Abacus Group · ASX:ABG
Abacus — Merger or Acquisition (June 2023)
36 slides from Abacus's merger presentation, Jun 7, 2023
Slide 1: Investor Briefing Presentation
INVESTOR BRIEFING PRESENTATION 7 JUNE 2023
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Purpose The purpose of this presentation (Presentation) is to provide Abacus Property Group securityholders with preliminary information about the Proposal which, if approved and implemented, will result in the de-stapling of Abacus Property Group and the creation of
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Forward looking statements Some of the statements appearing in this Presentation may be in the nature of forward looking statements. Forward looking statements or statements of intent in relation to future events in this Presentation should not be taken to be a foreca
Slide 4: Agenda
INVESTOR BRIEFING PRESENTATION Agenda 01 Overview of the De-Stapling 02 Abacus Storage King 03 Abacus Group post De-Stapling 04 Details of the Offer 05 Additional Information 06 Key Risks Storage King Epping, VIC
Slide 5: Overview of the De-Stapling
OVERVIEW OF THE DE-STAPLING Storage King Robina, QLD
Slide 6: Background to the Proposal
BACKGROUND TO THE PROPOSAL Proposal delivers investors the ability to have a pure play exposure to Self Storage Abacus Property Group (‘Abacus’)1 has successfully managed and enhanced the Storage King brand to become the most recognised Self Storage Self Storage platform brand in Australia and New Z
Slide 7: ASK Will Continue to Be Managed by Abacus Group
ASK WILL CONTINUE TO BE MANAGED BY ABACUS GROUP ASK will continue to benefit from Abacus Group’s strategic oversight, and corporate and listed market expertise Fund manager with a strategic stake of up Abacus Group (ASX:ABG)1 to 19.9% in ASK Management fees and investment $5.6bn AUM2 income Commerci
Slide 8: Positioning Abacus Storage King
POSITIONING ABACUS STORAGE KING Sector specific exposure to ASK’s $3.1 billion Investment Portfolio1 including the Storage King Platform Embedded Storage Fully integrated owner, operator and manager with demonstrated operational expertise from the King portfolio embedded Storage King operating pla
Slide 9: Abacus Storage King
ABACUS STORAGE KING Storage King Woonona, NSW
Slide 10: Abacus Storage King Owned Network
ABACUS STORAGE KING OWNED NETWORK Strategically curated portfolio and Australia and New Zealand’s most recognised Self Storage brand1 135 2 Assets owned by ASK QLD 112 trading stores3 25 23 future stores4 • SUNSHINE COAST 1 WA 11 • BRISBANE 16 • GOLD COAST 8 SA 3 NSW ACT 49 11 AUCKLAND • Metro vs •
Slide 11: ASK Investment Portfolio Snapshot
ASK INVESTMENT PORTFOLIO SNAPSHOT Investment property metrics (at 30 April 2023) AUS NZ Total Self Storage operating margin forecast4 FY24 pro forma ($m) No. of assets (#)1 116 15 131 Storage revenue 194.3 NLA (sqm)2 505,006 77,855 582,861 Other revenue (net)5 10.9 Occupancy (%) 91.1% 92.7% 91.4% To
Slide 12: Development and Expansion Pipeline
DEVELOPMENT AND EXPANSION PIPELINE Development pipeline aiming to deliver 15 Self Storage future stores in the short to medium term Spent to date1 Cost to complete2 Est. completion value1 Development NLA1 Expansion NLA $170m $200m $434m 87,100sqm 18,400sqm Self Storage development pipeline (sqm) Geo
Slide 13: Storage King Operating Platform
STORAGE KING OPERATING PLATFORM Focused platform providing in-house Self Storage management services to ASK and third party owner partners Established in 1998, the day-to-day operations of Storage King are overseen by co-founder and CEO Michael Tate Storage King track record Storage King’s c.500
Slide 14: Competitive Landscape
COMPETITIVE LANDSCAPE Market consolidation continues to drive acquisition opportunities in a fragmented sector “Storage King is the most recognised Self Storage brand in Australia and New Zealand”. Self Storage Association Australasia’s State of the Industry 2022 report Top 5 most recognised Self St
Slide 15: Track Record of Operational Performance
TRACK RECORD OF OPERATIONAL PERFORMANCE Storage King delivers sector leading operating metrics in Self Storage Historical occupancy trend1 Abacus Self Storage portfolio Listed peer 93.2% 92.8% 90.9% 91.7% 89.4% 88.6% 88.5% 89.2% 88.9% 88.4% 88.1% 87.9% 87.2% 85.4% 86.1% 82.4% 81.4% 80.4% 80.4% 77.6%
Slide 16: Self Storage Capital Deployment
SELF STORAGE CAPITAL DEPLOYMENT $1.4 billion deployed into Self Storage acquisitions since FY18 Movement in Self Storage Investment Portfolio ($m)1,2,3 Acquisition of Storage King platform FY214 1. Includes equity accounted investments and other assets. 2. Includes impact of post balance date transa
Slide 17: Abacus Group's Management of ASK
ABACUS GROUP’S MANAGEMENT OF ASK Abacus Group continues to provide corporate strategy, operational oversight and investment expertise Abacus Group Management Services Make recommendations in relation to ASK’s corporate strategy and portfolio composition Corporate strategy Prepare ASK’s business
Slide 18: Proposed ASK Board of Directors
