Investore Property Ltd. · NZX:IPL
Investore Property — FY2019 Earnings Presentation
29 slides from Investore Property's earnings presentation, May 21, 2019
Slide 1: Annual Results Presentation
Annual Results Presentation For the year ended 31 March 2019 21 May 2019
Slide 2: Agenda and Contents
Agenda and Contents Page Speaker Welcome Philip Littlewood Highlights 2 Chief Executive Officer of the Manager, SIML* Strategic Principles 5 Financial Performance 6 Jennifer Whooley Chief Financial Officer of the Manager, SIML Proactive Capital Management 10 Fabio Pagano Portfolio Overview 13 Invest
Slide 3: Highlights
Highlights Countdown & specialty tenants Cnr Fernlea Avenue & Roberts Line Kelvin Grove, Palmerston North Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 2 1
Slide 4: Highlights
Highlights FY18 figures in brackets Financial Performance Net rental income of $47.4m ($44.2m), up $3.3m $47.4m • • Corporate expenses of $6.0m ($5.4m), up $0.6m, largely Net rental income due to a performance fee of $0.5m payable to SIML for up $3.3m the quarter ended 31 March 2019 Profit before ot
Slide 5: Highlights (continued)
Highlights (continued) As at 31 March 2018 figures in brackets Portfolio • WALT2 12.4 years (13.1 years), with two significant lease renewals • Total property portfolio3 net valuation gain of $17.2m or 2.3% • Portfolio market capitalisation rate strengthened to 6.05% (6.19%) WALT 2 12.4 years • Occu
Slide 6: Strategic Principles
Strategic Principles Investore’s strategy is to invest in quality, large format retail 1. Active Portfolio Management 2. Targeted Growth properties throughout New Zealand, and actively manage Considered acquisitions and Focus on owning properties with long shareholders’ capital, to lease terms and h
Slide 7: Financial Performance
Financial Performance Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 6
Slide 8: Financial Performance
Financial Performance Change 2019 2018 Actual Actual $m $m $m % Net rental income 47.4 44.2 +3.3 +7.4 Corporate expenses (6.0) (5.4) (0.6) (10.9) Profit before net finance expense, other income/(expense) and income tax 41.4 38.7 +2.7 +6.9 Net finance expense (14.4) (11.9) (2.5) (20.7) Profit before
Slide 9: Distributable Profit
Distributable Profit 5 Change 2019 2018 Actual Actual $m $m $m % Profit before income tax 44.1 52.9 (8.7) (16.5) Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (17.2) (23.1) +5.9 +25.6 - Gain on disposal of investment properties 0.0 (2.9) +2.9 +100.0 - Ne
Slide 10: Financial Summary
Financial Summary As at As at 31 Mar 2019 31 Mar 2018 Actual Actual Change Investment Property value ($m) 761.26 738.3 +22.8 Drawn debt ($m) 318.5 307.4 +11.1 Loan to value ratio 41.8% 41.6% +0.2% Equity ($m) 443.2 429.1 +14.2 Shares on issue (millions) 260.1 261.8 (1.7) Net Tangible Assets (NTA) pe
Slide 11: Proactive Capital Management
Proactive Capital Management Countdown 326 Great South Road Greenlane, Auckland Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 10
Slide 12: Proactive Capital Management
Proactive Capital Management As at As at 31 Mar 31 Mar Key transactions Debt facilities 2019 2018 • Inaugural listed bond issue 18 April 2018 - $100m of six year fixed rate Banking facility limit bonds, resulting in increased weighted average tenor of debt facilities (ANZ, BNZ, CBA, Westpac), $370m
Slide 13: Proactive Capital Management (continued)
Proactive Capital Management (continued) As at As at 31 Mar 31 Mar Cost of debt 2019 2018 Key transactions – hedging Weighted average cost of debt • $25m six year fixed-to-floating interest rate swap entered into, (incl. current interest rate 4.38% 4.25% commenced 18 April 2018 derivatives, bond and
Slide 14: Portfolio Overview
Portfolio Overview PAK‘nSAVE 53 Leach Street New Plymouth Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 13
Slide 15: Portfolio Overview
Portfolio Overview Total property portfolio Key transactions As at As at • Mitre 10 Mega, Botany, Auckland, development completed 31 Mar 31 Mar increasing property value to $34.1m, up 11% from 31 March 2018, 201910 2018 and generating additional $0.3m p.a. net rental Number of properties 40 40 • Com
