BWP Trust · ASX:BWP
BWP Trust — H1 FY2003 Earnings Presentation
21 slides from BWP Trust's earnings presentation, February 2003
Slide 1: Interim Results 6 months to 31 Dec 02
Interim Results 6 months to 31 Dec 02 Investor Presentations - February 2003 www.bunningspropertytrust.com.au
Slide 2: Presentation format
Presentation format ¾ Presenters – Andrew Hopkins, Manager – Gene Tilbrook, Director ¾ Outline – Structure – Key events/results – The tenant – Portfolio – Acquisition/Development process – Capital management – Financial performance – Outlook February 2003 2 2
Slide 3: Structure
Structure ¾ Manager: Bunnings Property Management (BPML) – subsidiary of WES – independent board ¾ Bill Cairns (Chairman); GPT, FAL, AVR ¾ Robert McCuaig; Chairman/founder of Colliers ¾ Peter Mansell; Freehills, WAN, HPL ¾ Gene Tilbrook; WES, Gresham, ARG – independent property valuations ¾ Tenant:
Slide 4: Events - highlights
Events - highlights ¾ Acquisitions – 3 development sites – 2 warehouse developments – 1 completed warehouse (ex unrelated party) ¾ Successful $33.7m placement ¾ Unitholder approval of $53.2m acquisition from BBC ¾ Revaluation of 2 properties up 11% on purchase price ¾ NAB bank bill lines raised from
Slide 5: Results - highlights
Results - highlights ¾ Interim distribution 5.15 cpu 7.3% on pcp ¾ Property assets $382.7m 15.1% on pcp ¾ NTA $1.12 per unit 2.8% on pcp ¾ Gearing 20.7% 7.6% on pcp ¾ MER 0.73% 8.8% on pcp ¾ Market capitalisation $347m 21.3% on pcp Note: all as at 31 Dec 2002 February 2003 5 5
Slide 6: Results – actual exceeded estimate
Results – actual exceeded estimate Estimate Actual Income $000 16,014 16,201 187 Expenses Management fee $000 1,066 1,068 2 Borrowing costs $000 2,844 2,728 (116) Other $000 279 299 20 Total $000 4,189 4,095 (94) Operating profit $000 11,825 12,106 281 Units eligible m 235 235 - DPU cpu 5.03 5.15 0.
Slide 7: The tenant – blue chip performance
The tenant – blue chip performance 3500 Sales from Warehouses >75% of total 350 3000 300 SMI acquisition 2500 250 Sales ($m) EBIT ($m) 2000 200 BWP established 1500 150 1000 100 500 50 0 0 1995 1996 1997 1998 1999 2000 2001 2002 Sales EBIT (pre Goodwill) February 2003 7 7
Slide 8: The tenant – average year lease expiry
The tenant – average 12 year lease expiry 24 20 Number of leases 16 12 8 4 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Term to lease expiry (years) ¾ Typical lease features – 5 + 5 + 5 (plus 2 x 5 year options) – automatic annual CPI escalation – 5 year market reviews – some ratchet clauses – WES covenant
Slide 9: Acquisition/development process - greenfields
Acquisition/development process - greenfields ¾ Tenant identifies site (8 to 12 pa) – Visible & accessible/usually industrial land – typically 3 hectares/significant catchment area – option to purchase ¾ Offer made to BPML – full development proposal – BPML investment criteria applied – not all prop
Slide 10: Acquisition/development process - other
Acquisition/development process - other ¾ Acquisition of developed properties – ex Bunnings Properties Pty Ltd ¾ IPO properties, others – ex BBC Hardware Ltd (18 acquired by WES via SMI) ¾ recent settlement of 4 properties – ex other vendors (approx. 50 owned by third parties) ¾ eg. Fyshwick Februar
