Stockland · ASX:SGP
Stockland — Corporate Update (April 2009)
18 slides from Stockland's corporate update, Apr 23, 2009
Slide 1: Market Update April 09
For personal use only Market Update April 09 www.stockland.com.au
Slide 2: Agenda
Agenda • Residential For personal use only Market conditions Communities trading performance Strategy and carrying values • Commercial Property Market conditions Trading performance Carrying values • UK Strategy and carrying values • Strategic investments • FY09 guidance • Distribution
Slide 3: Residential market conditions
Residential market conditions • First home buyer (FHB) market still very buoyant FHB Finance For personal use only 28 Likely to further strengthen pre 30 June following 26 24 the Govt’s announcement of likely end to First 22 Poor Affordability Home Owners Boost (FHOB) Percent (%) 20 18 16 • 2nd+ h
Slide 4: Residential Communities performance
Residential Communities performance Monthly Net Deposits Cumulative Settlements / Net Deposits For personal use only 600 Home To Retire in 5,000 Investors Average 510 per month 550* 500 Second + Home Buyers 4,000 First Home Buyers 36 529* 400 448* Average 312 167 3,000 +63% 1,109 per month 300 29 2,
Slide 5: FY09 Residential profits
FY09 Residential profits • Despite the strong sales performance, FY09 Residential profits are expected to be below For personal use only previous guidance: EBIT impact ($m) Residential Communities Allowance for increased cancellation rates between deposits and settlement due to banks (15) tightening
Slide 6: Residential strategy
Residential strategy 31 Dec 08 For personal use only Funds employed % Total % Total Performance Strategy residential SGP* • Market leader • Leadership in key growth • Volumes corridors stable/growing • Focus on core urban projects • Increased market • Reduce funds employed in Residential Communities
Slide 7: Residential cash flows
Residential cash flows • Residential Communities For personal use only Positive cashflow contributor No acquisitions planned for FY10 to reduce funds employed • Apartments Stage 1 Tooronga and certain stages at Prince Henry to be completed (additional capex of $150m and revenue of $250m over F
Slide 8: Residential carrying values
Residential carrying values • Full review of all projects, building in greater contingency than last review For personal use only • Further impairment required in 2H09: 1H09 31 Dec 08 2H09 impairment Book Value impairment Reason for 2H09 impairment ($m) ($m) ($m) • Material impairment at Wallarah Re
Slide 9: Commercial Property market conditions
Commercial Property market conditions Retail For personal use only • Modest MAT growth, but some retailers discounting stock to achieve sales and margins under pressure • Arrears still low and no real signs as yet of retailer distress • Demand for new shops is patchy and project leases require incre
Slide 10: Commercial Property performance
Commercial Property performance • On track to achieve FY09 profit targets and 4.0% - 4.5% comparable rental growth For personal use only • Good momentum with asset sales (eg. Edmund Barton - $186m @ 7.3% yield) • Retail developments on track - Merrylands Stages 3 & 4 likely to proceed with $150m add
Slide 11: Commercial Property values
Commercial Property values • Discussions with valuers - likely to see a further 50bp cap rate shift in 2H09 For personal use only • This is backed up by transaction evidence for good quality assets <$100m, and limited evidence $100m-$200m. No evidence >$200m Cap Rates – SGP Portfolio 8% 7.7% 7.2% 7%
Slide 12: UK strategy and carrying values
UK strategy and carrying values • UK economy and property markets continue to slide For personal use only • Projects underway to be completed - capex $35m in FY10 • No new projects to commence - no further capital required • Manage portfolio and sell properties when market recovers est. by FY12 • Br
Slide 13: Strategic investments
Strategic investments For personal use only GPT (12.7%) - $244m market value (22 Apr 09) • Held through derivatives expiring late 2009 • Difference between initial cost of derivatives and current value of exposure – ($272m) FKP (15.0%) - $27m carrying value* • Largest retirement living operator in Q
Slide 14: FY09 guidance
FY09 guidance For personal use only 1H09 guidance Apr 09 Current and movement revisions guidance Original FY09 EPS guidance 46.7c 46.7c Shortfall in Residential operating profit: • Reduced super lot sales (3.2) (1.0) (4.2) • Provision for retail lot cancellations and settlement slippage - (1.5) (1.5
Slide 15: Distribution policy
Distribution policy • Distribution policy reviewed by Directors for FY10 onwards to rebase distributions to a more For personal use only sustainable level that provides steady growth over time • New distribution policy from FY10, greater of: Trust Taxable Income (TTI) or 80% of AFFO • FY09 distr
Slide 16: Capital management
Capital management • All lenders have one set of covenants: Pro forma Pro forma For personal use only (TL/TTA) Covenant (%) headroom Total liabilities / total tangible ($bn) assets (TL/TTA): 45% 31 Dec 08 38.1 1.6 30 June 09 pro forma estimate before Interest cover: 2:1 (write-downs property rev
Slide 17: Summary
Summary For personal use only • Residential sales volumes remain strong – likely to further strengthen pre 30 June • Full review of carrying values (Residential, Commercial and UK) – further impairment in 2H09 • Lower FY09 EPS guidance Lower Residential profits, some delayed into FY10 39.8c pre
Slide 18: Stockland contact and disclaimer of liability
For personal use only Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741 25th Floor 133 Castlereagh Street SYDNEY NSW 2000 DISCLAIMER OF LIABILITY While every effort is made to provide accurate and complete information, Stockland does not warrant or repr