Abacus Group · ASX:ABG
Abacus — Abacus Property Group — FY2017 Earnings Presentation
38 slides from Abacus's earnings presentation, Aug 18, 2017
Slide 1: FY17 Results Presentation
‘It’s all about the property’ FY17 Results Presentation Abacus Property Group – FY17 Results Presentation 18 August 2017 324 Queen Street, Brisbane QLD
Slide 2: FY17 financial summary
FY17 financial summary 14 Martin Place, Sydney NSW Statutory profit Underlying profit Net tangible asset $285.1 million $186.8 million $3.02 per security Up 53% Up 51% Up 13.5% 710 Collins Street, Melbourne VIC Underlying EPS Underlying DPS Payout ratio 32.7 cps 17.5 cps 53.5% Up 46% Up 3% Total ass
Slide 3: FY17 highlights
FY17 highlights Record underlying profit of $186.8 million, up 51% from FY16 All aspects of the business contributed to this result Strong transactional activity during the period across our investment portfolio Acquired 7 commercial properties totalling over $205 million in value during the Spi
Slide 4: Financial results and capital management
201 Pacific Highway, St Leonards NSW Financial results and capital management Abacus Property Group – FY17 Results Presentation 18 August 2017
Slide 5: Diversified business delivers record results
Diversified business delivers record results Key financial metrics Jun 17 Jun 16 Underlying earnings per security growth of 46% to 32.7cps Consolidated Group1 AIFRS statutory 17.5 cps distribution covered by recurring earnings $285.1m $185.9m profit Increased underlying results from the commercial
Slide 6: 13.5% growth in net tangible assets per security
13.5% growth in net tangible assets per security Abacus has a strong balance sheet Balance sheet metrics Jun 17 Jun 16 NTA per security $3.02 $2.66 Balance sheet gearing reduced to 20.5% on the back of realisations across our investment portfolio and residential developments NTA per security less Au
Slide 7: Investment portfolio overview
Investment portfolio overview Abacus Property Group – FY17 Results Presentation 18 August 2017 33 Queen Street, Brisbane QLD
Slide 8: Investment portfolio of $1.8 billion
It’s all about the property Investment portfolio of $1.8 billion Key portfolio metrics Jun 17 Jun 16 Investment portfolio remixing continues with increases across the self-storage, office and retail portfolios Investment portfolio value1 ($m) 1,831 1,714 Investment portfolio delivered 5.0% or $74.8
Slide 9: Building long term returns – Third Party Capital
It’s all about the property Building long term returns – Third Party Capital Current capital partnering assets Sector Amount1 $1.3 billion current AUM ($495m Abacus share) We pride ourselves with investing alongside our partners 4 & 14 Martin Place, Sydney NSW Office/Retail $153.5m 32 Walker Stree
Slide 10: Office portfolio – vacancy provides upside
It’s all about the property Office portfolio – vacancy provides upside 33 Queen Street, Brisbane QLD Occupancy currently 62% 7.0% Expansive ground floor space now WACR1,3 leased to F&B provider 81.5% Office refurbishment program ongoing as space comes up Portfolio occupancy1 Leasing progress
Slide 11: Retail portfolio – development driving growth
It’s all about the property Retail portfolio – development driving growth 33 Queen Street and 199 George Street, Brisbane QLD Bacchus Marsh, Bacchus VIC Refurbishment program completed in 6.3% FY16 WACR1,3 Occupancy improved to 88% in FY17 92.0% 7.5 year lease expiry profile 36% like for lik
Slide 12: Industrial portfolio – low WALE provides opportunity
It’s all about the property Industrial portfolio – low WALE provides opportunity 33 Queen Street and 199 George Street, Brisbane QLD 169 Australis Drive, Derrimut VIC Occupancy currently 100% 8.3% All tenancies expire in FY18 WACR1,3 Rent growth of 50% experienced on 100% re-leasing 23% rece
