Slide 1: Interim Results Briefing
INTERIM RESULTS BRIEFING
Slide 2: Agenda
AGENDA 1. Highlights 2. Portfolio 3. Market & Strategy 4. 2016 Interim Results 5. Capital Management 6. Closing & Questions 7. Appendices PROPERTY FOR INDUSTRY 2016 INTERIM RESULTS BRIEFING 2
Slide 3: Highlights
Slide 4: Highlights
HIGHLIGHTS • Profit after tax for the six months to 30 June 2016 of $22.5 million or 5.01 cents per share • Distributable profit for the six months to 30 June 2016 of 3.77 cents per share • Increased guidance for full year distributable profit: 7.7 cents per share before management performance fees,
Slide 5: Portfolio
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Slide 6: Portfolio Snapshot
PORTFOLIO SNAPSHOT • PFI’s portfolio is diversified across 84 properties and 142 tenants, with 99.5% occupancy and a weighted average lease term of 4.87 years, weighted towards Auckland industrial property 30 June 2016 31 December 2015 30 June 2015 Valuation $1,010.1m $986.6m $930.3m Number of prope
Slide 7: Portfolio Performance
PORTFOLIO PERFORMANCE • Valuations: • Full valuations for eight properties, that either had significant capital works or were the subject of significant leasing, resulted in $10.6 million or 10.2% uplift on those properties, desktop review of remainder of portfolio • Leasing: • 15 leases agreed over
Slide 8: Lease Events
LEASE EVENTS • 2016 Lease Expiry Profile: • ~35% of portfolio subject to lease events in the remainder of 2016, of that ~20% of lease events market related, provides continued opportunity to access projected market rental growth: Jun 2016 7% 1% 14% 9% 1% No Event 10% 36% CPI • 1.4% of portfolio due
Slide 9: Penrose Portfolio
PENROSE PORTFOLIO • Portfolio of five industrial properties in Penrose, located on Hugo Johnston Drive and Autumn Place, purchased August 2015 via sale and lease back with short term lease in place • Sistema Plastics moving to new purpose built facility, due to vacate all properties Q1 2017 • Market
Slide 10: Market & Strategy
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Slide 11: Market Update
MARKET UPDATE • The industrial property sector performed well during first half of 2016 • Colliers International: Commercial Property Investor Confidence Survey • Investor demand for industrial property reached new high at the end of Q2 2016 • Tauranga / Mount Maunganui and Auckland (90% of PFI’s pr
Slide 12: Strategy
STRATEGY • PFI’s strategy: to invest in quality industrial property in New Zealand’s main urban centres • The company aims to drive shareholder returns by managing the vacancy and upcoming lease expiries and acquiring, developing and divesting as follows: • 2016 acquisition strategy: opportunistical
Slide 13: Strategy (continued)
STRATEGY (CONTINUED) Continued from previous slide • 2016 development strategy: maximise utilisation of the portfolio by development of ~$3.6 million of surplus Auckland land over medium term, targeting a return on incremental cost of ~7%, subject to commercial viability and consents Interim updat
Slide 14: 2016 Interim Results
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Slide 15: Operating Revenue
OPERATING REVENUE • Operating revenues of $35.2 million up $3.1 million or 9.7% • Around half of the increase due to FY 2015 acquisitions ($1.7 million) • Remainder of the increase from positive leasing activity that was broad based in nature PROPERTY FOR INDUSTRY 2016 INTERIM RESULTS BRIEFING 15
Slide 16: Comprehensive Income
COMPREHENSIVE INCOME For the six months ended (audited, $000) June 16 June 15 Change Total operating revenue 35,228 32,122 3,106 • Operating revenues up $3.1 million or 9.7%, refer slide Non-recoverable property costs (894) (989) 95 15: operating revenue Interest expense and bank fees (8,913) (9,642
Slide 17: Distributable Profit (Cents per Share)
DISTRIBUTABLE PROFIT (CENTS PER SHARE, CPS) • Distributable profit per share up 0.41 cps or 12.3% • H1 2016 dividends of 3.50 cps, in line with H1 2015 • Increased guidance for full year distributable profit: 7.7 cents per share before management performance fees, 7.4 cents per share after managemen
Slide 18: Investment Properties
INVESTMENT PROPERTIES • Portfolio now in excess of $1 billion • $13.3 million of capital spent on portfolio, including $11.7 million on the finalisation of the development at 124 Hewletts Road • Unrealised fair value gain of $10.6 million from full valuations of eight properties, refer slide 7: port
Slide 19: Net Tangible Assets (Cents per Share)
NET TANGIBLE ASSETS (CENTS PER SHARE, CPS) • Net tangible assets (NTA) per share up 1.4 cps or 1.0% to 141.9 cps • Increase in fair value of investment properties (refer slide 7: portfolio performance) partially offset by reduction in the fair value of financial instruments of $7.1 million or 1.6 cp
Slide 20: Capital Management
Slide 21: Capital Management
CAPITAL MANAGEMENT • Strong balance sheet maintained via a number of capital management initiatives: • Equity: $4.3 million raised from the Q4 2015 and Q1 2016 dividend reinvestment • Loan facilities: active management of facilities and hedging to ensure long term facilities maintained at attractive
Slide 22: Loan Facilities
LOAN FACILITIES • Facilities refinanced February 2016, average term extended, cost reduced • Hedging rate for H2 2016 will reduce to ~4.57%, will reduce further in 2017 to ~4.46% June 2016 December 2015 Facilities Drawn (excluding overdraft) $337.2m $331.7m Facilities limit $375.0m $375.0m Facilitie
Slide 23: Hedging
HEDGING PROPERTY FOR INDUSTRY 2016 INTERIM RESULTS BRIEFING 23
Slide 24: Closing & Questions
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Slide 25: Closing & Questions
CLOSING & QUESTIONS • Quality portfolio continues to deliver: occupancy 99.5%, H2 2016 expiries of 1.4% and WALT of 4.87 years • Industrial property sector performing well, company well positioned to capture growth • Robust result: profit after tax of 5.01 cps, distributable profit of 3.77 cps and n
Slide 26: Appendices
APPENDICES /APP
Slide 27: Appendix 1: Distributable Profit
APPENDIX 1: DISTRIBUTABLE PROFIT For the six months ended (unaudited, $000, unless noted) June 2016 June 2015 June 2016 June 2015 Current policy: including management Historical policy: excluding management performance fees net of tax performance fees net of tax Profit and total comprehensive income
Slide 28: Appendix 2: Financial Position
APPENDIX 2: FINANCIAL POSITION As at ($000, unless noted) June 2016 (unaudited) December 2015 (audited) Change Investment properties 1,010,087 986,565 23,522 Goodwill 29,086 29,086 - Other assets 2,622 11,593 (8,971) Total assets 1,041,795 1,027,244 14,551 Borrowings 336,321 330,920 5,401 Deferred t
Slide 29: Disclaimer
DISCLAIMER The information included in this presentation is provided as at 9 August 2016. Neither Property For Industry Limited (PFI) nor PFIM Limited (PFIM), the manager of PFI, guarantee the repayment of capital or the performance referred to in this presentation. Past performance is not a reliabl