Eureka Group Holdings Limited · ASX:EGH
Eureka — Investor Presentation (March 2024)
36 slides from Eureka's investor presentation, Mar 1, 2024
Slide 1: 1H24 Results Presentation
1H24 Results Presentation February 2024
Slide 2: Contents
Contents Portfolio Capital 1H24 Highlights About Eureka Review Management Strategic Growth APZ Offer Outlook Appendix Initiatives
Slide 3: 1H24 Highlights
1H24 Highlights
Slide 4: Key achievements
Key achievements Continued strong underlying financial performance Strong results ✓ Portfolio value uplift ✓ Acquisitions and developments ✓ Capital management ✓ Resident first approach ✓ Strengthened management team ✓ 1. Refer to page 31 for adjustments to derive underlying EBITDA and page 34 for D
Slide 5: 1H24 Highlights
1H24 Highlights Revenue and earnings growth driven by strong resident demand, rental growth and property valuations $4.3m $5.6m $20.3m $7.1m Underlying profit Revenue Underlying EBITDA1 Valuation uplift before tax1 16% 1H23 19% 1H23 $7.5m 1H23 $3.7m 1H23 Growth in underlying results > 90% of the por
Slide 6: Portfolio Summary
Portfolio Summary Eureka operates a pure play, specialist strategy of providing affordable seniors rental accommodation NATIONAL FOOTPRINT PORTFOLIO SNAPSHOT 52 Villages 2,882 $316m Units under management Assets under management1 QLD 13% FY23 26% FY23 $153m 98% $262m Occupancy Investment property1,2
Slide 7: Village portfolio analysis
Village portfolio analysis Unit numbers Village Contribution1 Asset values at at 31 December 2023 (excluding revaluations) ($m) 31 December 2023 ($m) 1H24 1H23 321 47 254 9.6 7.8 33 1,630 6 677 230 1.3 1.2 0.7 0.6 0.1 Owned units Managed units Owned units Management rights Joint venture units Manage
Slide 8: Underlying EBITDA
Underlying EBITDA1 Continued Underlying EBITDA growth, with margins expected to improve 40% 38.3% $14m 35.3% 34.6% 34.8% 35.1% 35% 33.7% $12m 30.8% 30% $10m 26.2% 25% Underlying EBITDA 1 $8m 20% $6m 15% $4m 10% $2m 5% $m 0% FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 1H 2H Underlying EBITDA margin 1. Re
Slide 9: Strong ESG focus
Strong ESG focus Resident first philosophy enhances resident experience, creating sustainable value for stakeholders Initiatives Achievements Targets / Focus Solar power • Commenced installation of embedded electricity • Increase village and resident waste recycling Commitment to energy conservation
Slide 10: About Eureka
About Eureka 10
Slide 11: Scalable affordable build-to-rent seniors living portfolio
Scalable affordable build-to-rent seniors living portfolio Eureka is the only ASX-listed pure play specialist in seniors rental accommodation What Eureka offers ✓ ✓ ✓ ✓ ✓ ✓ 1. Refer page 17. Includes share of assets held in joint venture and WA fund and management rights assets 11
Slide 12: Eureka's build-to-rent portfolio is well positioned
Eureka’s build-to-rent portfolio is well positioned A leading provider of affordable accommodation for independent seniors living Seniors rental Residential home Government social housing Land lease communities Retirement village Aged care ‘Eureka’ Community-based independent Care services available
Slide 13: Cash flows backed by the Australian Government pension
Cash flows backed by the Australian Government pension Government backed age pension and rent assistance payments support Eureka’s revenue streams Commentary Payments backed by Government Age pension payments Rent assistance payments Rental payments Accommodation and catering services 1. Services Au
Slide 14: A growing ageing population with limited superannuation
A growing ageing population with limited superannuation Limited independent community living options for seniors on the age pension Australians aged 65+ years old1,2,3 Seniors superannuation balances are low # Millions Superannuation balances ($k)4,5 People with no superannuation (%)6 5.6 5.4 5.2 $6
Slide 15: Future demand supported by favourable industry trends
Future demand supported by favourable industry trends A growing reliance on the Government age pension increases demand for low-cost, quality rental accommodation Average property prices in capital cities1 Median weekly rent2 Rebased to 100 $ per week 220 QLD NSW VIC SA Median 210 $750 200 $700 190
Slide 16: Portfolio Review
Portfolio Review 16
Slide 17: Diversified Portfolio
Diversified Portfolio • Eureka’s core portfolio comprises 1,630 owned units and Portfolio statistics 1H24 FY23 Change 254 units held in a 50% Joint Venture Owned units [#] 1,630 1,576 54 • Eureka has a 33% interest in, and manages, 321 units in the JV units [#] 254 254 - WA fund with a total investm
Slide 18: Eureka Villages WA Fund
