Bwp Trust · ASX:BWP
Bwp Trust — H1 FY2024 Earnings Presentation
37 slides from Bwp Trust's earnings presentation, Feb 7, 2024
Slide 1: Half-year results to 31 December 2023
Half-year results to 31 December 2023 February 2024 For personal use only
Slide 2: Important Notice
Important Notice For personal use only The information provided in this presentation should be considered together with the financial statements for the period and previous periods, ASX announcements and other information available on the Trust’s website. This presentation has been prepared by BWP M
Slide 3: Acknowledgement of Country
Acknowledgement of Country For personal use only We acknowledge the Traditional Owners of Country throughout Australia and their continuing connection to lands and waterways upon which we depend. We pay our respects to their Elders, past and present. 3 ACKNOWLEDGEMENT OF COUNTRY | HALF -YEAR RESULTS
Slide 4: Presentation outline
Presentation outline For personal use only Mark Scatena Summary slides 5 - 7 Managing Director Results slides 8 - 10 BWP Management Optimise existing portfolio Limited slides 11 - 16 Core portfolio slides 17 - 21 Andrew Ross Portfolio growth Head of Property slides 22 – 25 BWP Management Alternative
Slide 5: Summary
Summary For personal use only BUNNINGS WAREHOUSE AND HOMEMAKER CENTRE BROADMEADOWS, VIC NOTE: THE SHADED AREA INDICATES AREA ACQUIRED IN SEPTEMBER 2023 5 SUMMARY |HALF-YEAR RESULTS TO 31 DECEMBER 2023
Slide 6: 2023/24 Half-year results highlights
2023/24 Half-year results HIGHLIGHTS Value-adding acquisitions For personal use only > Leveraged strong capital position to acquire Southport Showrooms, $3.74 QLD and Broadmeadows Homemaker Centre, VIC for $10.0 million and $20.0 million, respectively NTA > Both adjoining Trust-owned Bunnings Wareho
Slide 7: 2023/24 Half-year results overview
2023/24 Half-year results OVERVIEW For personal use only $82.3m ▲ $57.4m 9.02 cpu 10.3% pa2 Net profit before $3.74 Total income 4.7%1 revaluations Ordinary distribution NTA 10 yr total return PORTFOLIO PORTFOLIO CAPITAL PERFORMANCE MANAGEMENT MANAGEMENT 4.8% 6 A- S&P rating like-for-like rental gro
Slide 8: Results
Results For personal use only BUNNINGS SPRINGVALE, VIC 8 RESULTS |HALF-YEAR RESULTS TO 31 DECEMBER 2023
Slide 9: Financial performance
Financial performance HALF-YEAR ENDED 31 Dec 2023 31 Dec 2022 INCOME & EXPENSES For personal use only Total income $m 82.3 78.6 Total expenses $m (24.9) (21.2) Profit before gains/(losses) in fair value of investment properties $m 57.4 57.4 Amounts released from undistributed income reserve $m 0.5 0
Slide 10: Financial performance (continued)
Financial performance (continued) HALF-YEAR ENDED 31 Dec 2023 31 Dec 2022 INVESTMENT & CASH GENERATION For personal use only Operating cash flow $m 56.3 60.2 Capital expenditure (including repositioning costs) $m 11.2 4.9 Acquisitions of investment properties $m 32.0 1.5 Free cash flow $m 13.1 53.8
Slide 11: Optimise existing portfolio
Optimise existing portfolio For personal use only BUNNINGS RYDALMERE, NSW 11 OPTIMISE EXISTING PORTFOLIO | HALF -YEAR RESULTS TO 31 DECEMBER 2 023
Slide 12: Bunnings market rent review
Bunnings market rent review OUTCOMES For personal use only > Five Bunnings market rent Property location Passing Reviewed Variance Effective reviews were finalised during rent ($pa) rent ($pa) (%) date the period Craigieburn, VIC1,2 1,826,683 1,945,000 6.5 6-May-22 > Variance to passing rent of Scor
