Dexus Convenience Retail Reit · ASX:DXC

Dexus Convenience Retail Reit — APN Property Group — FY2019 Earnings Presentation

27 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 22, 2019

  1. Slide 1: FY2019 Results Presentation

    FY2019 RESULTS PRESENTATION 22 AUGUST 2019 www.apngroup.com.au ASX Code: APD

  2. Slide 2: FY2019 financial highlights

    FY2019 financial highlights Sixth successive year of recurring income growth $9.2 million ▲12% pcp, 2.94 cents per share (cps) OPERATING EARNINGS1 Statutory NPAT: $14.5 million ▲7% pcp 99% income from recurring sources FUM $2.9 billion ▲5%, $127 million 2.75 cps ▲22% DIVIDENDS Interim: 1.25 cps Fina

  3. Slide 3: FY2019 operational highlights

    FY2019 operational highlights Strong ‘property for income’ focused returns achieved across the group Continue to generate strong income performance – true to ‘property for income’ label REAL ESTATE ✓ APN AREIT Fund marked 10 year anniversary, 14.0% pa since inception SECURITIES ✓ APN Asian REIT FUM

  4. Slide 4: Sustained business, profit and dividend growth

    Sustained business, profit and dividend growth Recurring Income Growth Total Shareholder Return $4,000 $3,232 ​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​​ ​ ​ ​ ​ ​ ​ ​ ​ ​​ ​ ​ ​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $3,000 ​ ​ ​ ​ ​ ​ ​ ​ ​​ ​ ​ ​​ ​ ​ ​ ​ ​​ ​

  5. Slide 5: Strong operating earnings growth

    Strong operating earnings growth Income Statement ($000s) FY2019 FY2018 Change Reflects additional assets acquired by APN Industria Funds management fees 15,038 14,195 ▲ 6% REIT and full year contribution from assets acquired by Performance & transaction fees 374 670 ▼ 44% APN Convenience Retail REI

  6. Slide 6: Well capitalised for future growth

    Well capitalised for future growth Balance Sheet ($000s) June 2019 June 2018 Change Comprises: Cash1 15,672 14,986 ▲ 5% ▪ $83.0 million in ADI at $2.89 per security (NTA at $2.71, weighted average cap rate of 6.5%) Co-investments 127,472 102,201 ▲ 25% ▪ $30.0 million in AQR at $3.12 per security (NT

  7. Slide 7: Real Estate Securities

    Real Estate Securities ‘Property for income’ continues to be attractive in a low interest rate environment ▪ Continued strong income focused returns as a result of our active Division FUM growth management approach $1,668m $1,684m $1,571m $1,534m ▪ Benchmark unaware, lower risk, income focus: AREIT

  8. Slide 8: APN Asian REIT Fund

    APN Asian REIT Fund Gaining momentum and increasing scale supported by strong fundamentals ▪ Asian REIT Fund $45 million of FUM at 30 June 2019, up 88% ▪ Delivers APN’s Property for Income investment process into growing Asian commercial property markets – Singapore, Hong Kong, Tokyo ▪ Substantial,

  9. Slide 9: APN Industria REIT

    APN Industria REIT Strong and active year across portfolio, focused on providing long term sustainable income ▪ Earnings (FFO) increased 3.8% to 19.2 cps ▪ Active client engagement generating leasing outcomes – completing 53 leasing transactions across 13,700 sqm, 87% tenant retention ▪ Acquired $65

  10. Slide 10: APN Convenience Retail REIT

    APN Convenience Retail REIT Long lease term, non-discretionary retail focus delivering reliably and growth income ▪ Earnings (FFO) of 21.5 cps exceeded FY2018 annualised by 6.4% ▪ NTA increased by 9 cps to $2.96, up 3.1% ▪ Acquired Puma Mount Larcom for $7.3 million (15 year lease, 6.75% cap rate) ▪

  11. Slide 11: Direct Property

    Direct Property ▪ Successfully completed the APN Steller Development Fund – all six Fund FUM ($ million) projects settled. Fund remains on track to deliver investors approximately 17% IRR APN Regional Property Fund $54 ▪ Established the $24.2 million APN Nowra Property Fund, offering APN Coburg Nort

  12. Slide 12: Direct property platform with scale and multiple capabilities

    Direct property platform with scale and multiple capabilities $1.2 billion property, weighted average cap rate 6.7%, WALE 7.9 years and 98% occupancy QLD $398m 53 Convenience Retail $238m 13 Office $160m $408m $383m NSW $544m 4 Office $248m Office Industrial 1 Industrial $197m 8 Convenience Retail $

  13. Slide 13: Direct Property – active but disciplined approach

    Direct Property – active but disciplined approach 153 Sale prices properties reviewed $2.0 billion $1.2 billion 9% and conducted value of property value of offers above internal preliminary due opportunities assessed submitted valuation assumptions diligence $151 million transactions completed1 1. I

  14. Slide 14: Stapling proposal – update

    Stapling proposal – update ▪ A stapled structure is essentially a trust contractually linked with Listed Stapled Security APN Property Group (ASX: APD) a company – with each unit in the trust stapled to a share in the Background company and traded on the ASX as a single stapled security ▪ Board has

  15. Slide 15: Implied Funds Management platform valuation

    Implied Funds Management platform valuation1 Market implied value of funds 60.0 management platform of $30.8m based on $2.9bn FUM = 1.05% Total co-investments of 50.0 $127.5m 9.8 40.0 A$ cents per share (3.5) 5.0 4.6 30.0 9.6 50.0 20.0 24.5 10.0 0.0 2 ADI AQR Other co-investments Other NTA Cash Impl

  16. Slide 16: Outlook – APN remains well positioned for future growth

    Outlook – APN remains well positioned for future growth Quality income streams from commercial real estate continue to be relevant and attractive to investors ▪ Established $2.9 billion commercial real estate investment management platform ▪ Solid earnings base with four divisions across listed and

  17. Slide 17: Guidance – dividend sustainability

    Guidance – dividend sustainability Subject to continuation of current market conditions, business as usual basis (before potential stapling transaction impact) FY2019 FY2020F Guidance Results Guidance 2.25 cps 2.75 cps 2.75 cps (fully franked) (70% franked)1 (partially franked) ▪ The Board has issue

  18. Slide 18: Appendices

    APPENDICES APN | Property Group

  19. Slide 19: APN Property Group Profile

    APN Property Group Profile Specialist real estate investment manager – ‘Property for income’ focus As at 30 June 2019 APN PROPERTY GROUP LIMITED FUNDS UNDER MANAGEMENT CO-INVESTMENTS & CASH $2,929 MILLION $126 MILLION NET TANGIBLE ASSETS APN CONVENIENCE REAL ESTATE APN INDUSTRIA REIT RETAIL REIT DIR

  20. Slide 20: Overview: share price, volume and major shareholders

    Overview Summary Share Price and Volume ▪ Listed on ASX (Code: APD) Volume (RHS) Price (LHS) $0.55 20.0k ▪ Melbourne-based specialist real estate investment manager Volume (daily shares traded) $0.50 ▪ Established 1996, listed 2005 15.0k $0.45 Share price ▪ $2.9 billion in Funds under Management (FU

  21. Slide 21: Funds Under Management Summary

    Funds Under Management Summary Fee Basis APN Co-investment FUM Funds Sector Investors $m Manage- Perfor- Other $m % ment mance APN AREIT Fund Property Securities Retail & Institutional 1,266 ✓ − − APN AREIT Mandates Property Securities Institutional 200 ✓ − − APN AREIT PIE Fund Property Securities R

  22. Slide 22: Profit to operating cash flow reconciliation

    Profit to operating cash flow reconciliation $’000s 16,000 14,533 (8,324) 14,000 Cashflow Reconciliation ($’000s) June 2019 June 2018 12,000 4,064 11,117 Statutory profit after tax 14,533 13,565 10,000 Add/(deduct): 8,000 844 Mark to market revaluations (8,324) (7,996) 6,000 Non-cash expense items 8

  23. Slide 23: Operating Profit After Tax Reconciliation

    Operating Profit After Tax Reconciliation $‘000s 12,000 1,205 (1,009) 716 (654) 10,000 9,232 843 (296) 74 142 8,211 8,000 6,000 4,000 2,000 - Operating Increase in funds Decrease in Increase in Increase in Increase in co- Decrease in rent Decrease in Increase in tax Operating earnings after tax mana

  24. Slide 24: Debt facility summary

    Debt facility summary Corporate debt facility Facility Limit $8.0 million Drawn at 30 June 2019 $6.0 million Loan to Value Ratio (LVR) 8.3% LVR Covenant < 35.0% Distribution Cover Ratio (DCR) 11.1 x DCR Covenant > 2.0 x Cost of debt (p.a.) 5.4% Expiry March 2020 Security Mortgage over specified asse

  25. Slide 25: Important notice

    Important notice Disclaimer This investor presentation (Presentation) has been prepared by APN Property Group Limited (ACN 109 846 068, APD.ASX) (APN). This Presentation contains summary information about APN and one or more of the funds managed by APN Funds Management Limited (APNFM) (ACN 080 674 4

  26. Slide 26: Important notice

    Important notice Third party ratings The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036 for the APN AREIT Fund as at August 2018 and APN Asian REIT Fund as at June 2019. SQM Research is an investment research firm that undertakes research on investment product

  27. Slide 27: Contact details

    Contact details Tim Slattery Chief Executive Officer +613 8656 1000 +61400 444 864  tim.slattery@apngroup.com.au Follow us… @apngroup APN Property Group Limited APN Property Group Limited apnpropertygroup Level 30,101 Collins Street, http://blog.apngroup.com.au Melbourne, Vic 3000 apngroup.com.au a

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