Charter Hall Group · ASX:CHC
Charter Hall — H1 2010 Earnings Presentation
48 slides from Charter Hall's earnings presentation, Feb 24, 2010
Slide 1: Charter Hall Group 1H FY10 Results
For personal use only Charter Hall Group 1H FY10 Results 24 February 2010
Slide 2: Agenda
Agenda For personal use only 1H FY10 Summary Earnings Overview Charter Hall Property Trust Charter Hall Managed Funds Development Financials Capital Management Outlook Questions Appendices Charter Hall Group 1H FY10 Results Presentation 2
Slide 3: Section one: 1H FY10 Summary
For personal use only Section one 1H FY10 Summary 333 George Street, Sydney NSW
Slide 4: 1H FY10 Summary
1H FY10 Summary For personal use only Underlying Earnings of $14.2 million and Underlying EPS of 2.02cps for 1H FY10 – Generated underlying earnings through bottom of the cycle – Down from $20.9 million and 4.80cps for 1H FY09 (pcp) Asset cap rates softened by approximately 33bps – Combination o
Slide 5: 1H FY10 Summary
1H FY10 Summary For personal use only 1H FY10 1H FY09 Underlying Earnings1 $14.2m $20.9m Underlying EPS2 2.02c 4.80c DPS 1.60c 3.96c NPAT (AIFRS) ($65.8m) ($16.6m) AT 31 DECEMBER 09 AT 30 JUNE 09 AUM $3.0bn $3.4bn Total Group Assets $587m $524m Total Group Net Assets3 $417m $494m NTA $0.60 UPDATE $0
Slide 6: Section two: Earnings Overview
For personal use only Section two Earnings Overview 130 Stirling Street, Perth WA
Slide 7: Group Revenue
Group Revenue For personal use only $31.9m $27.2m1 $17.0m $13.2m $14.9m $14.0m CHL CHPT 1H FY09 1H FY10 NOTE: 1. Revenue per the accounts is recorded at $31.3 million. Revenue in this analysis includes CHL investment income, excludes interest income and is net of property expenses. Charter Hall Grou
Slide 8: Group Revenue
Group Revenue For personal use only Revenue composition 1H FY10 revenue breakdown ($27.2 million) $14.9m Development $14.0m investment fees Other corporate 1H FY09 Property 4% services 3% management 1H FY010 fees 3% Performance fees 6% Other property service fees 8% $7.8m Property income 51% $6.8m $
Slide 9: Group EPS and DPS
Group EPS and DPS For personal use only 4.80c 3.96c 2.02c 1.60c EPS DPS 1H FY09 1H FY10 Charter Hall Group 1H FY10 Results Presentation 9
Slide 10: Section three: Charter Hall Property Trust
For personal use only Section three Charter Hall Property Trust 225 St Georges Terrace, Perth WA
Slide 11: Charter Hall Property Trust (CHPT)
Charter Hall Property Trust (CHPT) For personal use only CHPT MARKET CAP VALUERS’ MINIMUM CO-INVESTMENT RATE DISCOUNT RENTAL RATE REVIEWS ($m) (%) (%) (%) Core Plus Office Fund (CPOF) 113 7.83% 9.42% 3.99% Core Plus Industrial Fund (CPIF) 56 8.44% 9.76% 3.26% Core Plus Retail Fund (CPRF) 104 8.26% 9
Slide 12: Charter Hall Property Trust (CHPT)
Charter Hall Property Trust (CHPT) For personal use only Reconciliation of fall in value CHPT property investment portfolio $111.9m Net sales $47.3m $47.3m Fall in value of $9.1m co-investment stakes $6.5m $64.6m $36.7m $6.4m $5.9m Net negative Net sales over CPOF CPIF CPRF DPF CHUF movement of pe
Slide 13: CHC Look-through Tenant Profile
CHC Look-through Tenant Profile For personal use only Lease expiry profile (years) Top 10 tenants (31 December 2009 PF) MOF 4.6 % PORTFOLIO TENANT LEASED Wesfarmers (Bunnings, Coles, Kmart, Target, Liquorland) 9% MCW 5.9 Australian Government (Federal & State) 6% MDPF 5.0 Woolworths 5% Telstra Corpo
Slide 14: CHC Look-through Assets
CHC Look-through Assets For personal use only Asset diversification PF (by value) Sector diversity PF Industrial 12% Retail MDPF DPF 33% $10m, 2% $22m, 4% MCW $80m, 14% CPOF $113m, 19% Office 55% CPIF MOF $56m, 10% $156m, 27% Geographic diversity PF US 19% CPRF CHUF $104m, 18% Europe $42m, 7% 5% Aus