Slide 13: Lease covenant summary
Lease covenant summary AS AT 31 DECEMBER 2023 For personal use only > Strong lease covenant mix Covenant % of total rent > Wesfarmers Group covenant Wesfarmers Group 83.8 coverage of 83.8 per cent compares to 86.4 per cent at Commonwealth and State Governments 2.7 31 December 2022 Other national ret
Slide 14: Capitalisation rate
Capitalisation rate OUTCOMES > Bunnings Collingwood is the only standalone Bunnings Warehouse transaction in the last 18 months For personal use only 8.50% 8.00% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% 3.50% Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 New Bun
Slide 15: Valuation summary
Valuation summary DECEMBER 2023 > December 2023 weighted average Properties Cap For personal use only capitalisation rate 5.53 per cent No. of Rental Value by state rate (Jun 2023: 5.38 per cent properties $m/annum2 ($m) 31 Dec 2023 (%) Dec 2022: 5.05 per cent) NSW/ACT 18 38.2 5.41 718.9 > Valuation
Slide 16: Valuations - independent
Valuations - independent DECEMBER 2023 > Income growth more than offset 14 basis point capitalisation rate expansion For personal use only Jun 2023 Jun 2023 Dec 2023 Dec 2023 Cap rate Valuation Dec 2023 Property State Cap Rate Valuation Cap Rate Valuation movement movement Term Certain (%) ($m) (%)
Slide 17: Core portfolio
Core portfolio For personal use only BUNNINGS PORT MELBOURNE, VIC 17 CORE PORTFOLIO | HALF -YEAR RESULTS TO 31 DECEMBER 2023
Slide 18: Core portfolio summary
Core portfolio SUMMARY For personal use only 3.2 ha 66 3.7 years average land core1 properties portfolio WALE area 66% 13,851 m2 83% upgrade average lettable metro located properties or area properties occupied <15yrs 5.4% weighted average cap rate 1 Core properties represent those properties with s
Slide 19: Core portfolio lease expiry profile
Core portfolio WEIGHTED AVERAGE LEASE EXPIRY PROFILE > Near term expiries weighted towards Bunnings Warehouses with less than 15 years of total occupancy For personal use only > Bunnings exercised five options during the period 30% 25% 20% % of Rental Income 15% 10% 5% 0% FY24 FY25 FY26 FY27 FY28 FY
Slide 20: Bunnings lease expiries 2024 to 2026
Core portfolio BUNNINGS LEASE EXPIRIES (CALENDAR YEARS 2024 TO 2026) Options Rent Property Lease expiry Comments (years) ($’000pa) For personal use only Thornleigh Sep 2024 2 x 5 (10) 1,642 Notification required by Jun 2024 Maitland Oct 2024 2 x 5 (10) 1,679 Notification required by Jul 2024 Bibra L
Slide 21: Bunnings lease expiries (continued)
Core portfolio BUNNINGS LEASE EXPIRIES (CALENDAR YEARS 2024 TO 2026) (CONTINUED) Options Rent Property Lease expiry Comments (years) ($’000pa) For personal use only Rydalmere Mar 2026 5 x 6 (30) 3,666 First option, notification required by Mar 2025 Belmont Mar 2026 4 x 5 (20) 1,584 Second option, no
Slide 22: Portfolio growth
Portfolio growth For personal use only BUNNINGS MT GRAVATT, QLD 22 PORTFOLIO GROWTH | HALF-YEAR RESULTS TO 31 DECEMBER 2023
Slide 23: Value-adding acquisitions
Value-adding acquisitions WEIGHTED AVERAGE INITIAL YIELD OF 6.8 PER CENT For personal use only NOTE: THE SHADED AREA INDICATES AREA ACQUIRED IN SEPTEMBER 2023 Southport Showrooms, QLD Broadmeadows Homemaker Centre, VIC > September 2023 purchase for $10.0 million > September 2023 purchase for $20.0 m
Slide 24: Extension of lease with Bunnings
