Centuria Capital Group · ASX:CNI
Centuria Capital — H1 2016 Earnings Presentation
35 slides from Centuria Capital's earnings presentation, Feb 18, 2016
Slide 1: Centuria Capital Limited Results Briefing 1H16
Centuria Capital Centuria Capital Limited Results Briefing 1H16 (Half-year ended 31 December 2015) 18 February 2016 www.centuria.com.au Centuria Capital | CNI : ASX | 1H16 Results Briefing 1
Slide 2: Contents Directory
Centuria Capital Contents Directory 3. 1H16 Review Group Chief Executive John McBain 12. Property Funds Management Division CEO Unlisted Property Funds Jason Huljich 20. Investment Bonds Division CEO Listed Property Funds Nicholas Collishaw 23. Strategy and Outlook GM – Investment Bonds Neil Rogan 2
Slide 3: Centuria Capital Limited
Centuria Capital Centuria Capital Limited Centuria Capital Limited (ASX ticker code: CNI) Market capitalisation $75.1m Statutory NPAT (1H16) $5.7m Underlying NPAT (1H16) $4.4m Funds Under Management $1.8bn • Centuria is an experienced Fund Manager • 35 years experience in Investment Bonds • 16 years
Slide 4: Group Operating Highlights
Centuria Capital Group Operating Highlights Executing on our stated strategy Group Performance • Net tangible assets (NTA) per share up 5.5% to $0.91 • Interim dividend of 2.25 cents per share (cps) up 12.5% on 1H15 • 1H16 underlying profit $4.4 million1 • FY16 underlying profit guidance $9.0 -$10.5
Slide 5: Divisional Operating Highlights
Centuria Capital Divisional Operating Highlights During the period the experience of the property team has lead to the successful conclusion of two highly profitable funds and we continue to find value in acquisitions Property Funds Management Successful completion of major unlisted funds • Sale of
Slide 6: Divisional Operating Highlights
Centuria Capital Divisional Operating Highlights Investment Bonds • Gross inflows into Centuria Life of $14.5 million from July – December 2015, up from $2.0 million in July – December 2014 • Guardian inflows of $20.5 million from July – December 2015, up from $19.2 million from July –December 2014
Slide 7: Financial Summary
Centuria Capital Financial Summary 1H16 1H15 Change Statutory NPAT ($'000) 5,668 7,604 (25.5%) Statutory EPS (basic) 7.4c 9.8c (24.5%) Underlying NPAT ($'000) (1) 4,448 5,376 (17.3%) Underlying EPS (basic) 5.8c 6.9c (15.9%) Dividend per share (fully franked) 2.25c 2.0c 12.5% Statutory Profit After T
Slide 8: Underlying Segment Results
Centuria Capital Underlying Segment Results 1H16 1H15 Commentary Property Funds Management $'000 $'000 Underlying Profit Before Tax ($’000) 7,608 8000 6,772 Underlying profit by segment (1) (2) 6000 Property funds management 7,608 6,772 Reflects increased performance fees and FUM growth 4000 2,463 I
Slide 9: Growth in Assets and Funds Under Management
Centuria Capital Growth in Assets and Funds Under Management • Growth in assets produced a 5.5% increase in NTA per share • 14.6% growth in funds under management across property and investment bond Net tangible assets per share ($) portfolios 1 0.86 0.91 0.8 0.65 • Investment bond division repositi
Slide 10: Source of Operating Revenue
Centuria Capital Source of Operating Revenue 35,000 FY13 FY14 FY15 1H16 30,000 25,000 20,000 15,000 10,000 5,000 - 1H13 FY13 1H14 FY14 1H15 FY15 1H16 Property Fund Management Fees Benefit Fund Management Fees Property Services and Other Revenue Development fees Sales and Acquisition fees Performance
Slide 11: FY16 Guidance
Centuria Capital FY16 Guidance FY16 underlying NPAT guidance announced in the range of $9.0 million to $10.5 million Underlying Net Profit After Tax ($'000) FY16 Guidance 12,000 10,000 $10.5m $9.0m 8,000 $'000 6,000 904 3,038 4,000 2,405 5,376 2,000 4,448 2,932 2,866 - FY13 FY14 FY15 FY16 1st Half 2
Slide 12: Property Funds Management Division
Centuria Capital Property Funds Management Division Centuria Capital | CNI : ASX | 1H16 Results Briefing 12
Slide 13: Property Funds Management Division
Centuria Capital Property Funds Management Division Property Funds Management Division Unlisted Property Funds Listed Property Funds • $720 million in FUM • $379 million in FUM – ASX Listed CMA • 16 years experience • Specialist Metropolitan market investor • Successfully managed unlisted property •
Slide 14: Unlisted Property Highlights
Centuria Capital Unlisted Property Highlights • 32% Growth in Unlisted Property FUM Unlisted Property FUM Growth to $720 million over the 6 months to 800 31 December 2015 750 64 75 • Belmont Road development on track 24 700 3 43 • Appointment of senior property fund sales 650 and marketing specialis
Slide 15: Unlisted Property Highlights
Centuria Capital Unlisted Property Highlights Belmont Road, Mosman, NSW Active transaction flow ensures steady increase in FUM triggering substantial investor profits and fees to Centuria • Completed the sale of 175 Castlereagh Street, Sydney for $98 million • Announced sale of Macquarie Park proper
Slide 16: Realising Value - Unlisted Property Fund Asset Sales
Centuria Capital Realising Value - Unlisted Property Fund Asset Sales 175 Castlereagh St, Sydney 80 Waterloo Rd & 16 Byfield St, North Ryde Macquarie Park Purchase date April 2013 Purchase date 2001 & 2002 Acquisition price $56.0m Acquisition price $25.3m Sale price $98.0m Sale price $101.0m Capital
Slide 17: Building Unlisted Property Fund Pipeline