Slide 15: Section four: Charter Hall Managed Funds
For personal use only Section four Charter Hall Managed Funds 400 Kent Street, Sydney NSW
Slide 16: Assets Under Management Post-Transaction
Assets Under Management Post-Transaction For personal use only Assets under management (AUM) of $10.2 billion across 18 funds – Diverse range of mandates and equity sources Charter Hall AUM $10.2bn Wholesale Investor Funds Retail Investor Funds Listed Funds $2.56bn $1.16bn $6.46bn Opportunistic Co
Slide 17: Assets Under Management
Assets Under Management For personal use only Reconciliation of AUM1 change over HY10 $7,204m $10,194m -$149m -$245m $3,384m $2,990m $2,990m FY09 Net sales Valuation falls 1H FY10 Including the Platform NOTE: 1. AUM reconciliation does not include Macquarie platform. Charter Hall Group 1H FY10 Res
Slide 18: Wholesale Investment Funds Update
Wholesale Investment Funds Update For personal use only Core Plus Office Fund (CPOF) – Asset sale campaign largely complete AUM $1,206 Change in AUM1 ($184m) – Development margin (profits) have significantly buffered declining valuations CHPT Stake 18% – Strong IRR outlook from trough in market cycl
Slide 19: Wholesale Opportunistic Funds Update
Wholesale Opportunistic Funds Update For personal use only Charter Hall Opportunity Fund No.4 (CHOF4) – Sale of 50% of Alluvion, Mounts Bay Road, Perth WA AUM $249m Fund equity – Sale of 50% of 275 George Street, Brisbane Qld commitments $165m – Focus on completing projects and leasing remaining vac
Slide 20: Retail Equity Funds Update
Retail Equity Funds Update For personal use only Diversified Property Fund (DPF) – Asset sales continue to deleverage DPF AUM $154m Change in AUM1 ($40m)2 – Continue to focus on driving strong rent growth CHPT Stake 32% – Maintained distributions and open to applications WALE 7.3 years Occupancy 99%
Slide 21: Section five: Development
For personal use only Section five Development 275 George Street, Brisbane QLD
Slide 22: Development
Development For personal use only Completed all developments in Core Plus funds ASSET FUND DETAILS 13,014m2 development with value of $25.4 million completed in July 2009. Home HQ Ipswich, Ipswich Qld CPRF Currently 100% leased/committed 11,600m2 development with value of $71.6 million completed i
Slide 23: Development
Development For personal use only The sales of Alluvion and 275 George Street underline CHC’s ability as a property specialist to deliver positive returns despite the extremely challenging conditions over the last two years 275 George Street (50%)1 Alluvion (50%) 110.0 189.5 95.0 26.5 11.5 36.3 16
Slide 24: Development Pipeline
Development Pipeline For personal use only Development construction roll-off Development construction/land banks (completed value) Bulky goods 23% Office Residential Bulky goods Residential 47% $335m $175m Office 28% Industrial 2% 2010 2011 2012 Charter Hall Group 1H FY10 Results Presentation 24
Slide 25: Commercial & Industrial Property (CIP)
Commercial & Industrial Property (CIP) For personal use only Industrial pre-lease development business in which CHC has a 50% interest CIP has maintained profitability despite tough market conditions Contributed $1.5 million to CHC’s profit in 1H FY10 Pre-lease activity has gathered pace wit
Slide 26: Section six: Financials
For personal use only Section six Financials 41-57 South Centre Road, Tullamarine Vic
Slide 27: Income Statement
