Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2018 Earnings Presentation
66 slides from Far East Consortium International's earnings presentation, June 2018
Slide 1: FY2018 Final Results
FY2018 Final Results June 2018
Slide 2: Disclaimer
Disclaimer This document has been prepared by Far East Consortium International Limited (the “Company”) solely for information purposes. By accepting this document, you agree to maintain absolute confidentiality regarding the information disclosed in this document. This document does not constitute
Slide 3: Table of Contents
Table of Contents 1. FY2018 Annual Results Summary 2. Review of Operations 3. Prospects 4. Appendices 3
Slide 4: 1. FY2018 Annual Results Summary
1. FY2018 Annual Results Summary MeadowSide, Manchester 4
Slide 5: FY2018: From Strength to Strength
FY2018: From Strength to Strength FY2018 FY2017 YoY Key Achievements: Revenue (HK$ M) 5,831 5,005 +16.5% ➢ Record-breaking revenue and profitability across all core segments Gross profit (HK$ M) 2,634 1,990 +32.4% ➢ Robust cumulative presale mounted to historic Net profit attributable to high 1,567
Slide 6: GP Margin Expanded Across All Three Core Businesses
GP Margin Expanded Across All Three Core Businesses FY2018 FY2017 Gross profit Gross profit Gross profit Gross profit Revenue (after (before Revenue (after (before depreciation) depreciation) depreciation) depreciation) Margin Margin Margin Margin HK$ M HK$ M % HK$ M % HK$ M HK$ M % HK$ M % Property
Slide 7: Property Development: Significant Pipeline in Place
Property Development: Significant Pipeline in Place Projects completed Land Replenishment New Launches The FIFTH, Melbourne Perth: Perth City Link Lots 3B, Apr 2017 Artra Singapore Royal Crest II, Shanghai 6 and 7 (Preferred Proponent) May 2017 Marin Point Hong Kong Dorsett Bukit Bintang, Kuala Manc
Slide 8: Hotel: Growth Driven by RevPAR Increase and Room Additions
Hotel: Growth Driven by RevPAR Increase and Room Additions Hotel Operations • Strong recovery on track, solid RevPAR growth despite new hotels opening 545 1,538 • 23 owned hotels with 6,949 rooms under operation 82.8 485 1,309 77.6 as of 31 March 2018 • 5 hotels of 572 keys added after completion of
Slide 9: Car Park: Expanded into Europe
Car Park: Expanded into Europe Organic and Acquisition Growth • 441 car parks with 88,868 bays as at 31 March 2018, +14,342 bays YoY New Zealand, • Revenue from car park continuously growing at CAGR of 5.3% for 8,387 seven years • Expect to maintain good track record and generate cash flows UK, 1,80
Slide 10: Gaming and Entertainment: Acquisitions to Complement Asian Wallet Strategy
Gaming and Entertainment: Acquisitions to Complement Asian Wallet Strategy Acquisition of Trans World Strategic Alliance with The Queens Wharf Brisbane Corporation (“TWOC”) Star Entertainment Group Integrated Resort Project Construction Progressing Limited (“The Star”) • Plan of Development approval
Slide 11: Our Core Strategy: The Pursuit of Asian Wallet
Our Core Strategy: The Pursuit of Asian Wallet We aim to become a Leader in Providing Overseas Property Investment, Hospitality and Entertainment Service for Asian Tourists - Asian countries are experiencing high speed economic growth - Population of Asia is 4.5bn and the wealthy middle class are ri
Slide 12: Proven Business Model Resulting in Outperformance
Proven Business Model Resulting in Outperformance (1) For the period from 2/1/2013 to 29/3/2018 assuming dividends are reinvested at spot price (2) Source: Bloomberg 12
Slide 13: Better Allocation of Capital Resulting in Higher Return
Better Allocation of Capital Resulting in Higher Return 14.0 ROE(1) (%) 13.2 12.0 10.9 10.7 11.7 10.7 10.0 Adoption of regional diversification and “Chinese 7.6 Wallet” Strategies 8.0 6.0 6.0 6.2 Privatisation of 6.0 Dorsett 4.0 2.0 1.8 - FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY201
Slide 14: Consistent Growth in Revenue and Profitability
