Centuria Capital Group · ASX:CNI
Centuria Capital — Over Fifty Group — FY2008 Earnings Presentation
28 slides from Centuria Capital's earnings presentation, Sep 26, 2008
Slide 1: 2008 Financial Year Results Presentation
2008 Financial Year Results Presentation September 2008 John McBain – Chief Executive
Slide 2: Preamble re Accounting Standards
Preamble re Accounting Standards • New international accounting standards were introduced to Australia in 2006, these are referred to as “AIFRS” • Regrettably, AIFRS compels Over Fifty Group “OFG” to consolidate the accounts of the Friendly Society benefit funds, managed by OFG, with OFG’s corporate
Slide 3: Contents
Contents • Key Issues update • Summarised 2008 Financial Results - statutory results - normalised results - earning per share • Financial Results & Analysis • Business Update - necessary steps/ core activities • Friendly Society Business Update • Property Held on Balance Sheet • Property Funds Manag
Slide 4: Key Issues Update
Key Issues Update • Normalised NPAT * to 30.06.08 - $8.018 million • Reported NPAT to 30.06.08 - $(2.707) million • Funds under management and administration increased by $242 million to $2.019 billion (14% increase) • Re-commencement of Dividend Reinvestment Plan • Acquisition of 51% interest in Ec
Slide 5: Summary of Financial Results - 12 months to 30.6.08
Summary of Financial Results - 12 months to 30.6.08 • Normalised NPAT* $8.018 million - increase of 11.9 % over 2007 • Reported NPAT $(2.707) million – owing to; – bad debt write-offs and doubtful debt provisions relating to commercial mortgages (lending ceased and in run off) – fair value adjustmen
Slide 6: Statutory Reported Results (excl. Friendly Society Benefit Funds)
Statutory Reported Results (excl. Friendly Society Benefit Funds) 2008 2007 % Change $000’s $000’s Revenue Property - Funds Management 10,386 11,498 -9.6% Property - Investment (625) 6,378 -109.8% Reverse Mortgages 15,319 7,851 95.1% Friendly Society 18,257 20,113 -9.2% Other and Corporate 2,820 4,1
Slide 7: Normalised Results (excl. Friendly Society Benefit Funds)
Normalised Results (excl. Friendly Society Benefit Funds) 2008 2007 % Change $000’s $000’s Normalised by major division Property Funds Management 4,304 5,976 -28.0% Property Investments 319 2,922 -89.0% Reverse Mortgages (1,456) (3,465) 58.0% Friendly Society 11,709 12,963 -9.7% Commercial Mortgages
Slide 8: Normalised Revenue Analysis (excluding Benefit Funds)
Normalised Revenue Analysis (excluding Benefit Funds) 2008 2007 % Change $000’s $000’s Revenue Property Funds Management 10,386 11,498 Property Investment 2,965 2,523 Reverse Mortgages 15,319 7,851 Friendly Society 18,257 20,113 Commercial Mortgages 5,020 6,570 Other 1,652 3,411 Total Normalised Rev
Slide 9: Earnings Per Share - Normalised (excluding Benefit Funds)
Earnings Per Share - Normalised (excluding Benefit Funds) 2008 2007 % Change $000’s $000’s Normalised EBIT 14,912 13,237 12.7% Normalised NPAT 8,018 7,165 11.9% Shares on issue (weighted average) 58.872 mill 58.349 mil 0.9% Normalised Return on Capital 16.1% 12.6% 27.7% Normalised Earnings per Share
Slide 10: Business Update – Necessary steps
Business Update – Necessary steps In November 2007 a substantially new board was appointed. In the 7 months until 30 June 2008, the three main areas of focus for the board and management have been; • Isolating the core business areas of OFG • Selling or suspending the activities of loss making or no
Slide 11: Business Update - Core Activities of OFG
Business Update - Core Activities of OFG Over Fifty Group “OFG” (Parent Company) Over Fifty Group Property Fund Management Insurance and other activities Friendly Societies subsidiaries • Mature business with • Century Funds Management • Over Fifty Group Insurance 34,000 policyholders - 100% owned o
Slide 12: Business Update – Overview of Core Activities
Business Update – Overview of Core Activities • OFG is the parent company of the group Over Fifty • OFG is listed on the Australian Stock Exchange • OFG is a diversified fund manager and its operating subsidiaries Group Limited have a clear focus on Friendly Society Management and Property “OFG” Fun
Slide 13: Business Update - Growth in FUMA
Business Update - Growth in FUMA Over Fifty Group - Funds Under Management and Administration 2500 $2,019 m $1,777 m 2000 199 $1,137m 120 1500 $1,087 m 921 $m 47 660 5 1000 77 80 500 1005 1010 997 899 0 2005 2006 2007 2008 Friendly Society Property Trusts Reverse Mortgages 13
Slide 14: Friendly Society Business Update – Core Activity
Friendly Society Business Update – Core Activity 1 Staffing Friendly Society management is a core business activity of OFG. The new board has reviewed the management structure noting that there has been no General Manager of this division since late 2006. Accordingly, effective October 2008 Mr Terry
Slide 15: Friendly Society Business Update – continued
