Aspen Group Limited · ASX:APZ
Aspen — H1 2009 Earnings Presentation
44 slides from Aspen's earnings presentation, Feb 25, 2009
Slide 1: Half Year Results Presentation
For personal use only Aspen Group Half Year Results Presentation February 2009 “Creating wealth through intelligent property investment” Half Year Results 2009 1
Slide 2: Aspen Overview: Meeting the Market Challenges
Aspen Overview Meeting the Market Challenges For personal use only The property sector is experiencing a difficult and uncertain operating environment which has presented several challenges including: Confidence in asset values – Aspen has undertaken a comprehensive review of its investment portfo
Slide 3: Aspen Overview: Corporate Structure
Aspen Overview Corporate Structure For personal use only Direct Property Funds Equity Portfolio Management Investments • 11 Investment properties • 8 Equity investments Assets Managed $378M * 7 Divisions ($1B) ($54M) • Inventories $24M • Other ($9M) (unencumbered) • Portfolio of diversified • Drivin
Slide 4: Contents
Contents For personal use only 1. Half Year Overview 2. Financial Summary 3. Property Portfolio 4. Funds Management 5. Outlook 6. Appendix 1 – Property Portfolio 7. Appendix 2 – Financial Position Half Year Results 2009 4
Slide 5: Half Year Overview
1. Half Year Overview For personal use only ¾ Strong $17.1 million underlying profit given difficult market conditions ¾ 83% of total revenue recurring in nature (property rentals to contribute 66% of FY09 total operating income) ¾ Distribution policy reviewed however continue to be paid from underl
Slide 6: Contents
Contents For personal use only 1. Half Year Overview 2. Financial Summary 3. Property Portfolio 4. Funds Management 5. Outlook 6. Appendix 1 – Property Portfolio 7. Appendix 2 – Financial Position Half Year Results 2009 6
Slide 7: Financial Summary: Financial Performance for Half Year
2. Financial Summary Financial Performance for Half Year For personal use only H1 09 ($M) H1 08 ($M) Change % Income from operations Rental income 20.2 16.2 25% Funds management 10.1 14.5 30% Other Income 4.5 3.6 34.8 34.3 Expenses Direct property expenses (6.2) (4.7) 32% Employment (6.7) (6.8) Admi
Slide 8: Reconciliation of Underlying Profit to Net Loss
2. Financial Summary Financial Performance for Half Year For personal use only Reconciliation of Underlying Profit to Net (Loss) / Profit as per Financial Report H1 09 ($M) H1 08 ($M) Underlying Net Profit 17.1 19.0 Swap revaluations (10.4) 1.3 Property revaluations (10.6) 30.4 Share option expense
Slide 9: Income Breakdown
2. Financial Summary Income Breakdown For personal use only Revenue and Other Income - by source 40 35 30 25 $ million 20 15 10 5 0 Rental income from Recurring Fees Establishment Fees Financial & other income TOTAL REVENUE investment properties & OTHER INCOME H108 H109 Half Year Results 2009 9
Slide 10: Cashflow Management
2. Financial Summary Cashflow Management For personal use only ¾ Substantial cost control measures announced in November 08 will reduce costs by 12% in FY09 and by 20% in FY10 ¾ Distribution Policy revised in November from circa 90% underlying earnings to 70%-80% underlying earnings ¾ Benefiting fro
Slide 11: Debt Structure: Debt Profile
2. Financial Summary Debt Structure For personal use only Debt Profile Gearing 38%* Percentage Senior Debt Hedged 51% Average Hedge Maturity Profile 2.0 yrs Weighted average cost of funds 7.33% Senior Debt Facility Expiry Feb 2012 Look-through gearing 44% Net interest cover covenant 1.5 times Actual
Slide 12: Debt Facilities
2. Financial Summary Debt Facilities For personal use only Facility Amount Purpose Maturity Covenants NAB Tranche A $224 million Long Term Core February 2012 LVR 60% to Dec 2010 Facility stepping down to 55% by 1/1/2011 NAB Tranche B $40 million Working Capital December 2009 N/A LVR as per Tranche A
Slide 13: Application of Debt Facilities
2. Financial Summary Debt Structure For personal use only Application of Debt Facilities (31 December 2008) Property portfolio $ 130.0m Funds management loans ** $ 88.4m* Assets held for sale/seeded $ 42.4m* $260.8m * To be repaid as equity and/or debt is secured within each funds management entity
Slide 14: Contents
Contents For personal use only 1. Half Year Overview 2. Financial Summary 3. Property Portfolio 4. Funds Management 5. Outlook 6. Appendix 1 – Property Portfolio 7. Appendix 2 – Financial Position Half Year Results 2009 14
Slide 15: Property Portfolio Overview