Slide 13: Self-storage: continuing growth strategy
It’s all about the property Self-storage: continuing growth strategy Self-storage portfolio: $629 million Key metrics AUS NZ Jun 17 Jun 16 14.2% increase in underlying EBITDA to $43.7 million in FY17 Portfolio value ($m) 501.5 128.0 629.5 574.4 driven by strong trading and recent acquisitions No. of
Slide 14: Self-storage: continuing growth strategy
It’s all about the property Self-storage: continuing growth strategy Portfolio value compound growth of 13.9% pa Portfolio consists of: since FY13 53 established self-storage facilities and 650 Portfolio size ($m‐lhs) Portfolio size (no. of assets‐rhs) 70 7 newly converted self-storage facilitie
Slide 15: Developments overview
The Eminence residential development, Carlton, Melbourne VIC Developments overview Abacus Property Group – FY17 Results Presentation 18 August 2017
Slide 16: Developments – delivering on strategy
It’s all about the property Developments – delivering on strategy $55.0 million underlying EBITDA contribution Key metrics Jun 17 Jun 16 Strong results to maintain levels of earnings following record Residential exposure 95.8% 96.2% FY16 year 3.5% fall due to a reduction of finance income as pro
Slide 17: Residential pipeline – developments
It’s all about the property Residential pipeline – developments Doncaster, Melbourne VIC $118 million of invested capital across 8 residential development projects completing, under construction or planning for c1,400 units Completed and committed projects of 945 units are 98% sold down 1 complete
Slide 18: Residential pipeline – land approvals
It’s all about the property Residential pipeline – land approvals $233 million of invested capital across 11 residential land projects actively progressing through the local and state government approvals process 100% exposure to the Sydney metropolitan market Fundamentals remain solid with demand
Slide 19: Summary
Summary Abacus Property Group – FY17 Results Presentation 18 August 2017 Artist’s impression of Ashfield Central residential development, Sydney NSW
Slide 20: Summary – strong value proposition
Summary – strong value proposition Artist’s impression of residential development Hawthorn, VIC Very proud of our record results this year Delivered growth in recurring earnings Profits achieved on sale or realisation of assets or projects during the period continues to validate our diversified
Slide 21: Important information
Important information The information provided in this document is general, and may not be suitable for the specific purposes of any user of this document. It is not financial advice or a recommendation to acquire Abacus Property Group securities (ASX: ABP). Abacus Property Group believes that the i
Slide 22: Appendices
324 Queen Street, Brisbane QLD ‘It’s all about the property’ FY17 Results Presentation AppendicesAbacus Property Group – FY17 Results Presentation 18 August 2017
Slide 23: Segment balance sheet
Appendix A Segment balance sheet Property Property Abacus balance sheet Investment Development Unallocated June 2017 June 2016 ($m) ($m) ($m) ($m) ($m) Commercial investment properties 946.3 946.3 813.8 Self-storage investment properties 625.2 625.2 570.3 Inventory 93.1 15.6 1 108.7 83.4 Property, p
Slide 24: Segment earnings (underlying profit)
Appendix B Segment earnings (underlying profit) Commercial Storage Development FY17 Total FY16 Total Rental income 75.3 69.7 145.0 131.3 1 Finance income 43.9 43.9 46.3 2 Fee income 12.6 12.6 12.5 4, 6 Share of profit from equity accounted investments 3 32.8 20.7 5 53.5 19.4 Sale of inventory 0.0 2.
