Vital Healthcare Property Trust · NZX:VHP
Vital Healthcare Property Trust — H1 FY2015 Earnings Presentation
30 slides from Vital Healthcare Property Trust's earnings presentation, Feb 26, 2015
Slide 1: Interim Results 31 December 2014
INTERIM RESULTS 31 DECEMBER 2014 DEVELOPING OUR PORTFOLIO DELIVERING ON STRATEGY 26 February 2015 David Carr, Chief Executive Officer Stuart Harrison, Chief Financial Officer
Slide 2: Agenda
AGENDA Result summary Financial summary Healthcare sector Portfolio update Development & acquisition Strategy and outlook 2
Slide 3: Result summary
Result summary
Slide 4: Result Highlights
RESULT HIGHLIGHTS Strong organic growth from established portfolio Earnings & Gross rental income $30.8m capital Net profit before tax $15.6m management Net distributable income of $16.3m LVR of 34.4% Portfolio, WALT at 15.2 years, 99.5% occupancy (5 year average +99%) operational Commen
Slide 5: Financial summary
Financial summary
Slide 6: Financial Performance
FINANCIAL PERFORMANCE Portfolio and operating performance driving financial outcomes Actual Actual change change All NZ$m 1H15 1H14 $m % Gross rental income 30.8 29.9 0.9 3.0% Net rental income 30.1 28.9 1.3 4.3% Operating profit before tax 26.7 25.7 1.0 4.0% Gross distributable income 21.1 19.0 2.1
Slide 7: Gross Rental Income
GROSS RENTAL INCOME Incremental gains across portfolio driving rent growth 7
Slide 8: Balance Sheet
BALANCE SHEET Low gearing providing financial flexibility Actual Actual change change All NZ$m 1H15 FY14 $m % Net Tangible Assets 1.03 1.04 -0.7% Investment properties 631.9 613.1 18.8 3.1% Total assets 641.0 616.0 4.1% Bank debt 216.6 191.4 25.2 13.2% Unit holder funds 352.2 353.5 -1.3 -0.4% Units
Slide 9: Investment Property
INVESTMENT PROPERTY Australian portfolio remains the engine room for growth and diversification 9
Slide 10: LVR Movement
LVR MOVEMENT Strong balance sheet position 10
Slide 11: Foreign Exchange – What's Happened
FOREIGN EXCHANGE – WHAT’S HAPPENED Hedging helps mitigate earnings volatility Transaction Hedging policy 0-6 months: 60-90% 7-12 months: 50-80% 31 Dec, 2014 NZD:AUD 0.9562 11
Slide 12: Treasury Capital Management
TREASURY CAPITAL MANAGEMENT Capital partners supportive of growth and diversification Actual Actual All NZ$m (unless otherwise stated) 1H15 FY14 Drawn debt at period end ($ million) 217.7 192.6 Facility size ($ million) 359.9 369.8 Weighted average cost of debt 5.52% 5.66% Weighted average facility
Slide 13: Healthcare sector
Healthcare sector
Slide 14: Drivers of Private Health Sector
DRIVERS OF PRIVATE HEALTH SECTOR Macro demands driving supply 14 Note: 1. Quarterly PHIAC data to 30 September 2014 and HFANZ to 30 September 2014
Slide 15: Private Health Insurance
PRIVATE HEALTH INSURANCE PHI a core component of private hospital revenue 15 Source: Quarterly PHIAC data to 30 September 2014 and HFANZ to 30 September 2014
Slide 16: IPD Australian Healthcare Index
IPD AUSTRALIAN HEALTHCARE INDEX Healthcare real estate continues to deliver higher relative total returns with lower volatility 16 Source: IPD (A MSCI Brand) ipd.com
Slide 17: Portfolio update
Portfolio update
Slide 18: Diversified Portfolio
DIVERSIFIED PORTFOLIO 25 properties comprising over 1,500 hospital beds and 72 operating theatres NT QLD 4 WA 1 SA 1 NSW 6 VIC NZ 6 6 TAS 1 18 As at 31 December 2014
Slide 19: Core Portfolio Metrics
CORE PORTFOLIO METRICS Sector leading metrics underpins defensive characteristics Occupancy: Occupancy high due to high lease renewal rates and leasing up of vacant space. Approximately 900 sqm vacant across 4 properties WALT: Long WALT supports a secure and defensive income profile Structured1 rent
Slide 20: Lease Expiry Profile
LEASE EXPIRY PROFILE Near term expiry risk very low 20
Slide 21: Development and acquisition
Development and acquisition
Slide 22: Development Update – Completed developments
DEVELOPMENT UPDATE Completed developments since July 2012 22
Slide 23: Development Update – Current developments
DEVELOPMENT UPDATE Current developments 23 Note: Vital has commenced A$40.8m of developments in the first half of FY15. Stage 1 at Hurstville of A$28m was announced on 27 Sept, 2013.
Slide 24: Hurstville Private Hospital, Sydney
HURSTVILLE PRIVATE HOSPITAL, SYDNEY Forecast completion mid 2015. Hospital continued functioning throughout development December 2013 January 2015 24
Slide 25: Strategic Acquisitions
STRATEGIC ACQUISITIONS Acquisition of strategic sites to secure and deliver growth with key partners Acquisition framework and rationale Strong growth within existing site envelope has necessitated a review of long term asset management plans Historic relatively low site coverage ratios (underva
Slide 26: Strategic Acquisitions – Epworth Hospital case study
STRATEGIC ACQUISITIONS Securing the future……. Case study – Epworth Hospital and Medical Centre, Box Hill, Melbourne Epworth Hospital (A$81.8m) is in its 10th year of operation and has 223 beds and 9 theatres and is approaching capacity Landlocked on 3 sides by public roads and part of rear bound
Slide 27: Strategy & outlook
Strategy & outlook
Slide 28: Strategic Value Drivers
STRATEGIC VALUE DRIVERS Successful execution on ‘sum of parts’ Management Aligned / Stable / Experienced / Credible / Capable Brownfield Sustainable Stabilised developments Capital & long term Acquisitions portfolio (capacity Treasury earnings & expansion) value 99.5% occupancy A$40.8m Entered
Slide 29: Summary & Outlook
SUMMARY & OUTLOOK Financial Solid financial result and strong capital base Foreign exchange policy mitigating volatility in earnings and capital position Portfolio Sound portfolio metrics a platform for sustainable earnings over the long term Management focus on Allamanda expiry in November
Slide 30: Disclaimer
DISCLAIMER This presentation has been prepared by Vital Healthcare Management Limited (the "Manager") as manager of the Vital Healthcare Property Trust (the "Trust"). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not
Vital Healthcare Property Trust — H1 FY2015 Earnings Presentation on 6ix