Rural Funds Group · ASX:RFF
Rural Funds — UBS Australasia Conference 2017
20 slides from Rural Funds's conference presentation, Nov 14, 2017
Slide 1: UBS Australasia Conference
Managed by: For personal use only UBS Australasia Conference Presented by: David Bryant, Managing Director RFM Managed by: November 2017
Slide 2: Disclaimer
Managed by: Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (“RFM”) as the responsible entity of Rural Funds Group (“RFF”). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Acti
Slide 3: Assets and lessees
Managed by: Assets and lessees The Rural Funds Group (ASX:RFF) is a diversified agricultural REIT1,2 For personal use only Notes: 1. Shaded areas denote different climatic zones. Source: Bureau of Meteorology (BOM). Geographic diversification reduces lessee concentration in any one climatic zone and
Slide 4: Strategy
Managed by: Strategy Improve earnings and distribution growth, diversification, liquidity and decrease operating costs per unit For personal use only Key principles underpinning assessment of acquisition opportunities Acquire properties with income secured by long-term leases • Maintain agricultural
Slide 5: Potential acquisitions
Managed by: Potential acquisitions Investment opportunities in agricultural sectors are plotted based on their level of infrastructure vs natural resource components and subsequent return characteristics For personal use only Spectrum of investment opportunities1 Note: 1. The income and growth figur
Slide 6: Productivity and agricultural investment returns
Managed by: Productivity and agricultural investment returns Productivity gains have significant implications for farm land values. Over the period 1900 to 2016 agricultural commodities declined in real terms compared to farm land which has appreciated For personal use only Commodities, CPI and farm
Slide 7: Productivity capex
Managed by: Productivity capex Development and other capex attracts additional lease income and is funded, in part, from retained AFFO. Growth in asset value is monetised at rent reviews where applicable For personal use only Productivity and other capex1 Total Indexation and FY18 FY19 FY20 Descript
Slide 8: Almonds: Kerarbury orchard development
Managed by: Almonds: Kerarbury orchard development $175m committed for the 2,500 ha development. Lease income calculated on cumulative capital outlay and is indexed at CPI for the lease duration of 22.75 years (commenced Oct 2015) For personal use only 2017 plantings. Land has been prepared (laser l
Slide 9: Almonds: Kerarbury orchard development
Managed by: Almonds: Kerarbury orchard development $175m committed for the 2,500 ha development. Lease income calculated on cumulative capital outlay and is indexed at CPI for the lease duration of 22.75 years (commenced Oct 2015) For personal use only 2016 plantings (1,218ha). Kerarbury, NSW, Octob
Slide 10: Almonds: Kerarbury orchard development
Managed by: Almonds: Kerarbury orchard development $175m committed for the 2,500 ha development. Lease income calculated on cumulative capital outlay and is indexed at CPI for the lease duration of 22.75 years (commenced Oct 2015) For personal use only Pump station, fertigation system and 800 ML wat
Slide 11: Almonds: Kerarbury orchard development
Managed by: Almonds: Kerarbury orchard development $175m committed for the 2,500 ha development. Lease income calculated on cumulative capital outlay and is indexed at CPI for the lease duration of 22.75 years (commenced Oct 2015) For personal use only RFF funds initial maintenance costs such as pru
Slide 12: Cotton: Lynora Downs development
Managed by: Cotton: Lynora Downs development Development of additional water storage aims to increase farm profitability and thus value through the use of underutilised water entitlements and expansion of the irrigated cropping area For personal use only Lynora Downs Water: River water entitlements
Slide 13: Cattle: Water points and pasture improvement
Managed by: Cattle: Water points and pasture improvement Water points and pasture improvement increase carrying capacity and productivity which are a primary influence on valuation For personal use only Case study: Water points and pasture utilisation1 Case study: Water points and pasture utilisatio
Slide 14: Cattle: Gulf & central Qld development
Managed by: Cattle: Gulf & central Qld development Gulf & central Qld cattle properties are now operating at 27.5% higher carrying capacity compared to the initially assessed capacity when purchased in July 2016 For personal use only Development capex Fig 1: Mutton Hole, Gulf – water points Total in
Slide 15: Cattle: Natal aggregation development
Managed by: Cattle: Natal aggregation development Natal has 150,000 ha of breeding land that currently has inadequate water distribution as well as 21,000 ha of finishing land suitable for cultivation and pasture improvement For personal use only Operator: Camm Agricultural Group (CAG) Stage 1 devel
Slide 16: Rent review profile and indexation
Managed by: Rent review profile and indexation AFFO growth is achieved by annual lease indexation, market rent reviews, reinvestment of retained cash and acquisitions For personal use only Natural resource assets - rent review and lease renegotiation profile (10yrs)1 Indexation mechanisms2 6 5 FY18f
Slide 17: Acquisition environment
Managed by: Acquisition environment Fragmented sector with capital constrained, ageing owner/operators. The need for intergenerational transfer provides acquisition and development opportunities For personal use only Farms by size - ABARES1 Average age of farmers2 Capital sources for investment2 100
Slide 18: Acquisition track record and performance
Managed by: Acquisition track record and performance RFF has demonstrated a track record of acquisitions and growth For personal use only RFF trading price and acquisitions1 October 2017 Natal aggregation (cattle) contracted October 2016 November 2016 as part of $72.5m $2.40 Murrumbidgee Lynora Down
Slide 19: Conclusion
Managed by: Conclusion For personal use only RFM key information 1. REIT structure with quality assets and quality lessees Established 1997 Total $713m 2. Income growth through annual lease indexation, market rent reviews, Assets under Rural Funds Group: $660m reinvestment of retained cash and manag
Slide 20: Corporate information
Managed by: Corporate information For personal use only ACN 077 492 838 AFSL 226701 Canberra Office Level 2, 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: www.ruralfunds.com.au For further information: For media enquiries: Investor relations enquiries: