CVC Limited · ASX:CVC
CVC — FY2018 Earnings Presentation
29 slides from CVC's earnings presentation, June 2018
Slide 1: Financial Results Year Ended 30 June 2018
FINANCIAL RESULTS YEAR ENDED 30 JUNE 2018 INVESTOR PRESENTATION May 2018 [ CVC Limited | 2018 Investor Presentation ]
Slide 2: Disclaimer
Disclaimer Important Notice Financial amounts This Presentation (Presentation) has been prepared and issued by CVC Limited ACN 002 700 361 (CVC). All dollar values are in Australian Dollars (A$) and financial data is presented as at the date of this presentation unless stated otherwise. CVC’s result
Slide 3: CVC Result Highlights
CVC Result Highlights 1 July 2017 – 30 June 2018 $22.7M $0.15 $1.71 $1.00 $68.5M $65.2M NPAT DIVIDEND STATUTORY NTA UNRECOGNISED NET CASH REVENUE to shareholders 100% franked Per Share NTA PRE-TAX (Cash of $71.1M less at UPLIFT1 call debt of $2.6M) 1. Refer commentary on slide 13 for further informa
Slide 4: CVC Result Highlights
CVC Result Highlights 1 July 2017 – 30 June 2018 • Underlying FY18 NPAT of $27.1 million • Significantly increased value of property portfolio with improved terms for Marsden Park / Mirvac PDA and progress on construction, planning and • FY18 NPAT to shareholders of $22.7 million commercialisation o
Slide 5: CVC Overview
CVC Overview 1 July 2017 – 30 June 2018 CVC Limited (“CVC”) is an ASX listed diversified investment company, deploying capital across a variety of asset classes 300+ $318 investments million 30+ made across all industries at varying stages of development 22% Market Capitalisation2 13 investment year
Slide 6: CVC Track Record
CVC Track Record 1 July 2017 – 30 June 2018 Total Shareholder Return Since 30 June 1998 Total Shareholder Return since 30 June 1998 $4.50 $450,000 $4.00 $400,000 $3.50 $350,000 $3.00 $300,000 $2.50 $2.00 $250,000 $1.50 $200,000 $1.00 $150,000 $0.50 $100,000 $0.00 30/06/1998 30/06/1999 30/06/2000 30/
Slide 7: CVC Business Overview
CVC Business Overview Total reported assets at 30 June 2018 Private Equity Unallocated Investments in unlisted Cash and deposits businesses including pre-IPO, 6% unlisted funds and relevant 5% corporate assistance fees Funds Management 24% Investments in listed equities Commercial Debt and managers,
Slide 8: CVC Note Raising Rationale
CVC Note Raising Rationale 1 July 2017 – 30 June 2018 • Surplus cash balances from H1 FY18 deployed during H2 FY18 • Increasing quality of deal flow and opportunities to deploy capital at return rates below historical target of >15% return - but which are accretive to shareholders. Limited capacity
Slide 9: About CVC – Listed Investments
About CVC – Listed Investments 1 July 2017 – 30 June 2018 2018 Return Investment Highlights and Objectives • Substantial positive contributions from PBP, TLX, EDC, CYC, TOT, BNO, MSV, SEA $ 105m $ 14.9m 20% • Substantial negative contributions from INP, UBI, TFL, PRT, IDZ Invested Profit IRR • Imple
Slide 10: About CVC – Listed Investments
About CVC – Listed Investments 1 July 2017 – 30 June 2018 CVC Equity Portfolio includes the following investments, with holdings and values as at 30 June 2018 • Creates value through active management of large strategic holdings that are identified CVC Top 20 Holdings as undervalued, counter-cyclica
Slide 11: Private Equity => ASX – South Pack Case Study
Private Equity => ASX – South Pack Case Study 1 July 2017 – 30 June 2018 CVC completed a trade-sale of South Pack Laboratories (AUST) (“South Pack”) to ASX listed Probiotec Limited (ASX:PBP) generating an 85% internal rate of return • South Pack is a TGA licensed contract packer located in Kirrawee,
Slide 12: About CVC – Direct Property Investments
About CVC – Direct Property Investments 1 July 2017 – 30 June 2018 2018 Return Highlights Advancement of major planning projects including: • $ 19.1m 2 $ 15.6m 79% 1 • • Marsden Park (Exhibition of PSP) Donnybrook (PSP progressed) East Bentleigh (VPA Strategic Site) Invested Profit gross return • Tu
Slide 13: About CVC – Direct Property Investments
About CVC – Direct Property Investments 1 July 2017 – 30 June 2018 Investment Philosophy When taking a direct investment in property assets, CVC seeks to capitalise from: • Partner capability • Capital protection / limit downside • Asset mispricing • Rockhampton – Development • Attractive upside out
Slide 14: About CVC – Direct Property Investments
About CVC – Direct Property Investments 1 July 2017 – 30 June 2018 CVC has a strong property portfolio at various stages through the reposition / planning phase Project State Style Location Status Forecast Proposed Land Use Outcome Date Kingsgrove NSW Option South West Sydney Planning Commenced FY 2
Slide 15: Direct Property Investments – Portfolio Investments
About CVC – Direct Property Investments 1 July 2017 – 30 June 2018 Portfolio Investments DONNYBROOK Investment Commencement 2014 CVC Ownership 49% in partnership with Villa World Limited Investment Strategy Rezoning of Urban Growth Zone land to residential land Current Status Precinct structure plan
Slide 16: Direct Property Investments – Portfolio Investments
About CVC – Direct Property Investments 1 July 2017 – 30 June 2018 Portfolio Investments MARSDEN PARK Investment Commencement 2012 CVC Ownership 66% in partnership with private developer Investment Strategy Rezoning of rural land to greenfield residential development Current Status Precinct structur
Slide 17: About CVC – Property Backed Lending
About CVC – Property Backed Lending 1 July 2017 – 30 June 2018 2018 Return Investment Philosophy • CVC has a long and successful track record of providing secured $ 40.7m $ 8.6m 22% 1 • property finance to developers and investors. It has been active in this space for over 20 years Through a rigorou
Slide 18: About CVC – Property Backed Lending
About CVC – Property Backed Lending 1 July 2017 – 30 June 2018 AUSTRALIAN COMMERCIAL PROPERTY LENDING PROPERTY DEVELOPMENT FUNDING PYRAMID ($bn) Major Bank Position Alternative Financier Opportunity Senior Bank Debt Mezzanine Debt 84% $ 26 bn 16% $ 30 bn 35% $ 56 bn 65% “Gap” financing opportunity P
Slide 19: Property Backed Lending – Portfolio Investments
About CVC – Property Backed Lending 1 July 2017 – 30 June 2018 Portfolio Investments Palm Beach, QLD East Bentleigh, VIC • Stretch Senior Finance Facility Subject Site • Mezzanine Finance Facility • Peak Forecast LVR: 70% • Peak Forecast LVR: 70% • Forecast Investment IRR: 15% • Forecast Investment
Slide 20: About CVC – Private Equity Investments
About CVC – Private Equity Investments 1 July 2017 – 30 June 2018 2018 Return Highlights • Sale of CVC investment in South Pack Laboratories (Aust) Pty Ltd during the financial year to Probiotec Limited (ASX: PBP). $ 18.5m $ 0.8m 4% 1 • Acted as joint underwriter of a capital raising of CleanSpace s
Slide 21: Private Equity Case Study – CleanSpace
About CVC – Private Equity Case Study 1 July 2017 – 30 June 2018 CLEANSPACE® IS A BREAK THROUGH TECHNOLOGY FOR PERSONAL PROTECTION DEVICES & CONSUMABLES • Founded by a team of biomedical engineers from ResMed in 2009. • Advanced technology in low innovating large stable markets. • Strong financial m
Slide 22: About CVC – Private Equity
About CVC – Private Equity 1 July 2017 – 30 June 2018 Highlights • Sale of CVC’s investment in South Pack Laboratories (Aust) during the financial year to Probiotec Limited (ASX: PBP) for a combination of cash and scrip • Telix Pharmaceuticals IPO in January 2017: 3.7x return on IPO • Holding value
Slide 23: About CVC – Alternative Assets/Debt
About CVC –Alternative Assets/Debt 1 July 2017 – 30 June 2018 2018 Return Investment Philosophy • CVC has the ability to provide flexible funding solutions for private $ 14.6m $ 1.4m 12% 1 • equity investments which include ordinary debt and convertible notes This is achieved through consideration o
Slide 24: About CVC – Funds Management
About CVC – Funds Management 1 July 2017 – 30 June 2018 2018 Return Highlights • Growth of funds management businesses, including provision of seed and growth capital for: $ 3.9m $ 0.5m 22% 1 • • Australian Invoice Finance Limited; and Bigstone Capital Pty Limited invested profit • Support by CVC of
Slide 25: About CVC – Funds Management
About CVC – Funds Management 1 July 2017 – 30 June 2018 Highlights: • CVC’s expertise across a broad range of investments permits • CVC makes investments through its funds management business investment in a number of strategies utilising the same investment approach as listed equity, private equity
Slide 26: About CVC – Funds Management
About CVC – Funds Management 1 July 2017 – 30 June 2018 PORTFOLIO INVESTMENT • Boutique Real Estate Finance and Investment House • Established in 2011 by founders Adam Jane and Daniel Knights (ex-Macquarie Group executives) • CVC Ownership 40% • Provides wholesale investors with opportunities to par
Slide 27: CVC Board of Directors
CVC Board of Directors 1 July 2017 – 30 June 2018 John Read Alexander (Sandy) Beard Ian Campbell Chairman Managing Director Independent Director • Experienced Chairman and Director in • Joined CVC in 1991 as Group Financial • 30 years experience as a former partner with public, private and governmen
Slide 28: CVC Management Team
CVC Management Team 1 July 2017 – 30 June 2018 John Hunter Mark Avery Jufri Abidin Christian Jensen Chief Financial Officer Property Manager Investment Manager Investment Manager • Joined CVC in 2006 and has overseen the • Responsible for the group’s real estate • Jufri takes an active role in deal
Slide 29: CVC Outlook
CVC Outlook 1 July 2017 – 30 June 2018 • Dividend for FY19 not less than 15 cents per share • NPAT expected to be not dissimilar to FY18 subject to market conditions and timing of investment realisations • Targeting to increase funds under management by approximately $100 million, including launch o