Centuria Capital Group · ASX:CNI
Centuria Capital — Over Fifty Group — FY2010 Earnings Presentation
23 slides from Centuria Capital's earnings presentation, Aug 19, 2010
Slide 1: 2010 Financial Year Results Presentation
2010 Financial Year Results Presentation August 2010 John McBain – Chief Executive Officer & Matthew Coy – Chief Financial Officer
Slide 2: Serving Generations of Australians
Serving Generations of Australians 2
Slide 3: Understanding Our Financial Report
Understanding Our Financial Report In 2006, new accounting standards governing friendly society and insurance companies were introduced to Australia, these are referred to as “AIFRS” AIFRS compels Over Fifty Group “OFG” to consolidate the accounts of the OFG managed Friendly Society benefit fund
Slide 4: Key Achievements – Improved Profitability
Key Achievements – Improved Profitability Profit guidance achieved Achieved reported NPAT consistent with market guidance provided in February 2010 Improved underlying profits Underlying NPBT $11.2m (2009: $8.8m), increased by 27% Underlying NPAT $7.8m (2009: $6.2m), increased by 27% Und
Slide 5: Key Achievements – Improved Operations
Key Achievements – Improved Operations Ongoing focus on core business Property Funds Management delivered a strong profit result Friendly Society made significant progress on funds flow and new product launch is imminent All other divisions profitable and performing to budget Ongoing initi
Slide 6: Key Achievements – Strengthened Balance Sheet
Key Achievements – Strengthened Balance Sheet Successful capital raising Institutional placement and share purchase plan in December 2009 / January 2010 raised $10.8m for debt reduction and working capital Significant reduction to corporate debt structure Net group cash (cash less corporate
Slide 7: Operating Results (excl. Friendly Society Benefit)
Operating Results (excl. Friendly Society Benefit) Year ended 30 June 2010 2009 % Change Operating Earnings before tax by major division $000’s $000’s Friendly Society 8,925 10,324 Property Funds Management 5,378 (271) Reverse Mortgages 3,130 3,673 Insurance Agency 1,011 470 Corporate (5,150) (5,265
Slide 8: Significant and Non-Recurring Items
Significant and Non‐Recurring Items Year ended 30 June (in $000’s) 2010 2009 % Change Underlying NPBT 11,191 8,840 27% Loss on property valuations (pre-tax) - (6,836) One-off underwriting guarantee by parent company (pre-tax) - (7,271) Net provision for doubtful debt on commercial mortgages (pre-tax
Slide 9: Revenue from Major Divisions
Revenue from Major Divisions Year ended 30 June (in $000’s) 2010 2009 % change Friendly Society 14,023 14,837 (5.5) Property Funds Management 7,111 4,581 55.2 Reverse Mortgages (impact of lower interest rate 16,781 19,480 (13.9) environment) Commercial Mortgages (nil activity in period *) 35 808 (95
Slide 10: Net Tangible Assets per Share
Net Tangible Assets per Share (excl. Friendly Society Benefit Funds) $million Number of Ordinary NTA per share Shares NTA 30 June 2009 $25.626 60.299m $0.43 Movement during the year ended 30 June 2010: - Profit for the period 6.318 - - Cash Flow Hedge Reserve 0.857 - - Share Based Incentive Reserve
Slide 11: Significant Reduction of Corporate Expenses
Significant Reduction of Corporate Expenses % change Year ended 30 June (in $000’s) 2010 2009 2008 (2008-2010) Staffing 6,589 6,888 8,862 (25.7) Finance Expense (excl Reverse Mortgages, NLT and 1,177 1,684 1,525 (22.9) Chisholm) Outsourcing Fees 2,218 2,396 3,120 (28.9) Consulting and Professional 2
Slide 12: Property Funds Management
Property Funds Management Strong profit contribution for period, EBIT $5.4m (2009: $0.3m loss) Property Funds Management is a core business with a strong and highly capable property team, in house management expertise and processes that are very scalable for future growth Two wholly owned subs
