Slide 1: Aspen Group Limited Results Presentation FY18
For personal use only ASPEN GROUP LIMITED Results Presentation FY18 28 August 2018
Slide 2: Contents
Contents For personal use only 1 FY18 Highlights 2 Financial Results 3 Outlook 4 Portfolio and Acquisitions Update 5 Operating Model 6 Market Update 7 Proposed Governance & Investment Management Changes 8 Appendices
Slide 3: FY18 Highlights
For personal use only 1 FY18 Highlights 3
Slide 4: FY18 Highlights
FY18 Highlights 1.1 Aspen continues its acquisitions program enabled by enhanced platform For personal use only PORTFOLIO FINANCIAL CAPITAL MANAGEMENT NAV improvement Core assets earnings growth Low debt balance sheet • NAV of $1.19, net of the 5.0 cps special • Core accommodation asset revenue • Fi
Slide 5: Key milestones
Key milestones 1.2 For personal use only 1H 2H FY19 FY18 FY18 • Spearwood South Industrial property and • Development commenced at Tomago and Four • Targeting ~ $40 million in acquisitions and Whitsunday Shores land sale settled Lanterns developments at existing properties • Acquisition – Tourist Pa
Slide 6: Financial Results
For personal use only 2 Financial Results 6
Slide 7: Key performance metrics
Key performance metrics 2.1 Performance reflects group transition through acquisitions program For personal use only FY18 FY17 Change Operating Performance Statutory Profit $m $m % • Current year impacted by Statutory revenue1 22.8 19.0 19.7% – Net revaluation gain in the value of core assets Statut
Slide 8: Core performance analysis
Core performance analysis 2.2 Aspen continues to consolidate and build its core portfolio For personal use only $m Core Operating Profit 32% growth in core operating profit 9.0 • Tourism sector leading the growth with 100%, primarily driven by 8.0 two high quality acquisitions of Koala Shores and Da
Slide 9: Reconciliation of statutory profit to operating profit
Reconciliation of statutory profit to operating profit 2.3 For personal use only FY18 FY17 Operating profit $m $m $m 10.0 7.9 8.0 6.0 Statutory profit / (loss) after tax 0.8 (0.2) 6.0 4.0 3.0 2.0 0.9 0.7 Income tax expense / (benefit) - - - (2.0) (0.3) (4.0) Statutory profit / (loss) before tax 0.8
Slide 10: Financial position
Financial position 2.4 For personal use only FY18 FY17 Change Balance Sheet Property assets $m $m $m • Two acquisitions (Koala Shores and Darwin 106.4 71.2 35.2 FreeSpirit) settled during the year for $29.7 Accommodation assets1 million. Assets held for sale / Other 8.1 40.2 (32.0) • Development com
Slide 11: Outlook
For personal use only 3 Outlook 11
Slide 12: Outlook
Outlook 3.1 For personal use only Future state assuming no changes to management structure • Aspen has capacity to acquire / invest ~$35 million over the forthcoming 18 month period • Assuming an average yield of 9%, this level of acquisition would be expected to increase stabilized underlying earni
Slide 13: Portfolio and Acquisitions Update
For personal use only 4 Portfolio and Acquisitions Update 13
Slide 14: Property portfolio
Property portfolio 4.1 49%1 core assets growth achieved through tourism park acquisitions negotiated in FY18 For personal use only 30 June 2018 $m % 30 June 2017 $m % • Two high quality acquisitions settled and Core Core operations assumed in 1H FY18 – Koala Shores $10.2 million Retirement / Tourism
Slide 15: Development pipeline – Four Lanterns Estate
Development pipeline 4.2 Four Lanterns Estate For personal use only Development Progress • DA/CC approval received (FY18) for 28 new home sites on vacant land within estate • Construction for civils and lead-in sewer commenced (target completion 1H FY19) • Supply agreement structured with quality ma
Slide 16: Development pipeline – Tomago Village Van Park
