Argosy Property Limited · NZX:ARG
Argosy Property — FY2012 Earnings Presentation
24 slides from Argosy Property's earnings presentation, May 25, 2012
Slide 1: Argosy Property Full Year Results Presentation
ARGOSY PROPERTY FULL YEAR RESULTS PRESENTATION 25 MAY 2012
Slide 2: FY12 Highlights
FY12 HIGHLIGHTS Dividend of 6.0 cents per share for the 12 months to 31 March 2012. Guidance is for a similar level in 2013. Internalisation and corporatisation achieved. Bank facility restructured. Total portfolio value of $905 million. Average property value $13.9 million. Stable property valuatio
Slide 3: Share Price Performance
SHARE PRICE PERFORMANCE 125 120 115 110 Gross Prices Indexed to 100 105 100 95 90 85 Mar-11 Mar-12 Oct-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Nov-11 Dec-11 Jan-12 Feb-12 Argosy Property Limited NZ Property Gross Index NZX 50 Index Note* On 1 March 2012 Argosy Units ceased to be quoted and were
Slide 4: Financial Overview
Argosy Financial Overview
Slide 5: Financial Performance
FINANCIAL PERFORMANCE FY12 FY11 Net rental income $71.2m $72.3m Other income $9.9m $0.0m Interest expense $(30.8m) $(29.5m) Loss on derivatives $(12.5m) $(7.7m) Administration expenses $(6.5m) $(7.8m) Incentive fee to former manager $(0.5m) - Abnormals and amortisation $(37.5m) $(1.3m) Realised gain
Slide 6: Distributable Income
DISTRIBUTABLE INCOME FY12 FY11 Profit/(loss) before income tax $(3.0m) $28.7m Adjust for: Revaluation (gains)/losses on investment property $(3.7m) $(2.1m) Investment disposal gains $0.0m $(0.6m) Derivatives fair value adjustment $12.5m $7.6m Internalisation $22.2m Corporatisation $0.8m Christchurch
Slide 7: Financial Position
FINANCIAL POSITION FY12 FY11 Change Securities on issue 558.5m 549.2m 1.7% Shareholders funds (less intangible assets) $488.4 $505.7m (3.4%) Net tangible asset backing per share (cents) 87.5c 92.1c 4.6c Investment properties $905.2m $960.1m (5.7%) Other assets $24.1m $15.1m Total assets $929.3m $975
Slide 8: Movement in NTA per Share
MOVEMENT IN NTA PER SHARE cps 95.0 94.0 93.0 92.1 (2.8) 92.0 91.0 90.0 (0.1) (1.7) 89.0 0.7 (0.6) 88.0 (0.1) 87.5 87.0 86.0 85.0 84.0 83.0 82.0 81.0 80.0 31 MARCH 2011 Internalisation & Unsolicited Interest Revaluation Movement Other 31 MARCH 2012 related costs merger rate in shares (after tax) offe
Slide 9: Investment Properties
INVESTMENT PROPERTIES 980 960 940 920 900 880 860 840 820 800 2011 Disposals Capex Capitalised Capitalised Revaluation 2012 Investment /Impairment lease tenant Gain Investment $m Properties incentives incentives Properties
Slide 10: Interest Rate Management
INTEREST RATE MANAGEMENT As at 31 March 2012 Fixed rate debt comprised 94.4% of total debt as at 31 March 2012. The average interest rate paid (including margins and line fees) in FY12 was 7.20% (compared with 7.57% in FY11). The duration of the hedge portfolio is 5.93 years 41.60% 35.81% 17.91% 4.6
Slide 11: Covenants
COVENANTS FY12 FY11 Loan to valuation ratio – based on: Fair market value of properties (incl. held for sale) $905.2m $960.6m Total borrowings $384.6m $412.4m Not to exceed 50% (until June 2012 then 45% ) 42.5% 42.9% Interest cover ratio – based on: Net interest expense (FY11 – 9 months) $30.1m $22.
Slide 12: Portfolio Overview
Argosy Portfolio Overview
Slide 13: Leasing Environment
LEASING ENVIRONMENT We see a more cautious property market with lower levels of occupier activity and a longer decision making process. However, the leasing environment continues to improve in most sectors with vacancy rates continuing to drop across all sectors. Effective market rents, taking into
Slide 14: Leasing Environment (cont.)
LEASING ENVIRONMENT (CONT.) The retail sector continues to face challenges but activity levels for the 2012 calendar year are expected to improve and tenant Christmas and Boxing Day sales were strong. Annual retail sales to December 2011 were 8% up on last year and 2.2% for the quarter - market expe
Slide 15: Portfolio Issues for Focus
PORTFOLIO ISSUES FOR FOCUS Occupancy remains a key focus as values are fundamentally affected by weighted average lease term and projected incentive levels Rental reviews – ensuring that the Company is well positioned to gain rental increases when these become available. Stock selection - increased
Slide 16: Strategy
STRATEGY The core strategic focus remains on risk mitigation, capital management and portfolio positioning for the future. Risk mitigation is achieved through a quality diversified portfolio and active management of tenant relationships. The largest tenant in the portfolio remains the Department of
Slide 17: Portfolio Mix
PORTFOLIO MIX 12% 37% 35% 74% 14% Retail Auckland Commercial Wellington Industrlal Regional 28%
Slide 18: Lease Maturity
LEASE MATURITY 44 18% 17% 16% 15% Percentage of portfolio (by income) 14% 13% 23 18 12% 21 11% 16 10% 35 9% 17.9% 8% 29 7% 12 6% 12.4% 12.4% 8 5 5% 10.5% 9.9% 9.0% 4% 4.6% 7.3% 5.8% 3% 2% 4.2% 1% 0% Vacant Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 The number above each ba
Slide 19: Manawatu Business Park
MANAWATU BUSINESS PARK Steady progress is being made at Manawatu Business Park (MBP) and the asset remains sound. Subdivision works are almost complete and titles should be obtained for the remaining lots by the middle of 2012. A final price adjustment will take place following the completion of sub
Slide 20: Portfolio Positioning for the Future
PORTFOLIO POSITIONING FOR THE FUTURE 49 new leases last year 22 lease renewals or extensions Sales of vacant property (Rebel Sports and Porirua) Sale of higher risk property (Porirua)
Slide 21: Valuations
VALUATIONS As at 31 March 2012 Increase in property valuations of $3.7 million Portfolio valuation $905 million Wellington properties impacted by insurance increases. Passing yield after revaluations 8.02% Market yield after revaluations 8.24% Christchurch property impaired to $4.05m.
Slide 22: Valuations (cont.)
VALUATIONS (CONT.) Book value Valuation Difference Revaluation % 31/3/12, pre 31/3/12 revaluation ($000) ($000) ($000) Industrial 328,812,868 329,533,957 721,089 0.22% Commercial 253,899,690 255,250,000 1,350,310 0.53% Retail 318,878,750 320,465,000 1,586,250 0.49% TOTAL* 901,591,308 905,248,957 3,6
Slide 23: Disclaimer
DISCLAIMER This presentation has been prepared by Argosy Property Limited. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making an
Slide 24: Thank You
Argosy Thank You