Argosy Property Limited · NZX:ARG
Argosy Property — Shareholder Meeting (August 2013)
26 slides from Argosy Property's shareholder meeting presentation, Aug 27, 2013
Slide 1: Argosy Property Limited CEO Presentation
ARGOSY PROPERTY LIMITED CEO Presentation 27 August 2013
Slide 2: Highlights
HIGHLIGHTS Share price performance in excess of NZ Property Gross Index Increase in property values for third successive year Successful Placement and Share Purchase Plan raising $100m Successful rights issue raising $87m Dividend of 6.0 cents per share for the 12 months to 31 March 2013 Weighted av
Slide 3: Share Price Performance - One Year
SHARE PRICE PERFORMANCE One year 130 125 120 Gross Prices Indexed to 100 115 110 105 100 95 Apr-12 Jun-12 Nov-12 Mar-12 Jul-12 Feb-13 Mar-13 May-12 Aug-12 Sep-12 Oct-12 Dec-12 Jan-13 Argosy Property Limited NZ Property Gross Index NZX 50 Index
Slide 4: Share Price Performance - Three Year
SHARE PRICE PERFORMANCE Three year 175 165 155 Gross Prices Indexed to 100 145 135 125 115 105 95 85 Jun-10 Jun-11 Jun-12 Mar-10 Mar-11 Mar-12 Mar-13 Dec-10 Dec-11 Dec-12 Sep-10 Sep-11 Sep-12 Argosy Property Limited NZ Property Gross Index NZX 50 Index
Slide 5: Financial Overview
Argosy FINANCIAL OVERVIEW
Slide 6: Financial Overview
FINANCIAL OVERVIEW Financial performance FY13 FY12 Shares on issue 680.9m 558.5m Shareholders’ funds (less intangible assets) $601.3m $488.4m Net tangible asset backing per share (cents) 88.3 87.5 Investment properties $976.9m $905.2m Other assets $15.9m $24.1m Total assets $992.8m $929.3m Bank debt
Slide 7: Financial Overview
FINANCIAL OVERVIEW Financial performance FY13 FY12 Net rental income $69.9m $71.2m Revaluation gains/(losses) on investment property $ 9.3m $ 3.7m Profit/(loss) before tax $38.7m $(3.0m) Distributable income FY13 FY12 Profit/(loss) before income tax $38.7m $(3.0m) Adjustments $1.7m $36.4m Gross dist
Slide 8: Well clear of banking covenants
FINANCIAL OVERVIEW Well clear of banking covenants FY13 FY12 Loan to valuation ratio: Not to exceed 50% 33.4% 42.5% WALT: Must exceed 3 Years 5.24 4.77 Interest cover ratio: Equal or exceed 2.00x 2.33x 2.07x
Slide 9: Savings since Internalisation
Savings since Internalisation $Million Purchase of management contract & related costs 21.7 Less tax (6.1) Total internalisation costs after tax 15.6 Estimated savings to 31 March 2013 (after tax) FY12 (seven months) 1.8 FY13* 4.0 5.8 * Includes estimated incentive payments After 1 year & 7 months,
Slide 10: Strategy
Argosy STRATEGY
Slide 11: Portfolio Investment Strategy
PORTFOLIO INVESTMENT STRATEGY Argosy is and will remain invested in a portfolio that is diversified by primary sector, grade, location and tenant mix. The portfolio will be in the primary Auckland and Wellington markets with modest tenant-driven exposure to provincial markets. Argosy’s portfolio con
Slide 12: Portfolio Investment Policy
PORTFOLIO INVESTMENT POLICY Argosy’s Investment Policy defines what properties we will seek to own, i.e. it sets the boundaries within which we will operate and invest. Argosy has developed an acquisition checklist with its overall strategy in mind – and every potential acquisition (and portfolio as
Slide 13: Portfolio Investment Policy
PORTFOLIO INVESTMENT POLICY Value parameters Greater than $10 million unless strategically imperative ($6 million for Industrial) ✓ No more than 10% of overall portfolio value ✓ Due diligence Apply Argosy due diligence checklist ✓ Seismic integrity ≥ 70% (unless this represents a Value Add opportuni
Slide 14: Portfolio Investment Policy
PORTFOLIO INVESTMENT POLICY Additional considerations In some cases a portfolio of assets may be considered. The strategy for the acquired portfolio must be consistent with the overall Argosy investment strategy (i.e. the majority by value of the properties are either Core or offer potential to move
Slide 15: Current v Target Portfolio Mix
CURRENT V TARGET PORTFOLIO MIX Core properties will represent 83% of the portfolio after the acquisition of the Vector Centre and the NZ Post and Stout St development capex is included, and Value Add 8%. Approximately 9% of the portfolio (including land) will be divested as market conditions allow.
