Rural Funds Group · ASX:RFF
Rural Funds — Investor Presentation (October 2017)
25 slides from Rural Funds's investor presentation, Oct 23, 2017
Slide 1: Corporate presentation
Managed by: Corporate presentation October 2017 Managed by:
Slide 2: Disclaimer
Managed by: Disclaimer This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (“RFM”) as the responsible entity of Rural Funds Group (“RFF”). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805).
Slide 3: Agenda
Managed by: Agenda 1. Portfolio update 2. Portfolio impact 3. Strategy & outlook 4. Appendices 3
Slide 4: Portfolio update
Managed by: 1 Portfolio update Finishing country on Natal, Qld, Feb 2016
Slide 5: Cattle property acquisition
Managed by: Cattle property acquisition RFF has contracted to acquire three contiguous Queensland cattle properties referred to as Natal Key property and lease details • Natal is a 390,600 ha aggregation which includes: • Three cattle properties Natal Downs, Longton and • approx. 150,000 ha of under
Slide 6: Cattle property acquisition
Managed by: Cattle property acquisition The lessee DA & JF Camm Pty Ltd (Camm), operates an integrated cattle business, the Camm Agricultural Group (CAG) Operational overview Asset locations Nine properties comprised of: • three breeding and finishing properties acquired by RFF (Natal) (A) Locations
Slide 7: Cattle property acquisition
Managed by: Cattle property acquisition Development aims to increase carrying capacity and valuation Natal stage 1 development • Natal is located 225km south-west of Townsville * • Significant development opportunities identified: • Stage 1: Water points and fencing on breeding land budgeted for $2.
Slide 8: Portfolio impact
Managed by: 2 Portfolio impact Mooral, Hillston NSW Dec 2016
Slide 9: Rural Funds Group (ASX:RFF)
Managed by: Rural Funds Group (ASX:RFF) RFF adjusted total assets are $660m on a pro forma basis following Camm transaction Key information Weighted average lease expiry profile3 Pro forma1 30 June 2017 30 June 2017 Adjusted total assets2 $587.5m $660.0m Adjusted net assets2 $402.2m $402.2m Adjusted
Slide 10: Portfolio assets and lessees
Managed by: Portfolio assets and lessees Assets leased across six sectors and with a combined WALE of 13 yrs Notes: • Shaded areas denote different climatic zones. Source: Bureau of Meteorology (BOM) • Valuations as at 30 June 2017 with water entitlements held at fair value • Plant and equipment ren
Slide 11: Portfolio diversification by FY18f revenue
Managed by: Portfolio diversification by FY18f revenue The new cattle properties acquired improve lessee, sector and climatic zone diversification1 Lessees2 Lease indexation mechanisms Climatic zone Sector type3 Notes: 1. Broken line reflects revenue attributable to Camm properties in FY18 forecast
Slide 12: Development and capex
Managed by: Development and capex Development and capex are undertaken by lessees, funded by RFF, and attract additional income Development and capex Total FY18 FY19 FY20 ($m) Almonds: Kerarbury Development 2,500 ha orchard $28.1 $13.7 $25.2 $67.0 Almonds: Tocabil Development 600 ha orchard $4.8 $1.
Slide 13: Strategy & outlook
Managed by: 3 Strategy & outlook Griffith Poultry sheds, NSW 2009
Slide 14: Strategy
Managed by: Strategy Clear strategic objectives and acquisition assessment principles • Management of the existing portfolio and • Principles when assessing acquisitions: expansion through acquisitions with the aim of: – Long term leases and quality tenants – increasing earnings and distribution gro
Slide 15: Acquisition strategy
Managed by: Acquisition strategy Strategy includes investing across the full range of the asset continuum, whilst ensuring the asset mix continues to fund distributions (Explanatory Memorandum, October 2013) Spectrum of investment opportunities1 Note: 1 The income and growth figures presented in the
Slide 16: Forecasts
Managed by: Forecasts FY18 forecast AFFO increase from 12.5cpu to 12.7cpu • RFF has a target of 4% p.a. DPU growth. This is Key forecasts FY18 supported by a combination of a low payout ratio and AFFO growth from: AFFO per unit 12.7 cents – annual lease indexation; combination of fixed and CPI linke
Slide 17: Appendices
Managed by: 4 Appendices Geier vineyard, SA, June 2014
Slide 18: Camm asset and key lease details
Managed by: Camm asset and key lease details Camm: Asset and lease details Property • Three contiguous cattle properties (“Natal”) being purchased from members of the Camm Agricultural Group (CAG) description • 390,600 ha suitable for breeding and backgrounding with current carrying capacity of 32,4
Slide 19: Summarised pro forma adjusted balance sheet
Managed by: Summarised pro forma adjusted balance sheet Summarised pro forma adjusted balance sheet1 As at Camm Pro forma 30 June 2017 transaction 30 June 2017 $ $ $ Cash 3,838,000 - 3,838,000 Property investments2 548,257,000 57,488,000 605,745,000 Plant and equipment 5,127,000 - 5,127,000 Other as
Slide 20: Debt facility
Managed by: Debt facility Debt metrics Interest rate hedges Pro forma Duration Hedge 30 June 2017 Start Maturity Amount 30 June 2017 (years) rate Term debt facility limit1,2,3 $250.0m $275.0m Current Dec 18 1.2 3.77% $25m Term debt drawn $164.5m $237.0m Current Mar 20 2.4 2.50% $10m Headroom $85.5m
Slide 21: FY17 results summary
Managed by: FY17 results summary Key metrics as at 30 June 2017 • AFFO growth of 3.2 cents per unit 12mths ended 12mths ended primarily a result of almond orchard 30 June 2017 30 June 2016 developments and Select Harvests Ltd market rent review Income Total comprehensive income 34,238,000 34,774,000
Slide 22: Key assets and counterparts
Managed by: Key assets and counterparts Almond orchards Poultry farms Vineyards Cattle assets Cotton assets Brief 1,814 ha mature almond 154 sheds on 17 farms 666 ha mature vineyards Six cattle properties and 4,880 ha cropping property description: orchards and 3,100 ha of on seven properties breedi
Slide 23: Key assets and leases further details
Managed by: Key assets and leases further details Almond orchards Poultry farms Vineyards Cattle assets Cotton assets Description: 1,814 ha across two 154 sheds on 17 farms Seven vineyards with 666 ha Two cattle operations 4,880 ha cropping property mature almond orchards consisting of 134 sheds on
Slide 24: Rural Funds Management
Managed by: Rural Funds Management RFM is a fund and farm manager with 20 years experience in Australian agriculture Key information Board and management team contacts and tenure Established 1997 Total $713m Assets under Rural Funds Group: $660m management RFM Poultry: $9m David Bryant Michael Carro
Slide 25: Corporate information
Managed by: Corporate information ACN 077 492 838 AFSL 226701 Canberra Office Level 2, 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 managing good assets with good people Website: www.ruralfunds.com.au For further information: For media enquiries: Investor relat
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