Centuria Capital Building Unlisted Property Fund Pipeline 203 Pacific Highway, St Leonards Australian Technology Park, Eveleigh Purchase price (50% share) $43.0 m Purchase price $104.0 m Valuation (50% share) $43.5 m Valuation $108.8 m Equity raised $61.8 m Equity raised $30.0 m Offer closed oversub
Slide 18: Listed Property Funds Management Highlights
Centuria Capital Listed Property Funds Management Highlights • Centuria Metropolitan REIT (ASX: CMA) listed on the ASX on 10 December 2014 • CMA utilises Centuria’s capabilities in property management, development and accounting, generating additional recurring income for the Group • Significant lea
Slide 19: Listed Property Funds Management
Centuria Capital Listed Property Funds Management • CMA announced a 3.9%1 increase in portfolio CMA Portfolio Metrics 1H16 valuation to $379.2 million as at 31 December 2015 Portfolio snapshot 1H15 1H16 • CMA delivered on its financial forecast distributing Number of assets 8 13 8.5 cents per staple
Slide 20: Investment Bonds Division
Centuria Capital Investment Bonds Division Centuria Capital | CNI : ASX | 1H16 Results Briefing 20
Slide 21: Investment Bond Division
Centuria Capital Investment Bond Division $374m + $350m = $724m Total FUM of Centuria Life Total FUM of Over Fifty Guardian Total FUM Investment Bonds Friendly Society Bonds • Transformed the business to create a platform for sustainable growth in FY16 • 1H16 inflows $35.0 million (pcp $21.2m) forec
Slide 22: Investment Bond Division
Centuria Capital Investment Bond Division • Built capability in the Business Development and Call Centre Teams • Appointed Senior Business Development Manager NSW/QLD 20 years’ experience in retail financial services • Closed and merged funds where there is no longer customer or adviser demand Fund
Slide 23: Group Strategy
Centuria Capital Group Strategy Centuria Capital | CNI : ASX | 1H16 Results Briefing 23
Slide 24: Group Strategy
Centuria Capital Group Strategy Strategic objectives Centuria will continue to focus on its core operations to drive increased shareholder wealth, specifically: • Expand core business activities in scale and profitability • Provide reliable, growing dividends • Generate increased earnings per share
Slide 25: Group Strategy
Centuria Capital Group Strategy Unlisted Property Strategy • Expectation of strong demand for unlisted property funds due to low interest rate environment • Continued strong investment from HNW investors, family offices and unaligned financial planning groups. • Appointment of senior distribution ma
Slide 26: Group Strategy
Centuria Capital Group Strategy Strategy for Investment Bond division • Centuria Life’s focus is to build long-term, sustainable relationships in the retail advice market and to position the Investment Bond Division as the investment bond provider of choice for third party distributers and selected
Slide 27: Outlook
Centuria Capital Outlook • Centuria remains firmly focussed on growing core business units. • Listed and unlisted property funds management divisions demonstrated strong growth in 1H16 with an impressive acquisitions pipeline • Expand Unlisted Property Funds product offering to include open-ended fu
Slide 28: Appendices
Centuria Capital Appendices Centuria Capital | CNI : ASX | 1H16 Results Briefing 28
Slide 29: Statutory Account Reconciliation
Centuria Capital Statutory Account Reconciliation General comment on statutory accounts reconciliation • The “Statutory Accounts” show the consolidated results of the Company and its controlled entities, including the Benefit Funds of Centuria Life, which Centuria is required to consolidate under Au
Slide 30: Reconciliation of Statutory NPAT to Underlying NPAT
Centuria Capital Reconciliation of Statutory NPAT to Underlying NPAT $’000 $’000 Underlying net profit after tax (1) 4,448 5,376 Non-underlying adjustments: Unrealised gain on fair value of derivatives 2,597 1,126 Accounting valuation of Reverse Mortgage interest swaps Centuria Life seed capital val
Slide 31: Income Statement for half-year ended 31 December 2015
Centuria Capital Appendix 1: (1) Income Statement for half-year ended 31 December 2015 Statutory Accounts Benefit Funds Statutory Accounts excluding Benefit Funds $’000 $’000 $’000 Property funds management revenue 12,958 - 12,958 Investment bond revenue 19,528 (14,542) 4,986 Reverse mortgages reven
Slide 32: Summary Balance Sheet as at 31 December 2015
Centuria Capital Appendix 2: (1) Summary Balance Sheet as at 31 December 2015 Statutory Accounts Benefit Funds Statutory Accounts excluding Benefit Funds $’000 $’000 $’000 Assets Cash and cash equivalents (2) 29,015 - 29,015 Other financial assets – reverse mortgage portfolio (3) 45,530 - 45,530 Pro
Slide 33: Summary Cash Flow Statement for the half-year ended 31 December 2015
Centuria Capital Appendix 3: Summary Cash Flow Statement for the half-year ended 31 December 2015(1) Statutory Accounts Benefit Funds Statutory Accounts excluding Benefit Funds $’000 $’000 $’000 Cash flows from operating activities Management fees received 15,805 - 15,805 Payments to suppliers and e
Slide 34: Disclaimer
Centuria Capital Disclaimer This document has been issued by Centuria Capital Limited ABN 22 095 454 336 and contains general information about Centuria Capital Limited and its related bodies corporate (“Centuria”) which is current as at 18 February 2016. The information in this document is in summa
Slide 35: www.centuria.com.au
Centuria Capital www.centuria.com.au Follow us: Centuria Capital | CNI : ASX | 1H16 Results Briefing 35