Eureka Villages WA Fund Completed the acquisition of 6 well established villages for $44m1 Portfolio Overview of fund • The six villages were acquired by a new wholesale property fund, Eureka Villages WA Fund (the Fund) in 72 units 51 units December 2023 99% occupancy 98% occupancy • The Fund is man
Slide 19: Brassall, Qld Development
Brassall, Qld Development Building long term value Site development locations • Village was acquired in 2021, comprising 43 rental residences, 12 land lease As-if complete valuation (31 December 2023) $21.5m residences and surplus development land Total new residences 51 • Development of 51 new dwel
Slide 20: Capital Management
Capital Management 20
Slide 21: Capital management
Capital management Optionality for future funding requirements Key metrics 1H24 FY23 • Bank facility in place until 2026, with no principal repayments Cash [$m] 3.2 1.8 required until expiry Debt [$m] 92.0 69.7 • Gearing within target range of 30% to 40% Total assets [$m] 267.2 237.4 Proportion of d
Slide 22: Dividends
Dividends Consistent returns to shareholders since commencement of paying dividends Dividends Key dates Dividend track record (cps) 1H24 Interim dividend Ex-dividend date 4 April 2024 0.7c per share 0.63 0.63 0.67 0.67 0.70 Record date 0.59 0.59 • Dividend reinvestment 0.55 0.55 plan (DRP) operative
Slide 23: Strategic Growth Initiatives
Strategic Growth Initiatives 23
Slide 24: Strategic growth initiatives
Strategic growth initiatives Building long term value via a disciplined growth plan, backed by a resident first philosophy • Relative trading Sector consolidation / acquisition Development opportunities Alternative capital sources Organic growth pipeline • Fragmented sector provides • Development po
Slide 25: Aspen Group Limited (APZ) Offer
Aspen Group Limited (APZ) Offer 25
Slide 26: APZ offer
APZ offer On 23 January 2024, APZ announced that it intended to make an off-market takeover offer to acquire Eureka • Relative trading • All-scrip proposal; with each EGH shareholder to receive 0.26 securities in APZ for each EGH share, representing an implied price of $0.429 per EGH share (based on
Slide 27: APZ's proposal undervalues EGH
APZ’s proposal undervalues EGH Implied APZ offer APZ’s proposal represents either a discount or no meaningful EGH price [$] • Relative trading premium over Eureka’s share price at any time in the past 12 months Undisturbed (22 Jan-24) 0.450 discount 1 [%] (2.1%) Last close 0.460 (4.2%) 1-month VWAP
Slide 28: Outlook
Outlook 28
Slide 29: Outlook
Outlook FY24 Expectations 1. Refer Definitions on page 34 29
Slide 30: Appendix
Appendix 30
Slide 31: Profit and loss
Profit and loss ($ '000) 31-Dec-23 31-Dec-22 Change Rental income 14,286 11,765 • Underlying EPS of 1.44 cps Catering income 2,991 2,699 Service and caretaking income 2,995 2,991 • 16% increase in total revenue driven by like-for-like Total revenue 20,272 17,455 16% village growth (7%) and acquisiti
Slide 32: Balance sheet
Balance sheet ($ '000) 31-Dec-23 30-Jun-23 • Net tangible assets per share grew by 3% to 46.3 Assets cents Cash and cash equivalents 3,230 1,815 • Investment property values increased by $17m due Trader and other receivables 1,355 499 to valuation uplift, acquisitions, development and Equity account
Slide 33: Cash flow statement
Cash flow statement ($ '000) 31-Dec-23 31-Dec-22 • Reliable operating cash flows Cash flows from operating activities Receipts from customers 19,597 17,659 • Net cash from operating activities was $3.8m Payments to suppliers and employees (14,035) (13,047) (+1% on pcp) Distributions from equity acco
Slide 34: Definitions
Definitions Balance sheet gearing Underlying EBITDA Calculated as net debt (being interest-bearing drawn debt net of cash) divided An unaudited non-IFRS measure that represents the operating performance by net debt plus equity of the Group and excludes valuation adjustments, asset disposals and cert
Slide 35: Disclaimer
Disclaimer No responsibility for contents of presentation No offer to sell or invitation to buy To the maximum extent permitted by law, Eureka Group Holdings Limited This Presentation does not, and should not be considered to, constitute or form (ABN 15 097 241 159), its officers, advisers and repre
Slide 36: Contact details
Contact details Eureka Group Holdings Limited ABN 15 097 241 159 REGISTERED ADDRESS Suite 2D, 7 Short Street Southport QLD 4215 BRISBANE OFFICE Level 5, 120 Edward Street Brisbane QLD 4000 POSTAL PO Box 10819 Southport BC QLD 4215 07 5568 0205 info@eurekagroupholdings.com.au eurekagroupholdings.com.
Eureka Group Holdings — Investor Presentation (March 2024) on 6ix