Waypoint Reit Ltd. · ASX:WPR
Waypoint Reit — Viva Energy REIT — FY2016 Earnings Presentation
33 slides from Waypoint Reit's earnings presentation, Feb 23, 2017
Slide 1: Viva Energy REIT Results Period Ended 31 December 2016
VIVA ENERGY REIT RESULTS PERIOD ENDED 31 DECEMBER 2016 23 February 2017
Slide 2: Disclaimer
Disclaimer: This presentation has been prepared by Viva Energy REIT (“VVR” or “Viva This presentation has been prepared without taking into account the associates, related entities, directors, employees and consultants do not Energy REIT”) which is a stapled entity comprising shares in Viva Energy i
Slide 3: Agenda
Agenda Highlights 4 Financial Results 11 Portfolio & Acquisition Update 16 Industry Update 22 Viva Energy Australia Update 26 FY2017 Outlook 30 Questions 33
Slide 4: Highlights
Highlights Margaret Kennedy Coles Express West Ryde, NSW Managing Director VER Manager
Slide 5: Viva Energy REIT Overview
Viva Energy REIT Overview As at 31 December 2016 Portfolio of 425 high quality service station properties Geographically diverse across all Australian states and territories Security of income through long term triple-net leases to Viva Energy Australia, a high quality tenant 100% occupancy, 3% p.a.
Slide 6: Highlights
Highlights Business Deal Pipeline Exceeded IPO Gearing Below Platform Established Forecast Target Range Established 6
Slide 7: Financial Highlights
Financial Highlights Period ended 31 December 2016 Statutory Net Profit $1.0m Distributable Earnings $36.5m 5.28 CPS +3.7% forecast Paid 6 Feb 2017 Payout Ratio 100% Net Tangible Assets (NTA) $2.07 per stapled security 7
Slide 8: Portfolio/Acquisition Highlights
Portfolio/Acquisition Highlights Portfolio1 at 31 December 2016 Valuation WACR WALE $2.1 billion 5.9% 14.9 years Acquisitions2 contracted for total $26.2 million3 Location Annerley, QLD Half Way Creek, NSW Blaxland, NSW Alice Springs, NT Price3 $10.8 million $7.0 million $5.5 million $2.9 million Yi
Slide 9: Strategy
Strategy Service station investments – strong defensive characteristics Consumer Demand for Investment Contracted Triple net leases Highly liquid staple - fuel and fuel relatively grade rated rental growth property convenience inelastic tenant profile underpins market earnings growth Acquisition pip
Slide 10: Portfolio Overview
Portfolio Overview As at 31 December 2016 • 3% fixed rental growth commencing August 20171 • Properties will be independently valued at least every three years on a rolling annual basis commencing as at 31 Dec 2017 • WALE 14.9 years Portfolio WALE – by income Expiry by number of properties: 42 39 44
Slide 11: Financial Results
Financial Results Guy Farrands Coles Express Coorparoo, QLD Chief Financial Officer VER Manager
Slide 12: Statutory Financial Performance
Statutory Financial Performance Statutory Profit and Loss $M Period to 31 Dec 2016 PDS Forecast REVENUE Gross property income 49.2 49.2 Straight lining of rental income 12.1 12.1 One off interest Interest income 0.4 0.2 income Total revenue 61.7 61.5 EXPENSES Swapped at lower Interest expense (11.6)
Slide 13: Distributable Earnings
Distributable Earnings Distributable Earnings $M Period to 31 Dec 2016 PDS Forecast Gross property income 49.2 49.2 Straight lining of rental income 12.1 12.1 Interest income 0.4 0.2 Total revenue 61.7 61.5 Interest expense (11.6) (12.2) Board and Management expenses (2.1) (2.6) Total operating expe
Slide 14: Financial Position
Financial Position Balance Sheet $M 31 Dec 2016 $36m distributed Cash 54 6 Feb 2017 Unchanged Investment properties 2,105 from PDS Fair value of interest rate swaps 12 Prepayments and deposits 2 Total Assets 2,173 Accounts payable and accruals 12 Borrowings 731 Total Liabilities 743 Net Assets 1,430
Slide 15: Capital Management
Capital Management As at 31 December 2016 Gearing at 34.4% and forecast FY17 ICR of 4.1X Target gearing between 35% to 45% Drawn debt has been 100% hedged for a weighted average 3.6 years at an average interest rate of 3.72% Unsecured borrowings with no priority security Additional $100 million 3 ye
Slide 16: Portfolio & Acquisition Update
Portfolio & Acquisition Update Margaret Kennedy Coles Express Ultimo, NSW
Slide 17: Portfolio Overview
Portfolio Overview As at 31 December 2016 1% Portfolio characteristics 1 20% • Portfolio weighted towards Australia’s more populous 8% Eastern seaboard 6% • High proportion of metropolitan sites 33% ––Typically higher value and higher volume sites 3% that attract tighter capitalisation rates 27% • R
Slide 18: Acquisition Summary