Income Statement For personal use only $m 1H FY10 1H FY09 Direct net property income 7.9 1.1 Indirect property income 6.1 12.8 Other trust income - 1.0 Total CHPT income 14.0 14.9 1 Development investment income 1.0 (0.6) Funds management income – Base fees 6.8 7.8 Funds management income – Developm
Slide 28: Underlying Earnings Reconciliation
Underlying Earnings Reconciliation For personal use only 1H FY10 +$10.5m +$1.2m 2.02cps 1.6cps $14.2m +$15.3m $11.2m +$53.0m $65.8m AIFRS loss FV adjustments CPRF consolidation Loss on sale Other Underlying Earnings Distribution impairment NOTE: 1. Other includes $15.3 million of impairment in relat
Slide 29: Balance Sheet
Balance Sheet For personal use only 31 DEC 2009 31 DEC 2009 30 June 2009 (pro forma post platform acquisition) $m $m $m Assets Cash 28.4 23.1 1.9 Direct property (CPRF) 244.2 244.2 15.0 Indirect property investments 478.9 232.4 433.6 Other tangible assets 87.0 87.0 43.3 Intangible assets1 119.3 0.0
Slide 30: Section seven: Capital Management
For personal use only Section seven Capital Management WORKZONE, 202 Pier Street, Perth WA
Slide 31: Capital Management
Capital Management For personal use only KEY CAPITAL MANAGEMENT METRICS FOR CHC 31 December 2009 30 June 2009 Debt Facility $50m $100m Drawn Debt (excl CPRF debt) Nil $14.7m Cash-Balance $18.6m $2.0m ‘Look through’ gearing1 33.5% 42.8% Debt maturity 1.5 yrs 2 yrs Current interest rate (including mar
Slide 32: Capital Management
Capital Management For personal use only Managed fund debt facilities – Excludes Macquarie Platform funds DEBT FACILITY1 CHC CPOF CPRF CPIF DPF Asset values ($m)2 3375 1,206 243 358 180 Net debt drawn ($m) - 553 85 134 86 Duration (years)3 1.5 2.3 1.5 1.9 1.9 LOAN TO VALUE RATIO3 Current LVR3 0% 4
Slide 33: Capital Management
Capital Management For personal use only Debt expiry profile by fund based on drawn debt – No maturities until 2H FY11 297 $300m 279 $250m CPOF $200m CPRF $150m 130 CPIF $100m 88 DPF 52 $50m $0m 1HFY10 2HFY10 1HFY11 2HFY11 1HFY12 2HFY12 1HFY13 1HFY13 Charter Hall Group 1H FY10 Results Presentation
Slide 34: Section eight: Outlook
For personal use only Section eight Outlook Sydney City skyline
Slide 35: Outlook
Outlook For personal use only Outlook for CHC is positive – Strong signals that valuations in Australia have bottomed – Access to debt capital improving – Re-emergence of development pipeline Access to external equity slowly improving – SSF raising taking longer than expected, however expected t
Slide 36: Questions
For personal use only Questions
Slide 37: Appendices
For personal use only Appendices
Slide 38: Appendix A – Earnings Reconciliation
Appendix A – Earnings Reconciliation For personal use only 1H FY10 1H FY09 ($m) ($m) NPAT (AIFRS) excludes non-controlling interest (65.8) (16.6) Fair value adjustments 53.6 31.8 Derivative financial instruments (0.6) 10.2 CPRF consolidation impairment 15.3 Loss on sale of investments 10.5 (4.6) Oth
Slide 39: Appendix B – CHPT Investments
Appendix B – CHPT Investments For personal use only 31 DECEMBER 2009 30 JUNE 2009 CHPT stake CHPT investment CHPT stake CHPT investment (%) ($m) (%) ($m) Direct properties 0 0 CPOF 18% 113 23% 161 CPIF 25% 56 25% 62 CPRF 66% 104 66% 140 DPF 32% 22 26% 22 CHUF 25% 42 25% 48 MOF1 7.5% 156 - - MCW1 7.5
Slide 40: Appendix C – Capital Management
Appendix C – Capital Management ASSET For personal use only FACILITY VALUES DRAWN DEBT1 MATURITY CURRENT LVR HEADROOM ($m) ($m) LVR COVENANT2 %3 NOTES: CHC 1. Drawn debt shown net of cash. Portfolio facility 3377 50 Jul-11 0% 25% N/A Cash balance at fund level used to reduce various debt facilities.