3. Property Portfolio Overview For personal use only Key Indicators Dec 2008 June 2008 ¾ Weighted Average Lease Expiry 4.1 years 4.0 years ¾ Weighted Average Occupancy 97% 97% ¾ Weighted Average Cap rate 9.8% 7.8% Highlights ¾ 25% uplift in rental income (on corresponding period) ¾ Karratha Village
Slide 16: Key contributors to rental income growth
3. Property Portfolio Key contributors to rental income growth For personal use only ¾ Total portfolio rental income has increased 25% from 1H08 to 1H09. ¾ Major contributors to this growth include: Contribution to Rental growth portfolio 25% growth Karratha - 14% Currie St 17% 5% Alcoa 86% 5% Septi
Slide 17: Tenancy Income Profile
3. Property Portfolio Tenancy Income Profile For personal use only ¾ Government and major corporates account for 75% of total portfolio income ¾ Government tenants contribute 24% of income ¾ Major corporates contribute 51% of income including: ¾ Woodside (Karratha Village, WA) 21.14% ¾ Elders (Elder
Slide 18: Investment Properties
3. Property Portfolio Investment Properties For personal use only New Valuation % Change to New Cap Rate Prior Cap Rate Property: ($m) Book Value (%) (%) Septimus Roe, WA 88.0 -6.43% 11.00 7.75 Alcoa Office Complex, WA 27.0 1.50% 8.50 7.75 Elders Woolstores, WA 58.0 0.87% 11.00 8.50 Karratha Village
Slide 19: Leasing Profile
3. Property Portfolio Leasing Profile For personal use only Lease Expiry Profile by Financial Year Key Tenant Expiry 35% Financial % of % Rental Tenant Income Year Income 30% Centrelink 2011 7% Elders* 2012 13% 25% Minister for Works 2014 3% Woodside 2014 21% 20% Alcoa 2014 3% DIMIA 2015 6% 15% L’Or
Slide 20: Valuation Outlook
3. Property Portfolio Valuation Outlook For personal use only Aspen View of Market ¾ Further cap rate movement is unlikely to be significant given current levels. The major impact for capital values going forward will be falls in rental values ¾ General view across majority of asset classes is that
Slide 21: Contents
Contents For personal use only 1. Half Year Overview 2. Financial Summary 3. Property Portfolio 4. Funds Management 5. Outlook 6. Appendix 1 – Property Portfolio 7. Appendix 2 – Financial Position Half Year Results 2009 21
Slide 22: Funds Management Overview
4. Funds Management Overview For personal use only ¾ Leverages Aspen’s core asset management expertise ¾ Gross assets under management $1 billion ¾ Growing and maturing fee income base across multiple sectors and asset types ¾ In-house skill sets across all property sectors ¾ 6 established funds man
Slide 23: Divisions
4. Funds Management Divisions For personal use only Aspen Aspen Aspen Aspen Aspen Aspen Branding Parks Diversified Living Developments Villages Communities Modular Product Tourism and Residential Development Retirement Sector Core Income Affordable Accommodation Estates Fund Series Aged Care Accommo
Slide 24: Distribution
4. Funds Management Distribution For personal use only ¾ Majority of funds closed end with wholesale/sophisticated investor base ¾ Restrictive liquidity facilities in place on open ended funds, capping potential redemptions ¾ Retention of national business development team ¾ Maintaining focus on inc
Slide 25: Aspen Parks Property Fund
4. Funds Management Aspen Parks Property Fund For personal use only Strategy To acquire, manage and expand a portfolio of park properties providing regular income and capital growth, capture benefits of well located land holdings with high income yields Period in Review ¾ National portfolio remained
Slide 26: Funds Management: Aspen Parks Property Fund
5. 4. Funds FundsManagement Management Aspen Parks Aspen Property Parks Fund Property Fund For personal use only Geographically diverse network of 25 Parks Half Year Results 2009 26
Slide 27: Aspen Diversified Property Fund
4. Funds Management Aspen Diversified Property Fund For personal use only Strategy To acquire commercial property assets in the $5m – $30m range with a focus on high yielding assets and/or with value add opportunities Period in Review ¾ Challenging market conditions continue to impact the Fund’s per
Slide 28: Aspen Living
4. Funds Management Aspen Living For personal use only Strategy Leverages Aspen’s in-house expertise in residential land subdivision to develop quality land estates, provide attractive returns to investors and long term recurring funds management income for Aspen. Period in Review ¾ Difficult market
Slide 29: Aspen Living