Slide 13: Friendly Society
Friendly Society Funds Under Management as at 30 June 2010 were $753m (30 June 2009: $781m) FUM retention has stabilised as redemptions have fallen sharply and inflows have improved with increased interest in Insurance Bonds since Super (pre-tax) contributions were halved New products pipeline
Slide 14: Reverse Mortgages
Reverse Mortgages Value of Mortgages receivable as at 30 June 2010 $205.4m (30 June 2009: $215m). Value of security property in excess of $1.0 billion Very low Loan to Valuation on security held: 17% Non recourse loan outstanding to warehouse funder $176.3m (30 June 2009: $195.1m) held in subs
Slide 15: Significant Reduction to Corporate Debt
Significant Reduction to Corporate Debt Corporate debt reduced by $15.6m to $4.2m for the 12 month period to 30 June 2010 This was further reduced by a further $0.8m to $3.3m as at 31 July 2010 (being a $16.4m reduction in 13 months see below) New commercially favourable terms have been agreed
Slide 16: Growth Strategy
Growth Strategy Property FUM acquisition opportunity is both organic and via corporate acquisition property funds management industry in consolidation phase investor demand strong for organic growth investments Friendly Society competitive tax advantage for new education bond - launched
Slide 17: Appendices – Statutory Account Reconciliations
Appendices – Statutory Account Reconciliations General comment following reconciliation The “Statutory accounts” include the consolidated corporate entities with the Friendly Society Benefit Funds, which OFG is required under AIFRS to consolidate; The “Benefit funds” reflect value of stand alo
Slide 18: Appendix 1: Profit and Loss for Year Ended 30 June 2010
Appendix 1: Profit and Loss for Year Ended 30 June 2010 Statutory accounts Benefit funds Corporate accounts $m $m $m Interest and dividends 40.5 23.9 16.6 Management fees 23.2 - 23.2 Rental income 4.5 - 4.5 Net movement in policyholder funds 12.0 12.0 - Other income 13.7 4.2 9.5 Other expense (4.8)
Slide 19: Appendix 2: Balance Sheet as at 30 June 2010
Appendix 2: Balance Sheet as at 30 June 2010 Statutory accounts Benefit funds Corporate accounts $m $m $m Assets: Cash and equivalents 55.4 41.4 14.0 Trade and other receivables 13.4 ‐ 13.4 Income tax receivable 1.8 6.4 (4.6) Financial assets at fair value 495.7 495.6 0.1 Other financial assets 3.2
Slide 20: Appendix 2: Balance Sheet as at 30 June 2010 (cont.)
Appendix 2: Balance Sheet as at 30 June 2010 (cont.) Statutory accounts Benefit funds Corporate accounts $m $m $m Liabilities: Trade and other payables 5.3 0.1 5.2 Borrowings – Working Capital 4.2 ‐ 4.2 Borrowings – recourse to investment property only 24.0 ‐ 24.0 Borrowings ‐ Reverse Mortgages (non
Slide 21: Appendix 3: Cash flow statement for year ended 30 June 2010
Appendix 3: Cash flow statement for year ended 30 June 2010 Statutory accounts Benefit funds Corporate accounts $m $m $m Cash flows from operating activities Interest received 10.2 9.7 0.5 Dividends received 14.2 14.2 ‐ Management fees received 20.1 ‐ 20.1 Rent, trust and other income received 8.6 0
Slide 22: Appendix 3: Cash flow statement (cont.)
Appendix 3: Cash flow statement for year ended 30 June 2010 (cont.) Statutory accounts Benefit funds Corporate accounts $m $m $m Cash flows from financing activities Proceeds from issue of equity securities 10.4 ‐ 10.4 Loans from/ (to) related entities (8.9) (8.9) ‐ Loans from mortgage holders 24.1
Slide 23: Disclaimer
Disclaimer This document has been issued by Over Fifty Group Limited ABN 22 095 454 336 and contains general information about Over Fifty Group Limited and its related bodies corporate (Over Fifty Group) which is current as at 19 August 2010. The information in this document is in summary form and d