Acquisition Summary VVR has entered into contracts to acquire four Shell/Coles Express sites –– One new to industry site –– One established truck stop site –– Two established retail sites Total acquisition price $26.2m1 WACR 6.4%1 WALE of Viva Energy Australia tenancy is 8 years 1. Excluding transac
Slide 19: Acquisition – QLD
Acquisition – QLD 388 Ipswich Road, Annerley, QLD Price $10,800,0001 New to industry Shell/Coles Express site in prime inner Cap rate 5.3%1 Brisbane location on a major arterial Site Area 2,463 sqm approx 100% of rental income attributable to Viva Energy Australia Unexpired Viva 14.9 years plus Trip
Slide 20: Acquisitions – NSW
Acquisitions – NSW 4974 Pacific Highway, Half Way Creek, NSW Price $7,000,0002 Existing Shell/Coles Express site with Dominos Pizza1 as Cap rate 7.5%2 co tenant Site Area 65,660 sqm approx 87% of rental income attributable to Viva Energy Australia Unexpired Viva 4.7 years plus Double net lease, rent
Slide 21: Acquisition – NT
Acquisition – NT 11 Lilbili Street Braitling, Alice Springs, NT Price $2,900,0001 Existing Shell/Coles Express truck stop site on major Cap rate 6.6%1 interstate highway location Site Area 48,700 sqm approx 100% of rental income attributable to Viva Energy Australia Unexpired Viva 10.3 years Double
Slide 22: Industry Update
Industry Update Margaret Kennedy Coles Express St Kilda, VIC
Slide 23: Fuel Retailing in Australia 2016
Fuel Retailing in Australia 2016 Source: Magner, L. (October 2016). Fuelled up: Revenue is set to recover over the next five years as oil prices increase. IBISWorld Industry Report G4000 Fuel Retailing in Australia. Retrieved from IBISWorld database Moderate level of market share concentration Key s
Slide 24: Industry Participant Update
Industry Participant Update Woolworths APN Property Caltex Australia announced plans to Group launched an purchase Milemaker sell fuel business unlisted fund with (Vic) & Gull and enter strategic an initial portfolio New Zealand partnership with BP of 23 Puma sites Coles Express Balmoral, QLD 24
Slide 25: Service Station Sales during year ended 31 December 2016
Service Station Sales during year ended 31 December 2016 9% 8% 7% 6% Initial Yield VVR Initial Portfolio 5% 4% 3% 2% 0 5 10 15 20 Remaining Lease Term Strong sales Market Evidence of activity during remains sales supporting 2016 highly liquid long lease terms Source: JLL Market Report 31 December 20
Slide 26: Viva Energy Australia Update
Viva Energy Australia Update Margaret Kennedy Coles Express Greenacre, NSW This section includes information regarding Viva Energy Australia Pty Ltd and its affiliates and their collective operations (Viva Energy). The information is provided for background purposes only, and neither VVR, nor the re
Slide 27: Snapshot of Viva Energy Australia
Snapshot of Viva Energy Australia Fully integrated player with key positions in all major market segments Trading Refining & supply Distribution Marketing Retail Alliance Viva Energy’s Geelong Retail Dealer Refinery Owned Wholesale Other domestic Aviation1 refineries Viva Energy’s Distribution Asset
Slide 28: Viva Energy Australia Retail Network
Viva Energy Australia Retail Network A leading fuel and convenience retailing platform Viva Energy overview Viva Energy manufactures, supplies and markets fuel in Australia through a network of 952 Shell branded service stations1 ––695 Alliance properties • Operated by Coles Express2 under lease/lic
Slide 29: Viva Energy Australia Financial Position
Viva Energy Australia Financial Position For year ended 31 December 2016 Assigned S&P BBB- rating; outlook stable in August 2016 Agreed to acquire Shell Aviation business for approximately USD250 million in December 2016, settlement due mid 2017, subject to regulatory and other approvals Productive
Slide 30: FY2017 Outlook
FY2017 Outlook Margaret Kennedy Coles Express Bunker Hill, VIC
Slide 31: Outlook and Forecast
Outlook and Forecast Optimise Core Growth Capital Forecast Business Opportunities Management VVR’s investment objective VVR will consider and Review debt capital Forecast year end Dec is to own a portfolio of high participate in acquisition structure, maintain target 2017 earnings guidance quality a
Slide 32: Glossary
Glossary Alliance The contractual alliance between Viva Energy Australia and Coles Express (and their associated entities), including the Alliance Agreement and Site Agreements as outlined in the PDS Cap Rate Capitalisation Rate Distributable Income This is a non-IFRS measure being net statutory pro
Slide 33: Questions
Questions Coles Express Milton, QLD