Aspen Group Limited · ASX:APZ
Aspen — FY2019 Earnings Presentation
35 slides from Aspen's earnings presentation, Aug 20, 2019
Slide 1: Aspen Group Investor Update August 2019
ASPEN GROUP Investor Update August 2019 Barlings Beach Holiday Park, NSW
Slide 2: Contents
Residents at Four Lanterns Estate, NSW Contents 1 Business Overview 2 FY19 Highlights & Financial Results 3 Operational Performance 4 Portfolio 5 Managed Funds 6 FY19 Statutory Accounts Extract 7 Appendices Sweet Water Grove – marketing campaign, NSW
Slide 3: Business Overview
Residence at Four Lanterns Estate, NSW 1 Business Overview Four Lanterns Estate, NSW 3
Slide 4: Aspen's Business Model
Aspen’s Business Model 1.1 o Aspen is a provider of quality accommodation on competitive terms in the residential, retirement and short stay sectors o Fully integrated platform with strong operating, asset management, development and capital management capabilities that enables us to provide ASPEN’S
Slide 5: Significant Unsatisfied Demand for More Affordable Accommodation
Significant Unsatisfied Demand for More Affordable Accommodation 1.2 o About 1.5 million or 17% of households are considered “stressed” – ie. HOUSING COSTS AND STRESS pay more than 30% of their gross income on housing costs: 35% ▪ 57% are renters (despite Commonwealth Rent Assistance) 30% 25% ▪ 39%
Slide 6: Aspen's Product Offering Considers the Needs of its Target Market
Aspen’s Product Offering Considers the Needs of its Target Market 1.3 Land Dwelling Aspen is highly selective and opportunistic when Leases Rentals acquiring and developing properties to ensure they are suitable for the delivery of quality accommodation on competitive terms to our customer base News
Slide 7: FY19 Highlights & Financial Results
Barlings Beach Holiday Park, NSW Four Lanterns Estate, NSW 2 FY19 Highlights & Financial Results 7
Slide 8: FY19 Highlights
FY19 Highlights 2.1 o Successfully integrated the management teams of Aspen and Mill Hill Capital, and appointed David Dixon and John Carter as Joint Chief Executive Officers in March 2019 o Aspen’s stock produced a total return of 15.7% including a 5.2% distribution yield and 10.5% increase in pric
Slide 9: Financial Performance
Financial Performance 2.2 FY19 FY18 Key Metrics Change o Accommodation revenue increased mainly due to $m $m the acquisition of Highway 1 Tourist Park in Oct 2018, and full year contributions from Darwin Statutory (loss)/profit for the year (7.92) 0.77 FreeSpirit Resort (DFR) and Koala Shores, both
Slide 10: Reconciliation of Statutory Profit to Underlying Earnings
Reconciliation of Statutory Profit to Underlying Earnings 2.3 FY19 FY18 FY19 statutory net loss primarily impacted by: Depreciation and amortisation $m $m o Increase due to contribution from new acquisitions Statutory net (loss) / profit (7.92) 0.77 Asset revaluations – recorded in the P&L o Goodwil
Slide 11: Financial Performance
Financial Performance 2.4 Net Operating Income (NOI) by Asset Price Increasingly diversified portfolio – reducing asset concentration risk Acquisitions Date ($m) FY18 Lindfield DFR BIG4 Koala Shores Sep-17 10.2 KSH Darwin FreeSpirit Resort Dec-17 19.5 AKV AKV AKV FY19 Highway 1 Tourist Park Oct-18 2
Slide 12: Balance Sheet and Capital Management
Balance Sheet and Capital Management 2.5 Key Metrics FY19 FY18 Strong Financial Capacity for Growth o Balance sheet gearing of 13.3% Property Assets $m 128.0 106.4 o The Group has a $55.0m finance facility that expires in Total Assets $m 141.7 127.9 August 2020. At 30 June 2019, undrawn capacity und
Slide 13: Earnings & Distribution Guidance – FY20
Earnings & Distribution Guidance – FY20 2.6 o FY20 Guidance remains unchanged: FY20 Underlying Earnings Guidance ▪ Underlying Earnings per security expected to be in the $m range of 6.75-7.00 cents - an increase of 31% on FY19 Property net operating income 12.4 • Darwin Freespirit Resort performing
Slide 14: Operational Performance
BIG4 Merimbula Tween Waters Holiday Park, NSW 3 Operational Performance Aspen Karratha Village, WA 14
Slide 15: Operational Performance and Opportunities