Consistent Growth in Revenue and Profitability 6,000 5,831 CAGR (FY2009-FY2018) : HK$ mn Total revenue: 14.4% 5,110 5,005 Adjusted cash profit(1): 29.1% 5,000 Sales of properties 4,066 3,995 4,000 3,732 Hotel revenue 3,000 Car park 2,342 operations revenue 1,733 1,761 2,000 1,654 Total 1,643 revenue
Slide 15: Consistent NAV Creation and Dividend Growth
Consistent NAV Creation and Dividend Growth As at 31.3.2018 As at 31.3.2017 Equity attributable to shareholders (HK$M) 12,971 10,792 Add: Hotel revaluation surplus (HK$M) 15,593 13,354 Total NAV attributable to shareholders (HK$M) 28,564 24,146 No. of shares issued (million) 2,302 2,238 Net asset va
Slide 16: Well Balanced Diversified Portfolio
Well Balanced Diversified Portfolio Business diversification allows FEC to take advantage of property cycles in different countries Total Assets by Geography(1) Total Assets by Business Segment(1) Singapore 10% UK Mainland China 7% Car park 12% Europe operations & 1% Property facilities Malaysia dev
Slide 17: Strong Credit Profile
Strong Credit Profile Liquidity Position and Total Assets(1) Net Gearing(2) HK$ mn Cash & investment securities Total Assets 50,082 37.7% 41,754 31.5% 36,893 28.7% 5,628 8,111 3,750 As at 31.3.2016 31.3.2017 31.3.2018 As at 31.3.2016 31.3.2017 31.3.2018 Secured and Unsecured Borrowings Mix EBITDA(3)
Slide 18: Substantial War Chest
Substantial War Chest • Presales HK$13.4 bn provides a clear vision of cash flow stream • War chest can be enhanced by leveraging unencumbered hotels War chest HK$ M Group cash and liquidity @ 31.3.2018 8,111 Undrawn banking facilities - Corporate use 3,600 Undrawn banking facilities - Construction
Slide 19: Solid Balance Sheet to Support Future Growth
Solid Balance Sheet to Support Future Growth As at As at Debt mix by currencies 31.3.2018 31.3.2017 HK$ M HK$ M (1) Bank loans, notes and bonds Due within 1 year 5,005 1,431 Due 1-2 years 1,848 4,482 Due 2-5 years 7,699 6,547 Due more than 5 years 1,820 814 USD Total bank loans, notes and bonds 16,3
Slide 20: Foreign Exchange Movement Analysis
Foreign Exchange Movement Analysis Average Rates as at 31-Mar-18 31-Mar-17 Change FY2018 FY2017 Change rates for HKD/AUD 5.99 5.93 1.0% HKD/AUD 5.96 5.93 0.5% HKD/RMB 1.25 1.13 10.6% HKD/RMB 1.19 1.17 1.7% HKD/MYR 2.03 1.75 16.0% HKD/MYR 1.89 1.86 1.6% HKD/GBP 11.02 9.67 14.0% HKD/GBP 10.35 10.40 -0
Slide 21: Other Recent Developments
Other Recent Developments • The Estoril site at Holland Road, Singapore (April 2018) ₋ Freehold site area of 7,859.6 sqm at price of SGD223.9 mn • New site of Northern Gateway, Manchester, UK (May 2018) ₋ A 1.96 acre site at Dantzic Street at price of GBP5.2 mn Land • GLS site on Cuscaden Road, Sing
Slide 22: 2. Review of Operations: Property Development
2. Review of Operations Property Development West Side Place, Melbourne, Australia 22
Slide 23: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Cumulative Expected attr. Cumulative Notes Projects under presale Location presales Expected attr. SFA(1) GDV(1) Expected presale (1) Approximate saleable residential @31.3.2018 (HK$ M) (sq. ft.) (HK$ M) Completion(2) as % of GDV floor areas and expected gross
Slide 24: Australia: Land Replenishment in Perth
Australia: Land Replenishment in Perth Perth City Link Lots 3B, 6 &7, Perth • Selected in May 2017 as preferred proponent for Lots 3B, 6 and 7 of Perth City Link • To be developed together with Lots 2 and 3A acquired in late 2016 • A major project being undertaken by Western Australian Government to
Slide 25: Manchester: Land Assembly Continues
Manchester: Land Assembly Continues Northern Gateway, Manchester • Largest residential opportunity for transformational change ever in Manchester delivering more than 15,000 new homes • Site area will be more than 350 acres (15mn sq. ft.); saleable floorspace is above 2,000,000 sq. ft. • Adjacent to
Slide 26: Singapore: Strategic Expansion