Slide 16: Portfolio Overview
Argosy PORTFOLIO OVERVIEW
Slide 17: Portfolio Mix
PORTFOLIO MIX Diversification (as 31 March 2013) Portfolio Value by Sector Portfolio Value by Region 1% 4% 6% 33% 34% 19% 3% 71% 29% Commercial Auckland Industrial Wellington Industrial Land Palmerston Retail North Retail Land Regional
Slide 18: Lease Maturity Comparison
LEASE MATURITY COMPARISON 20% 19% 18% 17% 16% % of portfolio (by income) 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Vacant 10 + Year Year ending At 31 March 2013 At 31 March 2012
Slide 19: Lease Maturity July 2013
LEASE MATURITY 31 JULY 2013 22% 45 21% 20% 39 40 19% 36 18% Percentage of portfolio (by income) 17% 35 16% 15% 27 30 14% 26 20.3% No. of leases 13% 23 24 12% 25 11% 21 10% 20 9% 16 8% 15.6% 14 7% 15 6% 5% 10.4% 8 4.9% 9.7% 8.8% 8.1% 7 10 4% 7.4% 7.1% 3% 3.2% 3 5 2% 2.41% 1% 2.0% 0% 0 Year ending The
Slide 20: Top FY14 Expiries
TOP 10 FY14 EXPIRIES Tenant Building NLA (sqm) Current Rent Expiry date Pagani Clothing Limited 8-14 Willis St, Wellington 691.18 $ 468,142 14/09/2013 Linfox 32 Bell Avenue 5,272.00 $ 407,005 31/03/2014 Noel Leeming Group Limited Albany Mega Centre 1,465.30 $ 382,843 31/03/2014 2 Degrees Mobile 65 U
Slide 21: Commercial / Office
COMMERCIAL / OFFICE NUMBER OF BUILDINGS 17 MARKET VALUE OF ASSETS ($M) $336.34 VACANCY FACTOR (BY RENT) 3.5% WALT (YEARS) 4.88 PASSING YIELD 8.40% VALUATION CHANGE 3.59%
Slide 22: Retail
RETAIL NUMBER OF BUILDINGS 13 MARKET VALUE OF ASSETS ($M) $321.49 VACANCY FACTOR (BY RENT) 1.5% WALT (YEARS) 5.76 PASSING YIELD 8.16% VALUATION CHANGE 2.66%
Slide 23: Industrial
INDUSTRIAL NUMBER OF BUILDINGS 32 MARKET VALUE OF ASSETS ($M) $284.53 VACANCY FACTOR (BY RENT) 6.6% WALT (YEARS) 5.1 PASSING YIELD 8.17% VALUATION CHANGE 0.62%
Slide 24: Key Focus Areas for This Year
KEY FOCUS AREAS FOR THIS YEAR Investment strategy – ensuring consistency with strategy and application of acquisition criteria. Leasing remains a key focus as values are fundamentally affected by weighted average lease term and projected incentive levels. Ensuring that Argosy is well positioned to g
Slide 25: Disclaimer
DISCLAIMER This presentation has been prepared by Argosy Property Limited. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making an
Slide 26: Thank You
Argosy THANK YOU