4. Funds Management Aspen Living For personal use only Aspen Aspen Fern Bay St Leonards Seaside Dunsborough Whitsunday Total Estate Lakes Shores Village Number of Lots Remaining 1,123 827 1,138 829 3,917 Projected Gross Realisable Value $395m $247m $375m $245m $1.3b Location Dunsborough Bowen Perth
Slide 30: Aspen Developments
4. Funds Management Aspen Developments For personal use only Strategy To create a series of development funds using in-house development and sector expertise i.e. health, retirement, commercial and residential. Period in Review (Aspen Development Fund No 1) ¾ Limited sales activity however significa
Slide 31: Aspen Developments: Adelaide City Central
4. Funds Management Aspen Developments For personal use only Adelaide City Central Tower 1 Darling (Completed) House (Redevelopment) Tower 2 Tower 8 (Completed) Tower 4 Tower 7 Apartments Electra House (Redevelopment) GPO Half Year Results 2009 31
Slide 32: Norwest Private Hospital (Construction progress)
4. Funds Management Aspen Developments For personal use only Norwest Private Hospital (Construction progress) Half Year Results 2009 32
Slide 33: Norwest Private Hospital (artists impression)
4. Funds Management Aspen Developments For personal use only Norwest Private Hospital (artists impression) Half Year Results 2009 33
Slide 34: Aspen Select Property Fund
4. Funds Management Aspen Select Property Fund For personal use only Strategy Open ended hybrid product seeking to provide exposure across traditional and non-traditional sectors (parks, communities, villages) and access to wholesale closed end opportunities Total return target of 12% pa with income
Slide 35: Aspen Villages
4. Funds Management Aspen Villages For personal use only Strategy To acquire, develop and manage residential accommodation villages utilising modular home product, specifically targeting early retirees requiring affordable accommodation solutions in a secure resort style village. Offer homes at 40-6
Slide 36: Aspen Communities
4. Funds Management Aspen Communities For personal use only Strategy To develop and manage built form retirement villages and aged care facilities in a sustainable community environment. Typical sites will comprise 200-300 living units on 7-12ha land. Period in Review ¾ Fund not fully syndicated due
Slide 37: Contents
Contents For personal use only 1. Half Year Overview 2. Financial Summary 3. Property Portfolio 4. Funds Management 5. Outlook 6. Appendix 1 – Property Portfolio 7. Appendix 2 – Financial Position Half Year Results 2009 37
Slide 38: Outlook
5. Outlook For personal use only ¾ H2 will continue to be very challenging most notably on availability and cost of debt and pressure on asset values ¾ Strong organic rental growth within portfolio and increased contribution from Karratha Village ¾ Rental income from investment properties accounts f
Slide 39: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Aspen Group (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anyth
Slide 40: Appendix Property Portfolio: Office
Appendix 1 Property Portfolio Office For personal use only Septimus Roe Square, Perth Alcoa Office Building, Perth Building Area 17,483 sqm plus 126 car bays Building Area 7,888 sqm plus 230 car bays Tenants 38 tenants including BankWest, Subway, Dome Cafe, Sun, State Police Tenants Alcoa of Austral
Slide 41: Appendix Property Portfolio: Office
Appendix 1 Property Portfolio Office For personal use only 55 Currie Street, Adelaide St. Kilda Rd, Melbourne 33 York Street, Sydney Building Area 25,655 sqm plus 95 car parking bays Building Area 8,470 sqm plus 173 car parking bays Building Area 539 sqm plus 3 car bays Tenants Centrelink, Dept Immi
Slide 42: Appendix Property Portfolio: Industrial
Appendix 1 Property Portfolio Industrial For personal use only Elders Woolstores, Fremantle Noble Park. Melbourne Rocklea, Brisbane Building Area 100,800 sqm Building Area 42,747 sqm plus 400 parking bays Building Area 14,555 sqm plus 150 car bays Tenant Elders Limited (subsidiary of Futuris Limited
Slide 43: Appendix Property Portfolio: Accommodation
Appendix 1 Property Portfolio Accommodation For personal use only Karratha Village, WA Land Area 2.9ha Accommodation 180 rooms Tenants Woodside Occupancy 100% Book Value $41.0 million Half Year Results 2009 43
Slide 44: Appendix: Financial Position
Appendix 2 Financial Position For personal use only 31 Dec 09 30 Jun 08 Key Changes Assets $m $m $m Current Assets Cash and Other 61.2 84.7 23.5 Non Current Investment Properties 407.7 393.8 13.9 Equity Investments 53.8 81.9 28.1 Inventories 24.5 35.0 10.5 Other 93.3 57.3 36.0 Total Assets 640.5 652