Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2017 Earnings Presentation
52 slides from Far East Consortium International's earnings presentation, June 2017
Slide 1: FY2017 Annual Results
FY2017 Annual Results 1 June 2017
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. FY2017 Annual Results Summary 2. Review of Operations 3. Prospects 3
Slide 4: 1. FY2017 Annual Results Summary
1. FY2017 Annual Results Summary Melbourne night view, Australia 4
Slide 5: FY2017 Annual Financial Highlights
FY2017 Annual Financial Highlights FY2017 FY2016 YoY change Revenue (HK$ M) 5,005 3,995 +25.3% Gross profit (HK$ M) 1,990 1,706 +16.6% Net profit attributable to shareholders (HK$ M) 1,118 734 +52.3% EPS (HK cents) - Basic 51.0 37.0 +37.8% - Fully diluted 51.0 36.0 +41.7% Dividend per share (HK cent
Slide 6: FY2017 Annual Results Highlights
FY2017 Annual Results Highlights • Revenue: HK$5,005 mn, +25.3% YoY Financial Performance • Net profit attributable to shareholders: HK$1,118 mn, +52.3% YoY • Full year dividend increased to HK18.5 cents per share (FY2016: HK 16 cents per share), +15.6% YoY Robust Pre-sales • Record-high cumulative
Slide 7: Business Highlights – Property Development
Business Highlights – Property Development • Upper West Side Stage 4 Manhattan, Melbourne (641 apartments) Projects • King’s Manor, Shanghai (479 apartments, 90 townhouses) Completed • Eivissa Crest(1), Hong Kong (106 apartments) • Angel Meadow at NOMA, Manchester (over 750 apartments, target launch
Slide 8: Business Highlights - Recurring Income Business
Business Highlights - Recurring Income Business • Dorsett City in London, official opening in 1HFY2018 • Hong Kong hotel business stabilized (FY2017 OCC in Hong Kong: 90.1%; up 4.1 Hotel Business ppts YoY) Stabilized with New Hotels in Pipeline • Silka Tsuen Wan opened in Feb 2017 (409 rooms) • Comp
Slide 9: Post-Year End Development
Post-Year End Development • Northern Gateway in Manchester More than 350 acres, equivalent to 15 million sq. ft. Over 10,000 new homes New Projects Acquired • Perth City Link Sites in Australia To develop Lots 3B, 6 and 7 of the Perth City Link in Western Australia • Artra in Singapore (70% inter
Slide 10: Well Balanced Diversified Portfolio
Well Balanced Diversified Portfolio Business diversification allows FEC to take advantage of property cycles in different countries Total Assets by Geography(1) Total Assets by Business Segment(1) Singapore Car park UK operations & 9% 6% facilities Australia and management Mainland New Zealand Prope
Slide 11: Well Balanced Diversified Portfolio
Well Balanced Diversified Portfolio 11
Slide 12: GP Margin Maintained Healthy with Top Line Growth
GP Margin Maintained Healthy with Top Line Growth FY2017 FY2016 Gross profit Gross profit Gross profit Gross profit Revenue (before (after Revenue (before (after depreciation) depreciation) depreciation) depreciation) HK$ M HK$ M % HK$ M % HK$ M HK$ M % HK$ M % Sales of properties 2,937 1,272 43.3%
Slide 13: Strong USD in Group's Favour during Expansion Phase