Development pipeline 4.3 Tomago Village Van Park For personal use only Development Progress • DA (1H FY18) / CC (1H FY19) granted for an 53 home sites on vacant land within estate (1 site occupied previously) • Procurement commenced to Cleared lots source low-cost home product • Finalising post-desi
Slide 17: BIG4 Koala Shores Holiday Park
BIG4 Koala Shores Holiday Park 4.4 Central Coast, NSW (2hrs North of Sydney) For personal use only Location 45km from Newcastle, 25km from Tomago Van Village – establishes NSW Central Coast cluster. 15 minutes from Newcastle airport Facilities Full tourist park, water frontage, newly renovated cabin
Slide 18: Darwin FreeSpirit Resort
Darwin FreeSpirit Resort 4.5 Aspen’s largest addition to date to its tourism portfolio For personal use only Location 17km east of Darwin NT and located on Stuart Highway. Gateway to Kakadu and Litchfield National Parks Close proximity to new Palmerston regional hospital (opened in 2018) Facilities
Slide 19: Accommodation portfolio
Accommodation portfolio 4.6 For personal use only RETIREMENT TOURISM CORPORATE TOTAL Four Tomago Mandurah BIG4 Barlings BIG4 Adelaide Darwin Aspen Lanterns Village Gardens Total Tween Beach Koala Caravan FreeSpirit Total Karratha Estate Van Park3 Estate Waters Holiday Park Shores7 Park Resort Villag
Slide 20: Operating Model
For personal use only 5 Operating Model 20
Slide 21: Operating model
Operating model 5.1 Achieving high yielding returns in affordable accommodation supplemented by development profits For personal use only through business expansion and upgrades • Aspen continues to identify and pursue opportunities in our three existing sectors – Tourism, Retirement and Corporate a
Slide 22: Investment approach
Investment approach 5.2 For personal use only BUY ENHANCE OPERATE • 3 core sectors – Tourism, • Business plan • Distribution and revenue Retirement and management strategy • Opportunity driven (e.g.) Corporate intensification • Operational focus, • Off or near market managing financial • Combined in
Slide 23: Market Update
For personal use only 6 Market Update 23
Slide 24: Sector Focus – Tourism
Sector Focus – Tourism 6.1 Domestic visitors and expenditure – FY18 vs FY17 For personal use only NT - Interstate NT – Intra-Territory VISITORS 874,000 ▲8% VISITORS 588,000 ▼11% SPEND $1.2b ▼ 7% SPEND $0.5b▼19% Domestic Tourism Strong Growth Spend $65.1b ▲5% QLD WA VISITORS 21.8m ▲3% Trips 97.8m ▲7%
Slide 25: Sector Focus – Tourism: State of Industry 2018
Sector Focus – Tourism 6.2 State of Industry 2018 – Caravan and Camping For personal use only NT REGISTRATIONS 1,826 DOMESTIC TRIPS 281,283 DOMESTIC NIGHTS 1,646,262 QLD WA REGISTRATIONS 170,812 REGISTRATIONS 90,958 DOMESTIC TRIPS 2,334,713 DOMESTIC TRIPS 1,532,104 DOMESTIC NIGHTS 10,721,985 DOMESTI
Slide 26: Sector Focus – Tourism: solid demand in caravan and camping
Sector Focus – Tourism 6.3 State of Industry 2018 - solid demand in caravan and camping For personal use only Domestic Caravan and Campers 2017 22,381 Recreational Vehicles were manufactured, 51.9m nights ▲1.9% the second largest year for 11.9m trips ▲0.5% manufacturing in the last 37 years. Interna
Slide 27: Sector Focus – Retirement
Sector Focus - Retirement 6.4 Value of intending retirees1 homes significantly outweighs savings, offering significant For personal use only opportunity to unlock capital through downsizing GROWTH IN CAPITAL 85% OF INTENDING 50% OF INTENDING VALUE IN MAJOR CITIES RETIREES OWN THEIR RETIREES HAVE NO
Slide 28: Proposed Governance & Investment Management Changes
7 For personal use only PROPOSED GOVERNANCE & INVESTMENT MANAGEMENT CHANGES 28
Slide 29: Proposal
