Aspen Group Limited · ASX:APZ
Aspen — H1 FY2016 Earnings Presentation
31 slides from Aspen's earnings presentation, Feb 23, 2016
Slide 1: 2016 Half Year Results Presentation
Aspen Group For personal use only 2016 Half Year Results Presentation 23 February 2016 1
Slide 2: Agenda
AGENDA For personal use only 1 Review of the half year 2 Portfolio update 3 Conclusion Mr. Frank Zipfinger Appendices 2
Slide 3: Review of First Half FY16
REVIEW OF FIRST HALF FY16 Aspen is in a strong position. APPF sale completed. Business simplified. Attractive portfolio For personal use only 1 and $61.3 million cash on hand • Sale of 42% interest at 38% premium ($16.2 million) to APPF NAV • Equivalent to 20% premium at asset level APPF sale • Term
Slide 4: Strong Position to Move Forward
STRONG POSITION TO MOVE FORWARD Board focus is on maximising securityholder value For personal use only • Resetting the business following the successful APPF sale • Grow the business in affordable accommodation, with a yield focus Broader definition of affordable accommodation Cycle out of exis
Slide 5: NAV per Security Uplift
NAV PER SECURITY UPLIFT Increase in NAV per security in 1HFY16 of $0.05 to $1.311 - $0.54 is in cash For personal use only Positive impact of sale of APPF of $0.19 ($22.5m) Negative impact of devaluation of AKV of $0.09 ($10.0m) 1.60 1.40 (0.09) 0.15 0.04 $0.05 0.03 (0.03) (0.05) 1.20 Net Other
Slide 6: Capital Management
CAPITAL MANAGEMENT Potential for strong earnings and distribution upgrades For personal use only The strong financial position of Aspen provides significant acquisitions capacity Even post a 10% security buyback, $100.0 million in acquisitions would result in the proforma gearing of Aspen Group
Slide 7: Accommodation Portfolio Snapshot
ACCOMMODATION PORTFOLIO SNAPSHOT Aspen now holds five accommodation properties with significant development upside For personal use only Two acquisitions completed over the half Tomago Van Village, Newcastle NSW Adelaide Caravan Park, SA Successful track record of seven acquisitions totallin
Slide 8: Portfolio Weighting to Permanent Residential
PORTFOLIO WEIGHTING TO PERMANENT RESIDENTIAL Portfolio focus toward residential / permanents has increased For personal use only Sale of APPF has increased the percentage of sites in the portfolio that are permanent / residential (and fewer seasonal short-stay properties) The only 100% short-sta
Slide 9: Acquisition of Adelaide Caravan Park
ACQUISITION OF ADELAIDE CARAVAN PARK Multiple value add opportunities identified For personal use only New focus in on-line sales and marketing Revenue for the first three months of ownership is up 15% over the prior corresponding period All of this gain is due to on-line bookings, which compr
Slide 10: Other Property Assets
OTHER PROPERTY ASSETS Aspen Karratha Village (AKV) For personal use only Carrying value of AKV to $12.0 million Write-down from the carrying value of $22.0 million as at 30 June 2015 Reflects continued severe weakness in the resources sector with substantial falls in commodity prices Indepen
Slide 11: Mill Hill Capital Proposal
MILL HILL CAPITAL PROPOSAL For personal use only Formal conflict protocols have been adopted by the Board The proposal will only be reviewed and negotiated by the directors excluding Mr. Carter Process will require Independent valuations supporting the acquisition price Independent Expert’
Slide 12: 2016 Half Year Results Presentation
Aspen Group For personal use only 2016 Half Year Results Presentation 23 February 2016 12
Slide 13: Appendices
For personal use only Appendices 13
Slide 14: Accommodation Portfolio Details
ACCOMMODATION PORTFOLIO DETAILS Mandurah Tomago Adelaide Aspen Four Lanterns For personal use only Gardens Van Caravan Total Karratha Estate Estate 1 Village Park Village State NSW WA NSW SA - WA Mixed Segment / accommodation 100% 100% short- Transient 100% permanent residential / - type permanent s
Slide 15: Acquisition of Tomago Van Village
ACQUISITION OF TOMAGO VAN VILLAGE Located 18 km from the Newcastle CBD For personal use only Adjacent to the Tomago industrial area, which is a substantial source of customer demand 1 156 sites, 136 of which are licensed for long-term utilisation Almost all of the short-stay cabins are used
Slide 16: Acquisition of Adelaide Caravan Park
ACQUISITION OF ADELAIDE CARAVAN PARK Located 3km from the centre of the Adelaide CBD For personal use only Property backs onto the River Torrens and is within walking distance to the Adelaide Oval and Adelaide CBD 76 short-term sites (45 tourist cabins / 31 caravan / tent sites) Ingoing yield
Slide 17: Development: Site Recycling