Singapore: Strategic Expansion Hollandia Site on Holland Road • Won the tender in March 2018, at price of SGD183.4 million • Freehold site area of 4,970.8 sqm, to be developed into a residential project of approx. 10,000 sqm GFA(1) • A prime residential enclave of high-end condominiums The Estoril S
Slide 27: Artra, Singapore: Strong Sales Momentum
Artra, Singapore: Strong Sales Momentum • Presale launched in April 2017, with promising sales performance • Located along Alexandra View, right next to Redhill MRT • A single 44-storey tower of 400 units with a mix of two-, three- and five-bedroom apartments from 786 sq ft to 2,583 sq. ft. • Attrib
Slide 28: Marin Point, Hong Kong: Unique Product
Marin Point, Hong Kong: Unique Product • Presale launched in May 2017 • Located at Sha Tau Kok, Hong Kong • Expected SFA: approx. 103,000 sq. ft. with 261 apartments • Expected total GDV: HK$1,078 mn • Expected completion date: FY2019 28
Slide 29: West Side Place, Melbourne: One of Best Selling Projects in Australia
West Side Place, Melbourne: One of Best Selling Projects in Australia • Part of a landmark project of the Group in Melbourne, featuring four high-rise towers located within the CBD • Ritz-Carlton at Tower 1 and Dorsett at Tower 3 • Total residential units: approx. 3,000 • Expected completion: - Towe
Slide 30: The Star Residences: Gold Coast Residential Apartments Above Casino
The Star Residences: Gold Coast Residential Apartments Above Casino • Launched in September 2017 • A 200-meter tower located adjacent to Jupiters Integrated Resort, in the CBD of Gold Coast • First phase of a 5-tower development • Expected attributable SFA: 98,000 sq. ft., expected attributable GDV:
Slide 31: MeadowSide: Landmark Residential Project in Manchester
MeadowSide: Landmark Residential Project in Manchester • A landmark project located in Manchester city • Expected GDV: approx. HK$2,691 million center, around one of the biggest green space in town, adjacent to traffic hub, Victoria • Expected SFA: approx. 557,000 sq.ft. station • Expected completio
Slide 32: Astoria Crest: New Homes in West Kowloon, Hong Kong
Astoria Crest: New Homes in West Kowloon, Hong Kong • Presale launched in December 2017 • Located at Hai Tan Street, Sham Shui Po, Hong Kong • Expected SFA: approx. 20,000 sq. ft. with 72 apartments • Expected GDV: HK$420 mn • Expected completion date: FY2019 32
Slide 33: Hornsey Town Hall, London: Mixed Used Development with a Boutique Hotel
Hornsey Town Hall, London: Mixed Used Development with a Boutique Hotel • Residential presale launched in May 2018 • Expected GDV: approx. HK$1,025 million • Expected SFA: 107,000 sq. ft. • A landmark development with a hotel and art centre around the iconic Town Hall, located at the heart of Crouch
Slide 34: 2. Review of Operations: Hotel Operations & Management
2. Review of Operations Hotel Operations & Management Concept of Dorsett at Queen’s Wharf Brisbane 34
Slide 35: Significant Hidden Value in Hotel Portfolio
Significant Hidden Value in Hotel Portfolio Capital Value Book Value Revaluation Notes City Description Rooms @ 31.3.2018 @ 31.3.2018 Surplus (1) The Group is currently (HK$ M) (HK$ M) (HK$ M) reviewing the possibility Hotels in operation of redeveloping the hotel Hong Kong site 1 Dorsett Wanchai Ho
Slide 36: Strong Operating Momentum
Strong Operating Momentum FY2018 FY2017 YoY change Hong Kong Occupancy rate 93.8% 90.1% +3.7 ppts Average room rate (HK$) 739 695 +6.3% RevPAR (HK$) 693 626 +10.7% Malaysia Occupancy rate 73.9% 66.8% +7.1 ppts Average room rate (MYR) 193 190 +1.6% RevPAR (MYR) 142 127 +11.8% Mainland China Occupancy
Slide 37: Clear Growth Trajectory
Clear Growth Trajectory No. of rooms 12,000 • 23 owned hotels (6,949 rooms) under operation as at 31 10,812 10,419 March 2018 10,000 9,119 8,232 8,091 • Acquisition of 5 TWOC hotels completed in April 2018, 8,000 7,675 6,949 6,743 an addition of 572 rooms 6,000 6,043 6,043 5,429 • 14 hotels (approx.