PROPOSAL For personal use only Aspen Group is proposing to outsource the Responsible Entity (RE) and Investment Management functions. Each resolution is to be separately approved by securityholders. ➢ Evolution Trustees Limited to become the RE of Aspen Property Trust (Trust) – the relationship be
Slide 30: Benefits of the Proposal
BENEFITS OF THE PROPOSAL ✓ Board of Aspen Group Limited remains in control of corporate governance and management (and APZ For personal use only securityholders remain in control of the composition of the Board): ➢ Board can terminate Investment Management Agreement at will without cause, in which c
Slide 31: Expected cost reductions
EXPECTED COST REDUCTIONS Proposal if approved would materially reduce Aspen’s overheads – MHC proposed fees are For personal use only approximately 30% lower on a like-for-like basis Aspen will remain responsible for costs relating to corporate governance (eg. Director’s Fees and company secreta
Slide 32: Evolution Trustees Limited
EVOLUTION TRUSTEES LIMITED For personal use only Evolution Trustees Ltd to provide RE and oversee Custodian Services: ➢ Responsible Entity: Evolution Trustees Limited [ABN 29611839519] [AFSL 486217] ➢ Custodian: AET Corporate Trust Ltd (part of IOOF group) An independent trustee company located
Slide 33: Mill Hill Capital
MILL HILL CAPITAL (source MHC) For personal use only Established 2004 and AFSL holder Owned by John Carter and David Dixon – each with over 30 years of senior level experience in the real estate industry Strongly aligned with Aspen Group - holds a 23% stake and John Carter is a Non Executive D
Slide 34: MHC's Active Funds
MHC’S ACTIVE FUNDS (source MHC) Affordable Land & For personal use only Marina Hindmarsh Island Strategic Real Estate Fund Accommodation Fund Hotel & Leisure Fund (HLF) Fund (MHIF) (SREF) (AALF) Fund Established: 2015 Fund Established: 2017 Fund Established: 2005 Fund Established: 2015 Portfolio: Po
Slide 35: Investment Management Agreement – Proposed Key Terms
INVESTMENT MANAGEMENT AGREEMENT – PROPOSED KEY TERMS For personal use only Investment Manager: Mill Hill Capital Pty Ltd [ABN 95 110 720 226] [AFSL 282 335] Responsibilities: operating Aspen Group on a day-to-day basis under the direction of the Board of Aspen Group Limited and the Trustee Ter
Slide 36: Process & Timetable
PROCESS & TIMETABLE For personal use only Formation of Independent Board Committee to formulate and negotiate the Proposal: Early June 2018 Announcement of Annual Results and Proposal: 28 August Appointment of Independent Expert to assess Investment Management proposal Early September Comple
Slide 37: Appendices
For personal use only 8 Appendices 37
Slide 38: Aspen Portfolio
Aspen Portfolio 8.1 Business Carrying WA Type Inventory value Business Carrying NT Inventory For personal use only Type value 7 Mandurah Retirement 158 11.3 9 Darwin FreeSpirit Tourism 431 19.8 Karratha 9 8 Corporate 180 11.0 Total 431 19.8 Village Total 338 22.3 Business Carrying NSW Type Inventory
Slide 39: Operating profit
Operating profit 8.2 For personal use only FY18 FY17 $m $m Profit / (loss) from operations Accommodation 9.5 7.0 Non-core 0.8 3.4 Total gross profit 10.3 10.4 Operating expenses and depreciation (6.9) (6.5) Net Financial income / (expenses) (0.3) 0.6 Operating profit before tax 3.0 4.5 Income tax ex
Slide 40: Balance sheet
Balance sheet 8.3 For personal use only FY18 FY17 $m $m Cash 13.4 22.7 Property Assets 1 106.4 71.2 Assets held for sale / other assets 8.1 40.2 Total Assets 127.9 134.1 Debt 4.7 - Other 8.3 9.5 Total Liabilities 13.0 9.5 Net Assets 114.9 124.6 Net Assets attributed to Aspen Group 114.9 124.6 NAV pe
Slide 41: Disclaimer
Disclaimer This presentation has been prepared by Aspen Group (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, For personal use only purchase or sale of any security, and neither this document nor anyth