Cromwell Property Group · ASX:CMW
Cromwell Property — Shareholder Meeting (November 2016)
37 slides from Cromwell Property's shareholder meeting presentation, Nov 30, 2016
Slide 1: PROPERTY GROUP
PROPERTY GROUP O Ket @ G @ os Oo 2) e S 7
Slide 2: Important Information & Disclaimer
Important Information & Disclaimer This presentation including its appendices Cromwell Property Group does not guarantee any Fund ARSN 604 286 071 (PCF), Cromwell Phoenix (Presentation) is dated 30 November 2016 and has particular rate of return or the performance of Opportunities Fund ARSN 602 776
Slide 3: Directors
Directors Geoffrey H. Levy, AO Paul Weightman Michelle McKellar Jane Tongs Independent Non- Managing Director / Independent Non- Independent Non- Executive Chairman Chief Executive Officer Executive Director Executive Director Richard Foster Andrew Konig Marc Wainer Independent Non- Non-Executive No
Slide 4: Meeting Agenda
Meeting Agenda Open Chairman’s Address CEO’s Address Business CMW – 2016 Annual General Meeting 4
Slide 5: Chairman's Address
Chairman’s Address Mr Geoffrey H. Levy, AO CMW – 2016 Annual General Meeting 5
Slide 6: FY16 – Strong Year Benefits From Transactional Items
FY16 – Strong Year Benefits From Transactional Items Distributions per security up 4.3% to 8.20 cps cps Ahead of original forecast 8.10 cps 9.50 FY16 Payout ratio of 87% 9.00 Growth profile over the last five years (FY11) 8.50 Growth in earnings of 5.80% p.a. Growth in distributions of 3
Slide 7: Global Market. Global Competition. Global Opportunity.
Global Market. Global Competition. Global Opportunity. Offshore capital is the market maker globally In Australia it’s > 50% of transaction volume USA is largest market and also cross border investor (40% of total Commercial Real Estate total global volume) 6/10 of next largest markets are i
Slide 8: Cromwell's Strategy Remains Consistent And Unchanged
Cromwell’s Strategy Remains Consistent And Unchanged Targeting an 80:20 balance between direct property investments and funds management earnings to provide 10 Year Australian Government Bond Yields over the last 12 months % secure, stable and growing distributions through the 3 property cycle 2.8
Slide 9: CEO's Address
CEO’s Address Mr Paul Weightman CMW – 2016 Annual General Meeting 9
Slide 10: FY16 Highlights – Strong Year Benefits From Transactional Items
FY16 Highlights – Strong Year Benefits From Transactional Items Statutory profit1 of $329.6 million (FY15 $149 million) FY16 FY15 Change Operating profit1 of $164.5 million (FY15 $144.9 million) Statutory profit ($m)1 329.6 148.8 122% Operating profit per security up 13% to 9.41 cps ahead Stat
Slide 11: Property Portfolio – Valuations Continue To Rise
Property Portfolio – Valuations Continue To Rise Fair value increase in investment property of $250.3 million net of property improvements, lease costs and incentives Weighted Average Cap rate tightened by 0.84% to 7.05% (7.89% FY15) Cap rates tighter than previous peak but spread to bond rate
Slide 12: Property Portfolio – Tenant Quality Remains Robust
Property Portfolio – Tenant Quality Remains Robust Geographic Sector Tenant Diversification1 Diversification1 Classification1 ACT 0.1% 9.0% 1.4% Government 19.0% 2 21.2% Authority NSW 27.0% Office 45.7% Listed QLD Retail Company/Subsidiary Other 45.0% VIC 33.1% Private Company 98.5% Tenant profile
Slide 13: Property Portfolio – Actively Managing Lease Expiry Risk
Property Portfolio – Actively Managing Lease Expiry Risk Solid leasing year with deals signed for 97,000 sqm or approximately 22% of the total portfolio. WALE of 6.34 years Lease Expiry Profile % Gross Income 60% Expiry profile cushioned against current soft conditions 52.0% Average fixed revi
Slide 14: Property Portfolio – $300 Million Investment For The Future
Property Portfolio – $300 Million Investment For The Future Tuggeranong Office Park, ACT $172 million investment expected to be completed September 2017 Federal Government signed on 15 year lease over 30,000+ sqm Also awarded the $42 million fitout due to commence in March 2017 Achieved 5 st
Slide 15: Funds Management – Substantial Increase in Operating Profit
Funds Management – Substantial Increase in Operating Profit Wholesale Funds operating profit of $19.0 million ($2.6m FY15) Change in AUM ($bn)1 Retail Funds operating profit of $10.0 million ($1.4 million FY15) Total AUM of $10.3 billion ($10.1 billion FY15) Wholesale AUM of $5.6 billion ($6
Slide 16: Funds Management – Wholesale Platform Building
Funds Management – Wholesale Platform Building €2.4 billion in assets traded in Europe, continuing with operational integration of European platform including new hires, new products and launch of single brand strategy early 2017 Netherlands Diversified Partnership launched with €325m of €407 mi
Slide 17: Funds Management – Retail Generates Results
Funds Management – Retail Generates Results Retail Funds operating profit of $10.0 million and FUM of $1.7 billion Significant transactional income from Cromwell Box Hill Trust asset ($7 million). Unitholders voted to sell the asset sold in September 2015 for $156 million an 18.6% premium above
Slide 18: Funds Management – Proposal for Investa Office Fund (ASX:IOF)