Strong USD in Group’s Favour during Expansion Phase • Contributions from the Group’s non-Hong Kong operations were affected by the movement of foreign currencies against Hong Kong dollar • Net profit would have been HK$22.3m higher assuming constant exchange rates • Strong USD in the Group’s favour
Slide 14: Consistent NAV Creation
Consistent NAV Creation Net asset value per share As at As at 31.3.2017 31.3.2016 Equity attributable to shareholders of the Company (HK$M) 10,792 10,140 Add: Hotel revaluation surplus (HK$M) 13,354 10,732 Total net asset value (HK$M) 24,146 20,872 No. of shares issued (million) 2,238 2,132 Net asse
Slide 15: Strong Credit Profile
Strong Credit Profile Liquidity Position and Total Assets(1) Net Gearing (2) Short-term/long-term Debt Mix HK$ mn Cash & investment securities Total Assets Short-term Long-term 41,754 37.7% 33,192 36,893 31.5% 29.8% 61% 84% 89% 3,487 3,750 5,628 39% 16% 11% As at 31.3.2015 As at 31.3.2016 As at 31.3
Slide 16: Substantial War Chest to Drive Future Growth
Substantial War Chest to Drive Future Growth • Presales HK$10.7bn provides clear visibility of cash flow stream • War chest can be enhanced by leveraging unencumbered hotels War chest HK$ M Group cash and liquidity @ 31.3.2017 5,628 Undrawn banking facilities - Corporate use 1,900 Undrawn banking fa
Slide 17: Solid Balance Sheet to Support Future Growth
Solid Balance Sheet to Support Future Growth 31.3.2017 31.3.2016 HK$ M HK$ M (1) Bank loans, notes and bonds Debt mix by currencies Due within 1 year 1,431 1,864 MYR Due 1-2 years 4,482 1,691 GBP CNY 2% Due 2-5 years 6,547 7,198 3% 7% Due more than 5 years 814 920 Total bank loans, notes and bonds 1
Slide 18: Proven Track Record
Proven Track Record As at and for the year ended (In HK$m) FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 CAGR Revenue 1,733 2,342 1,654 1,761 3,732 4,066 5,110 3,995 5,005 14.2% Sales of properties 951 1,376 245 46 1,946 1,589 2,962 1,971 2,937 15.1% Hotel operations and management
Slide 19: Reliable Return to Shareholders
Reliable Return to Shareholders FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 CAGR NAV/share(1) (HK$) 6.00 6.70 8.45 9.12 9.02 9.79 10.79 10% Basic EPS (HK cents) 21 23 50 51 51 37 51 16% Diluted EPS (HK cents) 21 23 50 51 51 36 51 16% Dividend Total dividend per share (HK cents) 7 6 13 15 16 16
Slide 20: 2. Review of Operations
2. Review of Operations Property Development Artra, Singapore 20
Slide 21: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Cumulative Expected attr. Expected attr. Expected Cumulative presale Projects under presale Location presales SFA(1) GDV(1) completion(2) as % of GDV @31.3.2017 (HK$ M) (sq. ft.) (HK$ M) % 1 Aspen Crest Hong Kong 1,044 64,000 1,065 FY2019 98% 2 The FIFTH Melbou
Slide 22: Northern Gateway, Manchester
Northern Gateway, Manchester • Partnership with Manchester City Council • Over 10,000 new homes • Site area: more than 350 acres (15mn sq. ft.) 22
Slide 23: Perth City Link, Australia (new land lots acquisition)
Perth City Link, Australia (new land lots acquisition) • FY2016: Acquired Lots 2 and 3A. Development to comprise the 270-room Dorsett Hotel and 350 residential apartments. • FY2017: Preferred proponent for Lots 3B, 6 and 7. Residential site with retail component. To be integrated into Lots 2 and 3A.