Slide 16: Sustainability
Sustainability Investore aligns its sustainability objectives with that of SIML, its Manager, for whom sustainability has been a key focus for FY19 Through its refurbishment programme and other development works, Investore has taken the opportunity to: • Install new energy efficient heating, ventila
Slide 17: Countdown Lower Hutt, Wellington
Countdown Lower Hutt, Wellington Investore partners with its Countdown Lower Hutt tenants on a variety of projects. 261 High Street, Wellington This successful formula of Tenant Countdown working alongside our tenants Occupancy 100% has been a particular feature of Investore’s approach and NLA 5,078
Slide 18: Capital Expenditure
Capital Expenditure Over the past year, Investore has undertaken a Capital expenditure by type for the year to 31 March 2019 number of capital projects to upgrade and improve assets, supporting tenant works $4.1m incurred in FY19 on capital projects, or 0.5% of the portfolio value, including: Other
Slide 19: Lease Expiry Profile
Lease Expiry Profile 83% of portfolio Contract Rental15 has an expiry of Lease Expiry Profile14 by Contract Rental15 greater than 10 years from 31 March 2019 as at 31 March 2019 WALT 12.4 years FY20 • 1.1% of Contract Rental expiring • Major expiry - Animates at 226 Great South Road, Auckland, equat
Slide 20: Portfolio Occupancy
Portfolio Occupancy As at 31 March 2019 Occupancy16 Vacancy Total area (%) (sqm) (sqm) Property 3 - 7 Mill Lane, Warkworth 98.0 76 3,815 Cnr Hanson Street, John Street & Adelaide Road, Wellington 98.7 64 4,881 Other properties 100.0 0 201,284 Total 99.9 140 209,980 Post balance date Investore has se
Slide 21: Portfolio Diversification
Portfolio Diversification Tenant diversification by gross Contract Rental17 3% 4% As at 31 March 2019 5% 5% General Distributors (Countdown) 73% 10% Bunnings 10% Foodstuffs 5% Specialty 5% Mitre 10 4% 73% The Warehouse 3% Geographic diversification by net Contract Rental17 As at 31 March 2019 Auckla
Slide 22: Countdown Takanini, Auckland
Countdown Takanini, Auckland Investore’s retail properties provide consumers with access Countdown Takanini to a diverse range of tenants that 226 Great South Road, Auckland are anchored by strong national retailers with long leases Tenancies 12 Anchor tenant Countdown Investore’s Countdown Takanini
Slide 23: Year Ahead and Conclusion
Year Ahead and Conclusion Bunnings 446 Te Rapa Road Hamilton Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 22
Slide 24: Investore's focus for the year ahead
Investore’s focus for the year ahead Outlook 1. Disciplined and considered investments to target growth opportunities • Target properties and tenants that focus on non-discretionary and convenience 2. Continued proactive capital management • retail Consider further capital management initiatives whi
Slide 25: Conclusion
Conclusion Capital initiatives reduce risk and enhance returns Proactive debt • Proactive bank refinancing to manage refinancing risk refinancing $170m • Inaugural listed bond issue improved debt maturity profile and diversified funding sources • Share buyback programme was an efficient use of balan
Slide 26: Appendices
Appendices Mitre 10 Mega Cnr Te Irirangi Drive & Bishop Dunn Place Botany, Auckland Investore Property Limited | Annual Results Presentation for the year ended 31 March 2019 25
Slide 27: Appendix 1
Appendix 1 Profit before other income/(expense) and income tax $4.4m $0.3m $0.4m ($1.8m) $0.3m $27.0m $26.8m ($2.5m) ($0.5m) ($0.4m) 31-Mar-18 Net rental Net rental Net rental NZ IFRS Higher net Performance fee Higher Lower 31-Mar-19 increase from reduction from increase from adjustments finance exp
Slide 28: Appendix 2
Appendix 2 NTA per share $0.17 ($0.02) ($0.01) $1.70 ($0.08) $1.64 31-Mar-18 Profit before tax Income tax expense Movement in cash flow Dividends paid 31-Mar-19 hedges, net of tax Investment properties $4.2m $0.2m $1.3m $761.2m $17.2m $738.3m 31-Mar-18 Net change in fair value Capital expenditure Tr
Slide 29: Thank you
Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Investore for the year ended 31 March 2019. Please refer t