six Financials Bunnings, South Nowra (CPRF)
Slide 26: Income Statement
Income Statement For personal use only $M 1H FY09 1H FY08 Direct net property income 1.1 4.5 Indirect property income 12.8 14.7 Other trust income 1.0 0.2 Total CHPT income 14.9 19.4 Development investment income1 0.6 4.5 Funds management income – Base fees 7.8 4.1 Funds management income – Developm
Slide 27: Underlying Earnings Reconciliation
Underlying Earnings Reconciliation For personal use only 1H FY09 +$10.2m 4.80cps ($4.6m) 3.96cps $0.1m +$31.8m $20.9m $17.7m ($16.6m) AIFRS loss Property and MTM FV Profit on sale Other non-cash Underlying Earnings Distribution Investments FV adjustments items adjustments Charter Hall Group 1H FY09
Slide 28: Balance Sheet
Balance Sheet For personal use only PROFORMA 31 DECEMBER FEBRUARY 20091 2008 ($M) ($M) Direct property - 41.0 Indirect property investments 467.7 467.7 Other investments 63.2 63.2 Cash, receivables and other assets 37.7 38.3 Total assets 568.6 609.6 Borrowings 52.8 69.0 Other liabilities 28.1 52.9 T
Slide 29: Section seven: Capital Management
For personal use only Section seven Capital Management 202 Pier Street, Perth (CHOF5)
Slide 30: Capital Management
Capital Management For personal use only PROFORMA 31 DECEMBER KEY CAPITAL MANAGEMENT METRICS FOR CHC FEBURARY 20091 2008 Debt balance (net of cash) $50.2m $66.8m Gearing2 8.9% 10.9% ‘Look through’ gearing3 46.5% 48.6% Debt maturity 2.4 years 2.6 years Portion of net debt hedged 90% 115% Weighted ave
Slide 31: Capital Management
Capital Management For personal use only Substantial focus on debt management DEBT FACILITY CHC CPOF CPRF CPIF DPF Asset valuation ($m) 567 1,361 424 357 238 – $1.4 billion renegotiated or refinanced in CY08 Net debt drawn ($m) 50 646 201 135 145 1 – All facilities are compliant with covenants Dur
Slide 32: Capital Management
Capital Management For personal use only Debt expiry profile based on renegotiated facilities1 – No maturities until 1H FY11 Significantly extended maturity profile over last six months and increased diversity of debt providers Debt expiry profile by fund $600m DPF $517m $500m $463m CPIF CPRF $4
Slide 33: Section eight: Outlook
For personal use only Section eight Outlook 225 St Georges Terrace, Perth (CPOF)
Slide 34: Outlook
Outlook For personal use only Expect continuation of challenging conditions – Requires active management of investment portfolios and debt facilities Progress sale program of both direct assets and co-investments to further deleverage CHC and funds Survival will ensure CHC is well positioned t
Slide 35: EPS and DPS outlook
EPS and DPS outlook For personal use only CHC has now excluded a non-cash income tax benefit from its previously provided FY09 Underlying EPS guidance of 9.73cps – This exclusion reduces EPS guidance to approximately 8.0cps for FY09 – Focus on cash earnings In the current uncertain market condit
Slide 36: Questions
For personal use only Questions
Slide 37: Section nine: Appendices
For personal use only Section nine Appendices 181 St Georges Terrace, Perth (DPF)
Slide 38: Appendix A - Earnings Reconciliation
Appendix A - Earnings Reconciliation For personal use only 1H FY09 1H FY08 ($M) ($M) NPAT (AIFRS) (16.6) 46.5 Fair value adjustments 31.8 (16.3) Derivative financial instruments1 10.2 (0.5) Gains on sale of investments (4.6) (5.0) Other2 0.1 1.6 Underlying Earnings 20.9 26.3 NOTE: 1. In FY09 $9.8 mi
Slide 39: Appendix B - CHPT Investments
Appendix B - CHPT Investments For personal use only 30 JUNE 08 – POST CPRF 31 DECEMBER 2008 30 JUNE 2008 RAISING CHPT stake CHPT investment CHPT stake CHPT investment CHPT stake CHPT investment (%) ($m) (%) ($m) (%) ($m) Direct properties 17 17 CPOF 24% 187 23% 193 20% 161 CPIF 25% 57 25% 58 25% 58
Slide 40: Appendix C - Capital Management
Appendix C - Capital Management For personal use only FACILITY ASSET DRAWN MATURITY CURRENT LVR HEAD ICR ACTUAL NOTES: VALUES DEBT LVR COVENANT ROOM % COVENANT ICR 1. Covenants for CPOF, CPRF ($M) ($M) and CPIF group facilities CHC are subject to finalisation Group facility 567 50 Jul-11 9% 25% N/A
Slide 41: Appendix D - Development Book
Appendix D - Development Book For personal use only PROJECTS CURRENTLY UNDER CONSTRUCTION FUND SECTOR COMPLETION VALUE COMPLETION DATE ($M) (CY) Home HQ Ipswich, Ipswich Qld CPRF Bulky goods 34 2009 ONE30 Stirling Street, Perth WA CPOF Office 88 2009 275 George Street, Brisbane Qld CPOF (50%) Office
Slide 42: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS OFFICE FUND (CPOF) IND. VALUE IND. MKT CAP MKT CAP MCR VALUER’S WALE RENT VALUATION RATE RATE CHANGE DISCOUNT (YEARS) REVIEWS DATE 31 DEC 08 30 JUNE 08 RATE/ IRR ($M) (%) (%) (%) (%) (%) Atrium, 60 Union Street, Pyrmont NSW 159.7 31 Dec
Slide 43: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS INDUSTRIAL FUND (CPIF) IND. IND. MKT CAP MKT CAP MCR VALUER’S WALE RENT VALUE VALUATION RATE RATE CHANGE DISCOUNT REVIEWS DATE 31 DEC 08 30 JUNE 08 RATE/ IRR ($M) (%) (%) (%) (%) (YEARS) (%) Chatswood Business Park, 372 Eastern 29.5 31
Slide 44: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS RETAIL FUND (CPRF) IND. IND. MKT CAP MKT CAP MCR VALUER’S WALE RENT VALUE VALUATION RATE RATE CHANGE DISCOUNT REVIEWS DATE 31 DEC 08 30 JUNE 08 RATE/ IRR ($M) (%) (%) (%) (%) (YEARS) (%) Bunnings, Bendigo Vic 8.6 31 Dec 08 7.75% 7.00% 0
Slide 45: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only DIVERSIFIED PROPERTY FUND (DPF) IND. VALUE IND. MKT CAP MKT CAP MCR VALUER’S WALE RENT VALUATION RATE RATE CHANGE DISCOUNT REVIEW DATE 31 DEC 08 30 JUNE 08 RATE/ IRR ($M) (%) (%) (%) (%) (YEARS) (%) 46-50 Kings Park Road, West Perth WA 29.0 31 De
Slide 46: Further information
For personal use only Further information David Harrison Joint Managing Director +61 2 8904 4033 davidh@charterhall.com.au David Southon, Joint Managing Director +61 2 8908 4025 davids@charterhall.com.au Peter Roberts Chief Financial Officer +61 28908 4047 peterr@charterhall.com.au
Slide 47: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Charter Hall Group (Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the Responsible Entity for Charter Hall Property Trust (ARSN 113 339 147)). It is a pr
Slide 48: For personal use only
For personal use only Sydney Melbourne Brisbane Perth Adelaide Auckland charterhall.com.au