Slide 38: Track Record of Extracting Value from Hotel Development
Track Record of Extracting Value from Hotel Development FY2018 Silka West Kowloon Date: May 2017 Consideration: HK$450 million Gain: HK$320 million Flexible Capital Deployment Provide additional cash flows to enable the Group to redeploy its resources to FY2013 Dorsett Regency Hotel other investment
Slide 39: New Opening – Dorsett City, London
New Opening – Dorsett City, London • Soft opened in July 2017 • 13-storey hotel, 267 guests rooms • Located right next to the Aldgate Station, with a rooftop bar with views over the City of London 39
Slide 40: New Opening – Dorsett Residences Bukit Bintang, Kuala Lumpur
New Opening – Dorsett Residences Bukit Bintang, Kuala Lumpur • 80 rooms, out of which 52 rooms fully opened in October 2017 • Located in the heart of Kuala Lumpur’s Golden Triangle, with unrivalled views of the city’s skyline and iconic skyscrapers of the Twin Towers and KL Tower. • Infinity pool, f
Slide 41: New Hotels Under Construction (Partial)
New Hotels Under Construction (Partial) Ritz Carlton, Melbourne Ritz Carlton, Perth Walkabout extension, London Hornsey Town Hall, London 41
Slide 42: Hotel Renovation Completed
Hotel Renovation Completed Dorsett Kuala Lumpur, Malaysia • 322 rooms, located in the heart of Kuala Lumpur’s Golden Triangle • Renovation completed in July 2017 42
Slide 43: 2. Review of Operations: Car Park Operations & Facilities Management
2. Review of Operations Car park operations & facilities management 43
Slide 44: Car Park: Organic and Acquisition Growth
Car Park: Organic and Acquisition Growth As at 31 March 2018 As at 31 March 2017 - Revenue for FY2018: HK$666mn, +3.9% YoY No. of No. of No. of Bays No. of Bays Car Park Car Park - Steadily growing profit and cashflow contribution Australia - Organic growth and acquisition Owned and managed 23 4,073
Slide 45: Regional Expansion – Portfolio in Budapest, Hungary
Regional Expansion – Portfolio in Budapest, Hungary • Acquired in October 2017 for EUR21 million • 6 car parks with approx. 1,400 bays located in central district of Budapest • Group’s first car park acquisition in Europe, leveraging on Care Park’s advanced technology platform, further diversifying
Slide 46: Care Assist – Infrastructure Support Ready for Global Expansion
Care Assist – Infrastructure Support Ready for Global Expansion • Care Assist is the newly constructed facility • Operates 24-7 and currently manages facilities in the heart of Care Park’s Head Office in across Australia and New Zealand Melbourne • Goal is to deploy Care Assist across entire portfol
Slide 47: Steadily Growing Facilities Management Services
Steadily Growing Facilities Management Services • Asset-light business model with steady growth • 81 active contracts as at 31 March 2018 (64 as at 31 March 2017) • Facilities management services include: Elland Avenue, Melbourne ✓ Property management ✓ Apartment maintenance ✓ Apartment leasing ✓ Cl
Slide 48: 2. Review of Operations: Gaming and Entertainment
2. Review of Operations Gaming and Entertainment Queen’s Wharf Brisbane Concept 48
Slide 49: Gaming Assets: High Quality Licenses
Gaming Assets: High Quality Licenses ✓ New growth driver when QWB opens ✓ Part of “Asian Wallet” Strategy Queen’s Wharf Brisbane Trans World Corporation The Star Casinos World-class integrated resort Three best in class casinos in Three incumbent casinos in destination to be opened in Czech Republic
Slide 50: Queen Wharf Brisbane Integrated Resort
Queen Wharf Brisbane Integrated Resort Investment Plan Residential Component (Approx., subject to planning) Total FEC Portion Expected SFA Expected GDV FEC’s Stake Component (A$ million) (A$ million) (sq. ft.) (A$ million) Total investment of IR (100%) 2,790 n/a n/a Tower 4 518,000 372 Bank financin
Slide 51: Great Opportunities in IR Business in Australia
Great Opportunities in IR Business in Australia Gaming Market(1) Inbound Tourism Market(2) - A$24 billion gambling market(1) - A$40 billion inbound tourism market, large with - Large, mature and resilient with steady huge growth potentials growth - Asian middle class thematic, especially sought afte
Slide 52: Acquisition of Trans World Corporation