Slide 25: Net tangible asset reconciliation
Appendix C Net tangible asset reconciliation 30 June 2017 30 June 2016 Consolidated Group net assets 1,814.6 1,559.3 Less Total external non–controlling interest (48.5) (43.3) Total stapled security holders’ interest in equity 1,766.1 1,516.0 Less Intangible assets and goodwill (32.4) (32.4) Deferre
Slide 26: Abacus cashflow analysis
Appendix D Abacus cashflow analysis1 $'000 CASHFLOWS FROM OPERATING ACTIVITIES Income receipts 235,753 Interest received 952 Distributions received 664 Income tax paid (2,944) Borrowing costs paid (31,468) Operating payments (71,271) Payment for land acquisition (26,979) NET CASHFLOWS FROM OPERATING
Slide 27: Debt facilities
Appendix E Debt facilities Capital management metrics June 2017 June 2016 Total bank debt facilities $873m $873m Total bank debt drawn $514m $629m Term to maturity 3.4 yrs 3.5 yrs % hedged 49% 53% Weighted average hedge maturity 2.5 yrs 2.7 yrs Average cost of debt – drawn 5.2% 5.4% Group gearing1 2
Slide 28: Debt maturity profiles
Appendix F Debt maturity profiles Debt maturity profile as at 30 June 2017 ($’m) 400 152 Available bank facility Drawn bank debt 300 200 298 100 118 50 130 39 39 15 32 0 FY18 FY19 FY20 FY21 FY22 FY23 Fixed hedging maturity profile as at 30 June 2017 ($'m) Fixed Interest Rate Swaps Weighted Average F
Slide 29: Portfolio revaluations
Appendix G Portfolio revaluations Revaluation process for Abacus resulted in a net increase in the investment properties values for FY17 of approximately 5.0% or $74.8 million $47.5 million across the wholly owned commercial properties $27.3 million across the storage portfolio Revaluation of
Slide 30: Summary portfolio metrics
Appendix H Summary portfolio metrics Industrial and Key portfolio metrics Jun 17 Jun 16 Other 10% Investment portfolio value1 ($m) 1,831 1,714 Office 34% Commercial portfolio1 ($m) 1,202 1,140 Retail Storage portfolio ($m) 629 574 22% WACR1,4 (%) 7.08 7.48 No. of commercial assets1 34 32 Storage 34%
Slide 31: Summary storage portfolio metrics
Appendix H Summary storage portfolio metrics State geographic diversity by NLA Regional geographic diversity by NLA Regional NZ Canberra ACT 6% 12% 12% VIC 26% Auckland 14% NZ Sydney 20% Regional QLD 22% 7% Regional VIC 3% NSW QLD 22% Brisbane Melbourne 20% 13% 23% Asset net lettable area (m2) split
Slide 32: Summary portfolio metrics
Appendix H Summary portfolio metrics Portfolio metrics Office Retail Industrial & Other Storage Jun 17 Jun 16 Jun 17 Jun 16 Jun 17 Jun 16 Jun 17 Jun 16 Portfolio ($m) 623 492 402 375 177 273 629 574 No. of assets 19 16 5 7 10 9 65 62 Lettable area (sqm)1 91,732 84,424 56,250 63,363 78,829 106,261 30
Slide 33: Summary portfolio metrics – lease expiry profile
Appendix H Summary portfolio metrics – lease expiry profile 39.7% 14.2% 12.5% 11.1% 11.2% 11.3% Month to month FY18 FY19 FY20 FY21 FY22+ Abacus Property Group – FY17 Results Presentation 18 August 2017 12
Slide 34: Developments
Appendix I Developments Projects Type Equity Loans Total Interest rate Security Returns RCL Portfolio, NSW JV/Loan $39.7m $102.0m $141.7m 1st Mortgagee 50% profit share One A, Erskineville, NSW JV - $31.2m $31.2m Unsecured 50% profit share IVY&EVE, Merivale St, QLD JV $27.5m - $27.5m Equity 49% prof
Slide 35: Residential pipeline – residential construction projects
Appendix I Residential pipeline – residential construction projects Schedule of major projects due for development Targeted profit on cost of c.20% Average interest rate on ABP loans c.9% Ave. Unit ABP Profit Project name Settlement Units/Sold Status ETR1 Comments Price share EMINENCE, Carlton,
Slide 36: Residential pipeline – residential approval projects
Appendix I Residential pipeline – residential approval projects Schedule of major projects awaiting sale to third parties upon rezoning approval Average interest rate on ABP loans c.9% ABP Est. Unit/Lot Project name Timeline Units Status Profit Comments Price1 share Camellia, NSW FY18 15,000m2 of
Slide 37: Residential pipeline – residential land sub-divisions
Appendix I Residential pipeline – residential land sub-divisions Schedule of land sub-divisions due for development Land Price Cost to Project name Timeline Status ABP share Comments lots/Sold per lot prepare lot French Road FY18 111/0 Site $270k $100k 25% Approvals received. Site being prepared for
Slide 38: Important information
Important information The information provided in this document is general, and may not be suitable for the specific purposes of any user of this document. It is not financial advice or a recommendation to acquire Abacus Property Group securities (ASX: ABP). Abacus Property Group believes that the i