Extension of lease with Bunnings SCORESBY, VIC For personal use only > New 10-year lease on completion of works with three, five-year options exercisable by Bunnings – Annual rent to increase by CPI with market rent reviews every 10 years – No caps/collars on CPI or market rent reviews – No other ch
Slide 25: Bunnings Warehouse upgrades
Bunnings Warehouse upgrades PROGRESS Completion date Property Scope Update (expected) For personal use only > Upgrade cost of $14.0 million, including land acquisition of $1.5 million already completed (funding rate of 4.0 per cent) > Total retail area increase of 2,891 square metres (29 per cent) >
Slide 26: Alternative use properties
Alternative use properties For personal use only MENTONE, VIC 26 ALTERNATIVE USE PROPERTIES | HALF -YEAR RESULTS TO 31 DECEMBER 20 23
Slide 27: Alternative use properties progress
Alternative use properties PROGRESS Property Lease expiry Comments For personal use only > Development approval for large format retail centre Port Kennedy Expired > Leasing progressing Belmont North Expired > Considering redevelopment/ divestment options > Development approval for large format reta
Slide 28: Portfolio renewal
Portfolio renewal For personal use only WOLLONGONG, NSW 28 PORTFOLIO RENEWAL | HALF -YEAR RESULTS TO 31 DECEMBER 2023
Slide 29: Divestments
Divestments PORTFOLIO RENEWAL TO MAXIMISE VALUE AND RECYCLE CAPITAL INTO GROWTH Wollongong, NSW Albany, WA For personal use only > October 2023 agreement to divest to an > October 2023 agreement to divest to an unrelated third-party ex-Bunnings Warehouse unrelated third-party ex-Bunnings Warehouse f
Slide 30: Capital management
Capital management For personal use only BUNNINGS SCORESBY, VIC 30 CAPITAL MANAGEMENT | HALF -YEAR RESULTS TO 31 DECEMBER 2023
Slide 31: Diversified debt
Diversified debt SOURCE & TENOR > Average borrowings for the period $502.4 million (up 6.1 per cent on prior corresponding period) – 4.2 per cent weighted average cost of debt after hedging (2022: 3.3 per cent) For personal use only – Borrowing costs for the period $10.5 million (up 35.1 per cent on
Slide 32: Debt duration
Debt duration DEBT MATURITY PROFILE AS AT 31 DECEMBER 2023 400 For personal use only 140.3 300 104.7 Volume (A$M) 200 150.0 100 25.0 100.0 85.0 75.0 0 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 Bonds Drawn bank facilities Undrawn bank facilities 32 CAPITAL MANAGEMENT | HALF -YEAR RESULTS TO 31 DECEMBER
Slide 33: Outlook
Outlook For personal use only BUNNINGS ROCKLEA, QLD 33 OUTLOOK | HALF -YEAR RESULTS TO 31 DECEMBER 2023
Slide 34: Outlook
Outlook DECEMBER 2023 Operating market & environment Portfolio > Trust remains well positioned with rental income > Primary focus for the remainder of the financial For personal use only comprising largely the Wesfarmers Group (84 per year is on leasing vacancies in the portfolio, cent), other natio
Slide 35: Outlook: Proposed Merger of BWP and NPR
Outlook DECEMBER 2023 Proposed Merger of BWP and NPR For personal use only > Proposed merger provides an opportunity to add > BWP’s strong capital position will be maintained, nine high quality properties to BWP’s portfolio with pro-forma gearing expected to remain at the lower end of BWP’s target r
Slide 36: Questions
Questions For personal use only BUNNINGS FOUNTAIN GATE, VIC 36 QUESTIONS | HALF -YEAR RESULTS TO 31 DECEMBER 2023
Slide 37: Further information
Further information For personal use only Responsible entity: BWP Management Limited Tel: +61 8 9327 4356 Email: investorrelations@bwptrust.com.au 37 FURTHER INFORMATION | HALF -YEAR RESULTS TO 31 DECEMBER 2023