Slide 24: Angel Meadow at NOMA, Manchester
Angel Meadow at NOMA, Manchester • More than 750 new homes around the historic Angel Meadow Park • Expected SFA: 551,000 sq. ft. • 4 buildings including a 41- storey glass tower • Submitted planning in May 2017 (expected GDV of HK$2,142mn ) • Targeted launch in late 2017 24
Slide 25: Hornsey Townhall Redevelopment, London
Hornsey Townhall Redevelopment, London • Low entry cost • 130-year lease period • Residential component with over 100,000sq. ft. saleable area • Serviced apartment/co-work/retail to generate income streams • Another example of partnership with local government council 25
Slide 26: JV with the Star and CTF
JV with the Star and CTF • New JV MOUs with The Star and CTF signed to develop The Star casino sites in Sydney and Gold Coast, with planning approval in progress • Approximately 2,000 residential apartments • 2 hotels with around 1,000 rooms Pyrmont, Sydney • Hotel additions in prime locations will
Slide 27: Artra, Singapore
Artra, Singapore • Located next to the Redhill MRT Station • Expected attributable GDV: HK$2,624 mn • 70% interest, launched in April 2017 • 400 units • Attributable SFA: 290,000 sq. ft. • Expected completion: FY2021 27
Slide 28: Marin Point, Hong Kong
Marin Point, Hong Kong • Located at Sha Tau Kok, Hong Kong • Expected attributable SFA: 103,000 sq. ft. • 261 apartments • Expected total GDV: HK$1,075 mn • Launched in May 2017 28
Slide 29: West Side Place (Tower 4), Australia
West Side Place (Tower 4), Australia • Launched in June 2017 • 835 units 29
Slide 30: 2. Review of Operations: Hotel operations & management
2. Review of Operations Hotel operations & management Dorsett Shepherds Bush, London 30
Slide 31: Substantial Development Profit Not Yet Recognised
Substantial Development Profit Not Yet Recognised Capital Value Book Value Revaluation City Description Rooms @ 31.3.2017 @ 31.3.2017 Surplus (HK$ M) (HK$ M) (HK$ M) Hotels in operation Hong Kong 1 Dorsett Wanchai Hong Kong Near Wanchai and Causeway Bay 454 2,965 338 2,627 2 Silka West Kowloon Hong
Slide 32: Hotel Performance on Recovery Track
Hotel Performance on Recovery Track FY2017 FY2016 2H 1H Overall 2H 1H Overall Hong Kong Occupancy rate (i) 92.8% 87.2% 90.1% 86.3% 85.7% 86.0% Average room rate (HK$)(i) 751 632 695 783 679 731 RevPAR (HK$)(i) 697 551 626 676 582 629 Malaysia Occupancy rate 65.4% 68.3% 66.8% 65.4% 66.2% 65.8% Averag
Slide 33: Hotel Performance on Recovery Track (Cont'd)
Hotel Performance on Recovery Track (Cont’d) Group Total FY2017 FY2016 YoY Occupancy rate 77.6% 72.7% +4.9% Average room rate (HK$) 625 666 -6.2% RevPAR (HK$) 485 484 +0.2% Revenue (HK$’000) 1,308,954 1,284,605 +1.9% • Approximately 50% of hotel revenue derived from Hong Kong. • Group ARR in HK$ imp
Slide 34: Sheraton Mirage - Gold Coast
Sheraton Mirage - Gold Coast • Completed acquisition of the Sheraton Mirage with the Star and CTF (the Group has 25% interest) • Addition of this beach front property will add to tourism offering and complement Queen’s Wharf Brisbane as a satellite hotel • Approximate 1 hour drive between Brisbane a
Slide 35: New Opening - Silka Tsuen Wan, Hong Kong
New Opening - Silka Tsuen Wan, Hong Kong • A new build hotel development in Tsuen Wan, Hong Kong • 409 bedroom 3-star business hotel • Complimentary in-town shuttle bus service • Other facilities: gymnasium, multifunction Hall, all-day dining room, coffee shop 35
Slide 36: Dorsett City – Official Opening in 1HFY2018
Dorsett City – Official Opening in 1HFY2018 • Located in Aldgate, City of London • 13-storey hotel, 267 guests rooms • Next to the Aldgate Station and has a rooftop bar with views over the City of London 36
Slide 37: Track Record of Extracting Value from Hotel Disposals
Track Record of Extracting Value from Hotel Disposals FY2017 Silka West Kowloon Date: S&P signed in March 2017 Completed in May 2017 Consideration: HK$450 million Gain: HK$316 million Flexible Capital Deployment FY2013 Dorsett Regency Hotel Date: 28 March 2013 Consideration: HK$802 million Provide a
Slide 38: Clear Pipeline for Mid-term Room Growth