Acquisition of Trans World Corporation • Trans World Corporation Simplified structure – Incorporated in Nevada in 1993, with headquarter in New York FEC – Primarily engaged in the hospitality and gaming business in Germany, Austria and the Czech 100% Republic TWOC • Acquisition Agreement Date: 2 Mar
Slide 53: Strategic Alliance with The Star
Strategic Alliance with The Star • FEC and CTF invested in 4.99% of the Star’s equity respectively (AUD245.2 mn each), allying on market and development • The Star is an ASX 100 listed company (Stock code: SGR.AX), one of incumbent operators in Australia with dominant position, owning and operating
Slide 54: Strategic Benefits to FEC from the Strategic Alliance
Strategic Benefits to FEC from the Strategic Alliance ⚫ Strengthen already established relationship with The Star and CTF ⚫ Forge partnership for potential mixed-use property projects; first right to participate in future The Star development; in principle commitment to participate in other Nominate
Slide 55: 3. Prospects
3. Prospects Concept of the Star Gold Coast, Australia 55
Slide 56: Company Outlook: Exciting Prospects
Company Outlook: Exciting Prospects Strategies to generate new growth: • Deepen regional diversification • Extend “Chinese Wallet” Strategy to “Asian • Focus on cities with strong population or tourism Wallet” Strategy, to capitalize on the growing growth potential affluence of the middle class in A
Slide 57: A Stronger FEC
A Stronger FEC Property Hotel Operation & Car Park Operations Gaming and Development Management and Management Entertainment • A diverse portfolio of quality • One of the largest hotel • A leading parking • 25% interest in the Integrated operators in Asia residential projects in Australia, managemen
Slide 58: Company Awards Demonstrate Recognitions
Company Awards Demonstrate Recognitions Euromoney Best Managed Company in Asia in the Real‐Estate Category Best Executive in Hong Kong - Tan Sri Dato’ David Chiu Best Managed Small Cap Company Hong Kong Best Overall for Corporate Governance Best for Disclosure and Transparency Asiamoney Best for Sha
Slide 59: Company Awards Demonstrate Recognitions (Cont’d)
Company Awards Demonstrate Recognitions (Cont’d) Best Innovation Award 1st China Excellent IR Award Best Director Award – Venus Zhao Institutional Investor Best Investor Relations Professional Second Place Nominated by Buy-Side – Magazine 2017 Ms. Venus Zhao Gold Award: Annual Reports - Cover Design
Slide 60: 4. Appendices
4. Appendices 60 Terrace View of Hornsey Town Hall, London
Slide 61: Proven Track Record
Proven Track Record As at and for the year ended (In HK$m) FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 CAGR Revenue 1,733 2,342 1,654 1,761 3,732 4,066 5,110 3,995 5,005 5,831 14.4% - Sales of properties 951 1,376 245 46 1,946 1,589 2,962 1,971 2,937 3,431 15.3% - Hotel ope
Slide 62: Return to Shareholders
Return to Shareholders FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 CAGR NAV/share(1) (HK$) 6.00 6.70 8.45 9.12 9.02 9.79 10.79 12.41 10.9% Basic EPS (HK cents) 21 23 50 51 51 37 51 69 18.5% Diluted EPS (HK cents) 21 23 50 51 51 36 51 69 18.5% Dividend Total dividend per share (HK cents)
Slide 63: Details of Investment Properties
Details of Investment Properties Current Investment Properties GFA Pipeline Investment Properties Attributable (sq. ft.) GFA (sq. ft.) West Side Place, Melbourne 81,400 FEC Building, Central, Hong Kong(1) 3,000 Elizabeth Quay, Perth 14,800 FEC Building, Nathan Road, Hong Kong(1) 38,000 Aspen Crest,
Slide 64: Australian Casinos Comparison
Australian Casinos Comparison City Sydney Melbourne Brisbane Gold Coast Perth Adelaide Darwin City population(‘000)(2015 June) 4,904 (+1.7% yoy) 4,513 (+2.1% yoy) 2,345 (+2.3% yoy) 614 (+1.6% yoy) 2,112 (+3.4% yoy) 1,277 (+1.0%) 123 (+1.7% yoy) State/territory New South Wales Victoria Queensland Que
Slide 65: Economic and Gaming Industry Overview in Czech Republic
Economic and Gaming Industry Overview in Czech Republic Casino Market in Czech Republic Quick Facts (2016) Czech Austria Germany - Generally smaller scale with focus on Population 10.5 mn 8.6 mn 82 mn foreign tourist play Nominal GDP $194 bn $386 bn $3,303 bn - Casinos mostly located near national b
Slide 66: Thank You
Thank You Questions & Answers FEC Official WeChat 66
Far East Consortium International — FY2018 Earnings Presentation on 6ix