DEVELOPMENT: SITE RECYCLING Significant opportunity for site recycling and upgrade For personal use only Site recycling and upgrade is a key source of value Example of Four Lanterns, Leppington Modern home product to meet contemporary Site was bought back for $2,000 in June 2015 customer dem
Slide 18: Four Lanterns: Expansion
FOUR LANTERNS: EXPANSION Development to unlock significant 30% expansion of sites For personal use only Property purchased in January 2015 Consisted of 102 homes in various condition Since acquisition, over 5% of sites have been purchased and recycled with modern homes Detailed asset managem
Slide 19: Tomago Van Village: Expansion / Redevelopment
TOMAGO VAN VILLAGE: EXPANSION / REDEVELOPMENT Acquired with consistent / reliable income stream in place, with the ability to augment with additional For personal use only permanent dwellings Property purchased in August 2015 Licensed for 136 long-term sites Existing DA for an additional 24 re
Slide 20: Mandurah Gardens Expansion
1 MANDURAH GARDENS EXPANSION Heads of Agreement on adjacent site For personal use only 63 DA approved long-term sites with additional 11 long-term sites subject to DA approval and a further three long-term sites subject to environmental approvals (potential 77 total sites), which adds to 158 exist
Slide 21: Development: Indicative Timetable
1 DEVELOPMENT: INDICATABLE TIMETABLE Development expansion pipeline beginning to ramp up For personal use only Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Four Lanterns Concept Feasibility analysis Market research FIP DA Prepare Lodge/Receipt Detailed Design CC & Tender Selling: Tomago C
Slide 22: Financial Highlights
FINANCIAL HIGHLIGHTS Operating earnings lower due to sale of APPF and sale of non-core assets For personal use only Distribution for 1H FY16 in line with guidance at 4.6 cps Change from 1H Key financial metrics 1H FY16 2H FY15 1H FY15 FY16- 1H FY15 Revenue $31.1m $31.7m $33.8m (8%) Statutory pro
Slide 23: Operating Earnings
OPERATING EARNINGS 1HFY16 1HFY15 For personal use only $m CPS $m Profit from operations Accommodation - Aspen Group properties 3.5 3.1 2.8 - APPF properties 9.3 8.3 7.1 - APPF management fees / equity 0.2 0.2 - Non-core 1.6 1.4 5.4 Total gross profit 14.6 12.9 15.3 Operating expenses / depreciation
Slide 24: Statutory Performance
STATUTORY PERFORMANCE For personal use only 1H FY16 1H FY15 $m CPS $m Operating profit 3.9 3.5 5.4 Profit / (loss) from discontinued operations (0.2) (0.2) 2.1 Revaluation of Aspen Karratha Village (10.0) (8.8) (12.0) Fair value gain on deconsolidation of APPF 17.5 15.5 - Transaction / acquisition c
Slide 25: Balance Sheet
BALANCE SHEET 31-Dec-15 For personal use only (proforma) 31-Dec-15 30-Jun-15 $m $m $m 1 Cash 61.3 6.4 23.3 Spearwood South 29.0 29.0 28.3 Aspen Karratha Village 12.0 12.0 22.0 2 Accommodation property 39.5 37.7 199.7 3 Equity investment in APPF - 46.3 - 4 Assets held for sale / other 12.7 27.2 89.1
Slide 26: APZ Operating Earnings Deconsolidated
APZ OPERATING EARNINGS DECONSOLIDATED APPF deconsolidated and reflected as equity accounted investment For personal use only 1HFY16 1HFY15 $m CPS $m Profit from operations Accommodation - AKV 2.2 1.9 2.8 - Residential / short stay 1.3 1.2 - - APPF management fees / equity 2.0 1.8 1.2 Non-core / othe
Slide 27: APZ Profit / Loss Deconsolidated
APZ PROFIT / LOSS DECONSOLIDATED APPF deconsolidated and reflected as equity accounted investment For personal use only 1H FY16 1H FY15 $m CPS $m Accommodation / resource operating profit 3.5 3.1 0.4 Industrial operating profit 1.6 1.4 5.2 Development operating profit / (loss) - - (0.1) Other (2.4)
Slide 28: APZ Balance Sheet Deconsolidated
APZ BALANCE SHEET DECONSOLIDATED APPF deconsolidated and reflected as equity accounted investment For personal use only 31-Dec-15 30-Jun-15 $m $m Cash 6.4 21.5 Accommodation assets 51.6 41.2 Spearwood / assets held for sale 37.1 74.3 Equity investment 60.9 45.1 Other 4.4 6.0 Total assets 160.4 188.1
Slide 29: Non-Core Assets
NON-CORE ASSETS For personal use only Carrying value Dec-15 Property Segment / Accommodation type $m 1 Midland, Perth WA Industrial 2.5 Aspen Whitsunday Shores (AWSS), Bowen QLD Englobo residential development site 3.7 2 Restricted cash - 1.5 Bonds 3 - 0.3 Total 2 8.0 1 Conditionally sold 2 Due June
Slide 30: Tax Asset Position – June 2015
TAX ASSET POSITION – 30 JUNE 2015 For personal use only Realised (current) Unrealised Total tax assets ($m) 1 (deferred) ($m) 2 ($m) Revenue 18.0 1.2 19.2 Capital 15.0 58.9 73.9 Total 33.0 60.1 93.1 1 Realised (or current) tax losses are losses or deductions claimed within historic tax returns, and
Slide 31: Disclaimer
Disclaimer This presentation has been prepared by Aspen Group (“Aspen”) and should not be considered in any For personal use only way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anyth