PROPOSED ASK BOARD OF DIRECTORS ASK will be overseen by a majority independent Board of Directors John O’Sullivan Stephanie Lai Karen Robbins Independent Chair Independent Non-Executive Director Independent Non-Executive Director John has over 45 years' experience as a corporate lawyer, investment
Slide 19: ASK Pro Forma Statement of Profit and Loss
ASK PRO FORMA STATEMENT OF PROFIT AND LOSS ASK pro forma FY24 forecast Statement of Profit and Loss1 $m ASK pro forma FY24 forecast FFO1 $m Storage income 198.7 Pro forma forecast NPAT 80.1 Fee income 16.2 Adjustments: Share of profit from equity accounted investments 0.5 Depreciation and amortisati
Slide 20: ASK Pro Forma Statement of Financial Position
ASK PRO FORMA STATEMENT OF FINANCIAL POSITION ASK pro forma key financial metrics1 $m ASK pro forma statement of financial position1 $m Total assets 3,079.4 Cash and cash equivalents 67.1 Net tangible assets 2,056.6 Investment properties4 2,634.9 Acquisition capacity2 380.2 Gearing (%)3 26.8% Equity
Slide 21: Abacus Storage King ESG Initiatives
ABACUS STORAGE KING ESG INITIATIVES Environmental Social Governance Solar roll out ongoing with 52 sites Storage King community initiatives raising Storage King continues to identify having solar installed, delivering 1,235Kw funds for: suppliers in high-risk categories and work of Solar Capacity at
Slide 22: Abacus Group Post De-Stapling
ABACUS GROUP POST DE-STAPLING 2 King Street, Fortitude Valley QLD
Slide 23: Abacus Group Post De-Stapling
ABACUS GROUP POST DE-STAPLING Abacus Group will continue to be an active investor and manager of Commercial real estate A $2.5 billion eastern seaboard focused portfolio1 with exposure to markets with deep tenant pools (71% in Portfolio fundamentals Sydney and Melbourne) Commercial market fundamen
Slide 24: Abacus Group Portfolio Summary
ABACUS GROUP PORTFOLIO SUMMARY Abacus Group will continue to own and manage its current $2.4 billion Commercial property portfolio1 Retail & Portfolio metrics Office Other Total Office lease expiry profile4 No. of assets (#) 18 6 24 38% NLA (sqm)2,3 130,822 62,256 193,078 Occupancy (%)3 94.1% 93.3%
Slide 25: Abacus Group Overview
ABACUS GROUP OVERVIEW Office Abacus Group will continue to own and manage a Commercial portfolio $1.8bn / 18 assets Abacus Group will be the fund manager of ASK Accordingly, Abacus Group will have diverse income streams including: Retail and Other – Rental income from diversified property inve
Slide 26: Details of the Offer
Storage King Storage Coburg KingNorth, Brookvale VIC DETAILS OF THE OFFER Storage King Granville, NSW
Slide 27: Details of the ASK Offer
DETAILS OF THE ASK OFFER Indicative key dates As part of the Proposal, Abacus is proposing to conduct a Securityholder Offer of new ASK Securities Trading halt and Institutional Securityholder Mid June (Offer) Offer Abacus is seeking to raise approximately $225m under the Offer and the targeted
Slide 28: Offer Summary
OFFER SUMMARY Proceeds from the Offer will be used to: Sources of funds $m Uses of funds $m Acquisition costs • Position ASK’s capital structure with its pro-forma gearing expected to be associated with Storage reduced to 26.8% at completion of the Offer; Offer proceeds 225 King Castle Hill, 21 Wool
Slide 29: Additional Information
ADDITIONAL INFORMATION Storage King Gregory Hills, NSW
Slide 30: Specific Assumptions
SPECIFIC ASSUMPTIONS Assumption Commentary Storage income has been forecast on a property-by-property basis based on historic and current storage rental rates and occupancy of existing Self Storage centres, with forecasts based on Abacus Storage King Directors best estimate assumption for future occ
Slide 31: Specific Assumptions
SPECIFIC ASSUMPTIONS Assumption Commentary Forecast development capital expenditure has been made on a property-by-property basis for existing development and expansion Capital expenditure projects. Such capital expenditure relates to planning costs, consultant fees, incentives and construction cost
Slide 32: Key Risks
KEY RISKS Storage King Brookvale, NSW
Slide 33: Key Risks
KEY RISKS The risks set out below are not necessarily listed in order of materiality and do not constitute an exhaustive list ASFML, the responsible entity of ASPT and Manager of ASOL, is a wholly owned subsidiary of Abacus Group. As of all risks regarding the Proposal or an investment in Abacus G
Slide 34: Key Risks
KEY RISKS 2. Main risks of an investment in Abacus Storage King (post completion of the Proposal) Valuations Demand for storage space The value of the portfolio of Self Storage Properties, or individual assets within the portfolio, may be impacted Various factors may adversely affect the demand for
Slide 35: Key Risks
KEY RISKS legislation and regulations, and minimise the risks associated with work health and safety incidents and plant and equipment usage. If it does not have adequate resources to achieve any of these, Abacus Storage King may suffer a lack of customer or employee satisfaction, a decline in reven
Slide 36: Key Risks
KEY RISKS 3. Main risks of an investment in Abacus Group (post completion of the Proposal) Financial covenants Demand for commercial properties Factors such as falls in rental income, falls in asset values, increased interest expenses and the inability to Various factors may adversely affect the dem