Clear Pipeline for Mid-term Room Growth No. of rooms 12,000 • 21 owned hotels(1) (approx. 6,600 rooms) under 10,000 9,516 10,091 8,281 7,718 operation as at 31.3.2017 6,869 7,302 8,000 6,743 6,043 6,043 5,429 6,000 4,894 • 14 hotels (approx. 3,500 rooms) in the development 3,834 3,901 4,000 pipeline
Slide 39: Hotel Renovation Recently Completed
Hotel Renovation Recently Completed Dorsett Wanchai, Hong Kong Silka Far East, Hong Kong Dorsett Kuala Lumpur, Malaysia • Renovation works done in the • Renovation done in June 2016 • Renovation will be done in 1HFY2017 July 2017 • 240 rooms, located in Tsuen Wan • 454 rooms, located between • 322 r
Slide 40: 2. Review of Operations: Car park operations & facilities management
2. Review of Operations Car park operations & facilities management Festival Car Park, Brisbane 40
Slide 41: Steady Cash Flow with Constant Growth
Steady Cash Flow with Constant Growth As at 31 March 2017 As at 31 March 2016 No. of No. of Car Park No. of Bays Car Park No. of Bays Car Park Revenue Australia Owned and managed 22 4,295 19 3,521 HK$ mn Managed only 325 55,339 283 54,331 Joint Venture owned* 1 383 1 367 New Zealand 700 613 616 623
Slide 42: Regional Expansion – Latest Additions in Manchester and Brisbane
Regional Expansion – Latest Additions in Manchester and Brisbane • Purchase of a car park near the Manchester Airport First entry to UK car park business Total consideration of GBP13.4 million Approx. 1,500 car parking bays with good upside potential Subject to planning, surplus land provide
Slide 43: Care Assist – Infrastructure Support Ready for Global Expansion
Care Assist – Infrastructure Support Ready for Global Expansion • Care Assist is the newly constructed facility in the heart of Care Park’s Head Office in Melbourne • Specifically designed to enhance control room operations from just being an intercom help point to being a fully functional customer
Slide 44: Steadily Growing Facilities Management Services
Steadily Growing Facilities Management Services • Asset-light business model with steady growth • 64 active contracts as at 31 March 2017 • Facilities management services include: Property management Apartment maintenance Apartment leasing Cleaning and laundry services 44
Slide 45: 3. Prospects
3. Prospects The Towers at Elizabeth Quay, Perth 45
Slide 46: Company Outlook – Solid Foundation for Growth
Company Outlook – Solid Foundation for Growth • Continue to invest regionally leveraging on local expertise and taking advantage of property cycles Chinese Wallet Strategy • Pursuing opportunities arising from the anticipated increase in the outbound tourism from Asia • Queen’s Wharf Brisbane will b
Slide 47: 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 48: Company Awards Demonstrate Recognitions (Cont'd)
Company Awards Demonstrate Recognitions (Cont’d) Best Overall Investor Relations (small-and-mid-cap) IR Magazine Best Sector – Real Estate Best Investor Relations Officer (small-and-mid-cap) – Ms. Venus Zhao Gold Award in Governance Gold Award in Social Responsibility The Asset Corporate Award 2016
Slide 49: Appendix: Details of Investment Properties
Appendix: Details of Investment Properties Attributable Current Investment Properties GFA Pipeline Investment Properties GFA (sq. ft.) (sq. ft.) FEC Building, Central, Hong Kong(1) 16,000 The FIFTH, Melbourne 3,200 FEC Building, Nathan Road, Hong Kong(1) 38,000 West Side Place, Melbourne 84,000 Base
Slide 50: Appendix: Casino License Granted in October 2016
Appendix: Casino License Granted in October 2016 Investment Plan Residential Component (Approx., subject to planning) Total FEC Portion Expected SFA Expected GDV FEC’s Stake Component (A$ million) (A$ million) (sq. m.) (A$ million) Total investment of IR (100%) 1,930 n/a n/a Tower 4 48,174 409 Bank
Slide 51: Appendix: Australian Casino Comparison
Appendix: Australian Casino 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 Queen
Slide 52: Thank You
Thank You Questions & Answers FEC Official WeChat 52
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