Slide 11: Portfolio – recent acquisitions
Portfolio – recent acquisitions Site Retail area Purchase Passing (ha) (m2) ($m) Yield (%) 6 months to 31 Dec 02 Dandenong (Vic) 2.71 12,390 6.74 9.0 Hervey Bay (Qld) 3.62 11,070 8.5 9.1 Rocklea (Qld) 3.2 tba 6.2 tba Pt. Macquarie (NSW) 2.0 9,0633 2.15 9.13 Fyshwick (ACT) 1.8 6,400 10.0 9.0 Post 31
Slide 12: Portfolio – 46 properties; geographic spread improving
Portfolio – 46 properties; geographic spread improving 9 9 2 8 18 BWP properties * Note: includes 5 properties acquired post 31 Dec 02 February 2003 12 12
Slide 13: Portfolio – steady growth
Portfolio – steady growth 500 400 300 $m 200 100 0 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Feb-03 At cost Revaluations February 2003 13 13
Slide 14: Portfolio – properties revalued every 3 years
Portfolio – properties revalued every 3 years Revaluations to Date No. Average BV properties reval. increment 2000/01 10 +13.7% +8.8% 2001/02 14 +16.1% +9.9% 2002/03 2 +11.3% +6.6% Total 26 +14.8% +9.3% ¾ Revaluation reserve now $20m ¾ Positive for NTA & impending market rent reviews February 2003 1
Slide 15: Portfolio - rent reviews imminent
Portfolio - rent reviews imminent ¾ Task – 20 properties in 2003/04; 18 prior to 31 Dec 03 ¾ 11 in Vic, 4 in Qld, 3 in WA, 2 in NSW/ACT – basis ¾ rent paid by lessee at other premises in same State ¾ rent paid by others in comparable premises in same State ¾ Process – lessor to give 2 months notice
Slide 16: Capital management - overview
Capital management - overview ¾ $131m equity raisings post IPO – $33.7m placement (Nov 02) – $29.5m one for eight rights issue (Oct 01) – $23.9m placement (Sep 01) – $44.0m one for three rights issue (Jan 00) ¾ Borrowings – preferred gearing range 20% to 40% (debt to total assets) – cost 6.1% (exc.
Slide 17: Capital management – gearing on target
Capital management – gearing on target 50% 40% 30% Preferred range 20% 10% 0% Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Feb-03 February 2003 17 17
Slide 18: Capital management – debt actively managed
Capital management – debt actively managed BWP Hedge Book Overview Jun 99 Jun 00 Jun 01 Jun 02 Dec 02 % actual debt 87% 86% 77% 90% 100% hedged Swap rates - maximum 5.87% 6.62% 6.64% 6.64% 6.62% - minimum 5.56% 5.56% 5.46% 5.46% 5.41% 31 Dec 02: 6.13% weighted average (exc. margins/fees) February 20
Slide 19: Financial performance – consistent DPU growth
Financial performance – consistent DPU growth 6.00 End of concessional management fee 5.15 5.23 4.97 5.00 4.68 4.80 4.50 4.00 CPU 3.00 2.00 1.00 0.00 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Nov 02 Forecast February 2003 19 19
Slide 20: Financial performance – solid total returns
Financial performance – solid total returns Total Returns1 1yr 2yr 3yr 4yr BWP 14.4% 23.4% 18.8% 11.0% Property Trusts 11.4% 13.1% 15.2% 10.3% Equities2 -8.1% 0.6% 1.6% 5.0% 1Calendar years ending 31 Dec Source: Bloomberg 2All Ords Acc. Index February 2003 20 20
Slide 21: Outlook
Outlook ¾ Acquisition opportunities - ex BBS rollout (8 to 12 pa) - ex BBC properties - ex third party owners ¾ Revaluations – another 4 properties prior to 30 Jun 03 ¾ Rent reviews – on 20 properties in 2003/04 2002/03 2003/04 2004/05 2005/06 2006/07 Revaluations 61 4 27 15 4 Rent reviews - 20 7 1