Slide 41: Appendix D – Development Book
Appendix D – Development Book For personal use only PROJECTS CURRENTLY UNDER CONSTRUCTION FUND SECTOR COMPLETION VALUE COMPLETION DATE ($m) (CY) Aquilo, Mentone Vic CHOF4 Residential 101 2012 Home HQ North Shore, Artarmon, Sydney NSW CHOF4 Bulky goods 105 2010 Gepps Cross, Adelaide SA1 CHOF4 (50%) B
Slide 42: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS OFFICE FUND (CPOF) BOOK VALUE INDEPENDENT MKT CAP MKT CAP MCR CHANGE VALUER’S WALE MIN. RENT VALUATION DATE RATE RATE DISCOUNT REVIEW 31 DEC 09 30 JUNE 09 (%) RATE/ IRR ($m) (%) (%) (%) (YEARS) (%) 331 & 333 George Street, Sydney NSW 73
Slide 43: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS INDUSTRIAL FUND (CPIF) BOOK INDEPENDENT MKT CAP MKT CAP MCR VALUER’S WALE MIN. RENT VALUE VALUATION RATE RATE CHANGE DISCOUNT REVIEW DATE 31 DEC 09 30 JUNE 09 RATE/ IRR ($m) (%) (%) (%) (%) (YEARS) (%) Chatswood Business Park, NSW 28.8
Slide 44: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only CORE PLUS RETAIL FUND (CPRF) BOOK INDEPENDENT MKT CAP MKT CAP MCR VALUER’S WALE MIN. RENT VALUE VALUATION RATE RATE CHANGE DISCOUNT REVIEW DATE 31 DEC 09 30 JUNE 09 RATE/ IRR ($m) (%) (%) (%) (%) (YEARS) (%) Bunnings, Stafford Qld 20.0 31-Dec-08
Slide 45: Appendix E – Property Portfolio
Appendix E – Property Portfolio For personal use only DIVERSIFIED PROPERTY FUND (DPF) BOOK INDEPENDENT MKT CAP MKT CAP MCR VALUER’S WALE MIN. RENT VALUE VALUATION RATE RATE CHANGE DISCOUNT REVIEW DATE 31 DEC 09 30 JUNE 09 RATE/ IRR (%) ($m) (%) (%) (%) (%) (YEARS) 46-50 Kings Park Road, West Perth W
Slide 46: Further information
For personal use only Further information David Harrison Joint Managing Director +61 2 8904 4033 davidh@charterhall.com.au David Southon, Joint Managing Director +61 2 8908 4025 davids@charterhall.com.au Jelte Bakker Chief Financial Officer +61 2 8908 4035 jelteb@charterhall.com.au
Slide 47: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Charter Hall Group (Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the Responsible Entity for Charter Hall Property Trust (ARSN 113 339 147)). It is a pr
Slide 48: charterhall.com.au
For personal use only charterhall.com.au