Funds Management – Proposal for Investa Office Fund (ASX:IOF) Cromwell is of the view that its Proposal is compelling in the current market environment, being: an all cash offer made to all unitholders a 5.7% premium to IOF’s 30 day volume weighted average price of $4.21 per IOF unit a 5.2%
Slide 19: Capital Management – Managing To Cycle and Opportunity
Capital Management – Managing To Cycle and Opportunity Cromwell’s strategy is to be able to access different CMW Group Gearing sources of capital at different points in the cycle Interest rate exposure capped until May 2019 Current Cash and Cash Equivalents of $95.6 million Group gearing1 of
Slide 20: Capital Management – Diversified Debt Profile
Capital Management – Diversified Debt Profile1 Facilities are diversified across eight lenders and a Convertible Bond issue with varying maturity dates Weighted average debt expiry of 3.6 years with 86% not expiring until FY19 and beyond Debt Expiry Profile - Summary $700.00 Key Terms of Convert
Slide 21: Capital Management – Interest Rate Hedging
Capital Management – Interest Rate Hedging Targeting lower interest rates again in FY17 Interest rates for $1.2bn are hedged or fixed until May 2019 Weighted average margin of 1.52% on all current facilities Accreting interest rate cap entered into in August 2014 will Average interest rate
Slide 22: Operational Platform – Sustainability Performance Improves
Operational Platform – Sustainability Performance Improves GRESB Rankings Cromwell has been reporting on its Sustainability performance since 2009 Sustainability is about who we are and what we strive to be i.e. our commitment to continuous improvement Focus is on benchmarking against key glob
Slide 23: Outlook – Market Disruption, Opportunity in Europe
Outlook – Market Disruption, Opportunity in Europe €350 European Deal Volumes, 2007 – Q2 2016 (€ in billions) Brexit has inserted some uncertainty into UK market, likely €300 to be some volatility in short term until exit finalised €250 European transactions volumes softer in 2016, down from €20
Slide 24: Outlook – Australian Economy Transitioning, Property Demand High
Outlook – Australian Economy Transitioning, Property Demand High Economic growth suppressed in near term due to end of mining boom and forecast fall in residential construction Falling A$ to US$0.75 is providing some offset by boosting tourism, education, exports, currency sensitive industries
Slide 25: Outlook – Strategy Remains Consistent And Conservative
Outlook – Strategy Remains Consistent And Conservative cps FY17 operating profit guidance of not less 9.40 than 8.40 cps 9.00 FY17 distribution guidance of not less than 8.60 8.34 cps 8.20 Conservative assumptions that recognise the potential downside risks from: 7.80 Brexit 7.40 China slo
Slide 26: Formal Voting
Formal Voting Mr Geoffrey H. Levy, AO CMW – 2016 Annual General Meeting 26
Slide 27: Voting Cards
Voting Cards Yellow card Blue card White card Voting card Non-voting attendee card Visitor card CMW – 2016 Annual General Meeting 27
Slide 28: Items of Business for the Company
Items of Business for the Company CMW – 2016 Annual General Meeting 28
Slide 29: Item 1: Consideration of the Financial, Directors' and Auditor's Reports
Item 1 Consideration of the Financial, Directors’ and Auditor’s Reports This is not the subject of a formal resolution and no proxies apply CMW – 2016 Annual General Meeting 29
Slide 30: Item 2: Re-election of Ms Michelle McKellar as a Director
Item 2 Re-election of Ms Michelle McKellar as a Director “That Ms Michelle McKellar, who retires by rotation in accordance with the constitution of Cromwell Corporation Limited and offers herself for re-election, is re-elected as a director of Cromwell Corporation Limited.” Number % of proxies recei
Slide 31: Item 3: Re-election of Mr Marc Wainer as a Director
Item 3 Re-election of Mr Marc Wainer as a Director “That Mr Marc Wainer, who retires by rotation in accordance with the constitution of Cromwell Corporation Limited and offers himself for re-election, is re-elected as a director of Cromwell Corporation Limited.” Number % of proxies received For 832,
Slide 32: Item 4: Remuneration Report
Item 4 Remuneration Report “That the remuneration report of Cromwell Corporation Limited for the year ended 30 June 2016 is adopted.” Number % of proxies received For 938,882,507 97.06% Open 10,008,624 1.03% Against 18,431,613 1.91% Abstain 2,782,433 CMW – 2016 Annual General Meeting 32
Slide 33: Item of Business for the Group
Item of Business for the Group CMW – 2016 Annual General Meeting 33
Slide 34: Item 5: Approval of the Performance Rights Plan
Item 5 Approval of the Cromwell Property Group Performance Rights Plan “That the Cromwell Property Group Performance Rights Plan, the terms of which are summarised in the Explanatory Memorandum that accompanies and forms part of this Notice of Meeting, and the issue of securities under that plan, be
Slide 35: Questions, Comments
Questions, Comments CMW – 2016 Annual General Meeting 35
Slide 36: Thank you for your time
Thank you for your time CMW – 2016 Annual General Meeting 36
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