Friendly Society Business Update – continued Friendly Society Benefit Funds • Total Benefit funds under management as at 30 June 2008 were $899.1 million. • This represents a decrease of $98.1 million or 9.8% from 30 June 2007. • Decreases in benefit fund investment values as a consequence of declin
Slide 16: Property Held on Balance Sheet
Property Held on Balance Sheet The current board and management are working through three legacy property assets either previously existing on balance sheet or subject to an unconditional acquisition contract. The current management intends to dispose of these assets and repatriate the equity they u
Slide 17: Property Funds Management Highlights – Core Activity
Property Funds Management Highlights – Core Activity 2 • Total property funds under management have increased from $680 million as at 30 June 2007 to $921 million as at 30 June 2008 (including Eclipse Property Group FUM). • Acquisition of 51% interest in Eclipse Property Group June 2008 ($228 millio
Slide 18: Property Funds Management Highlights - continued
Property Funds Management Highlights - continued Century Funds Management Highlights • Century acquisitions of $52.9 million were made in FY08 - Properties acquired; + 14 Mars Road, Lane Cove, NSW for $17.25 million for Century Balanced Fund No 1 acquisition yield of ≈ 8.66% Commercial/industria
Slide 19: Update Regarding Other Business Units
Update Regarding Other Business Units Commercial Mortgage Division (outstanding balance $16.7 million as at 30/6/08) This division was closed in April 2007 and remaining loans are being managed to maturity. In the financial period to 30/6/08 bad mortgage debts of $4.399 million were written off afte
Slide 20: Outlook for 2008/2009 Financial Period
Outlook for 2008/2009 Financial Period General Outlook During the past few months global financial markets have experienced an upheaval not previously witnessed during most of our lifetimes. There has been a massive contraction in the availability of credit globally as a result of reckless sub-prime
Slide 21: Outlook for 2008/2009 Financial Period - continued
Outlook for 2008/2009 Financial Period - continued Specific strategies - Friendly Societies; Our strategies to optimise revenues from Friendly Society activities include; • Install senior experienced staff to take responsibility for the division (Terry Reid now GM) • Re-focus the company on the Frie
Slide 22: Outlook for 2008/2009 Financial Period - continued
Outlook for 2008/2009 Financial Period - continued Specific strategies - Property Funds Management; • OFG’s Property Funds Management business units - “Century” and “Eclipse” both have an established clientele of qualified, repeat investors. These investors either invest directly or are represented
Slide 23: Appendix 1: Profit & Loss for year ended 30 June 2008
Appendix 1: Profit & Loss for year ended 30 June 2008 Statutory accounts Benefit funds Corporate accounts $m $m $m Interest and dividends 73.9 56.1 17.8 Management fees 30.3 - 30.3 Other income (15.2) (15.6) 0.4 Rental income 2.7 - 2.7 Total revenue 91.7 40.5 51.2 Employee benefits expense (8.9) - (
Slide 24: Appendix 2: Cash flow statement for year ended 30 June 2008
Appendix 2: Cash flow statement for year ended 30 June 2008 Statutory Benefit funds Corporate accounts accounts $m $m $m Cash flows from operating activities Interest received 44.4 27.0 17.4 Dividends received 17.2 17.2 - Rent and other income received 31.4 21.4 10.0 Management fees received 25.2 -
Slide 25: Appendix 2: Cash flow statement for year ended 30 June 2008 (cont)
Appendix 2: Cash flow statement for year ended 30 June 2008 (cont) Statutory Benefit funds Corporate accounts accounts $m $m $m Cash flows from financing activities Loans from/(to) related entities 1.9 (0.1) 2.0 Dividends paid (6.5) - (6.5) Proceeds from borrowings – Other 23.4 - 23.4 Proceeds from
Slide 26: Appendix 3: Balance sheet as at 30 June 2008
Appendix 3: Balance sheet as at 30 June 2008 Statutory accounts Benefit funds Corporate accounts ($m) ($m) ($m) Assets: Cash and equivalents 20.5 7.2 13.3 Trade and other receivables 14.2 2.6 11.6 Financial assets at fair value 693.6 684.8 8.8 Derivative financial assets 2.2 0.9 1.3 Other financial
Slide 27: Appendix 3: Balance sheet as at 30 June 2008 (cont)
Appendix 3: Balance sheet as at 30 June 2008 (cont) Statutory accounts Benefit funds Corporate accounts ($m) ($m) ($m) Liabilities: Trade and other payables 8.1 0.2 7.9 Borrowings 71.4 - 71.4 Borrowings - Reverse Mortgages (non recourse to OFG group) * 186.1 - 186.1 Policyholders funds 700.6 700.6 -
Slide 28: Disclaimer
Disclaimer This document has been issued by Over Fifty Group Limited ABN 22 095 454 336 and contains general information about Over Fifty Group Limited and its related bodies corporate (Over Fifty Group) which is current as at 29 August 2007. The information in this document is in summary form and d