Operational Performance and Opportunities 3.1 Four Lanterns Tomago Village Koala Shores Barlings Beach Tween Waters Trading • Land rents continue to • NOI down 12% due to a • Subdued in FY19 after • Performed well in FY19 • Performed reasonably in grow in real terms and deliberate shift to long disa
Slide 16: Operational Performance and Opportunities
Operational Performance and Opportunities 3.2 Adelaide CP Highway One Mandurah Gardens AKV Darwin FSR Trading • Performed reasonably in • Patchy performance • Land rents continue to • Continues to perform very • Performing poorly since FY19 with total since acquisition in grow in real terms and well
Slide 17: Operational Performance and Opportunities
Operational Performance and Opportunities 3.3 We believe there are ample opportunities to increase returns from Aspen’s existing portfolio: o More intensive management o Deployment of capital across: ▪ Cost saving initiatives (eg. labour, power, water) ▪ Refurbishment (eg. landscaping, facilities, c
Slide 18: Portfolio
Darwin FreeSpirit Resort, NT 4 Portfolio Mandurah Gardens Estate, WA 18
Slide 19: Portfolio Summary
Portfolio Summary 4.1 Funds / o Aspen currently has a portfolio of 12 properties valued at Portfolio Aggregates Aspen Group Combined Projects $139m1 Properties (#) 12 3 15 o Aspen manages 3 major projects and earns project management fees Value ($m) $1391 o General traits that Aspen seeks in propert
Slide 20: Portfolio Summary
Portfolio Summary 4.2 Land Area NT (Hectares) Sites Land Area WA (Hectares) Sites PORTFOLIO COMPOSITION BY 11 Darwin FreeSpirit 10.8 467 VALUE 9 Mandurah 6.8 158 10 Karratha Village 2.9 180 11 NT 13% Sydney Basin 40% WA 17% 10 Adelaide Far South Coast 25% NSW 5% Land Area NSW (Hectares) Sites 9 4 2
Slide 21: Portfolio Summary
Portfolio Summary 4.3 New South Wales South Australia WA NT Four Lindfield Lindfield Tomago Koala Barlings Tween Adelaide Highway CREST @ Coorong Mandurah Darwin Rockleigh1 AKV Lanterns Kiah Kalinda Village Shores Beach Waters CP One Woodside1 Quays1 Gardens FSR Sydney Sydney Sydney South South Adel
Slide 22: Portfolio Summary
Portfolio Summary 4.4 Approved Sites Value per Approved Site ($k) 500 250 450 400 200 350 300 150 250 200 150 100 100 50 50 0 0 Land Sites Sites with Dwelling owned by Aspen Value per Hectare ($m) Valuation Cap Rate 30 16% 25 14% 12% 20 10% 15 8% 10 6% 4% 5 2% 0 0% 22
Slide 23: Managed Funds
Alexandrina Cove Lifestyle Village, SA 5 Managed Funds Coorong Quays, SA 23
Slide 24: Funds Managed by Aspen
Funds Managed by Aspen 5.1 Coorong Quays ▪ Upgrades to the facilities continue including a new Coorong Quays Club for residents and visitors ▪ Long term viability of the site has been secured with an agreement to transfer waste water services to Alexandrina Council who will upgrade the facilities, e
Slide 25: Aspen Group Limited: FY19 Statutory Accounts Extract
6 Aspen Group Limited: FY19 Statutory Accounts Extract Residence Design Image: Tomago Village Redevelopment, NSW 25
Slide 26: Statutory Accounts Extract: Statement of Profit and Loss
Statutory Accounts Extract: Statement of Profit and Loss 6.1 2019 2018 $'000 $'000 Continuing Operations Revenue 29,228 21,745 Cost of sales (17,449) (12,418) Gross profit 11,779 9,327 Expenses and other items Corporate overheads (5,821) (5,503) Property depreciation, fair value adjustments and othe
Slide 27: Statutory Accounts Extract: Balance Sheet
Statutory Accounts Extract: Balance Sheet 6.2 2019 2018 $'000 $'000 Assets Current assets Cash and cash equivalents 6,466 13,370 Trade and other receivables 3,913 1,950 Assets classified as held for sale - 4,157 Inventories 2,760 1,566 Total current assets 13,139 21,043 Non-current assets Property,
Slide 28: Statutory Accounts Extract: Cash Flow Statement
Statutory Accounts Extract: Cash Flow Statement 6.3 2019 2018 $’000 $’000 Cash flows from operating activities Receipts from customers (inclusive of GST) 30,098 26,140 Payments to suppliers and employees (inclusive of GST) (26,249) (20,816) Interest received 225 377 Net cash flows from operating act
Slide 29: Statutory Accounts Extract: Segment Information
Statutory Accounts Extract: Segment Information 6.4 Residential / Retirement / Corporate Non-core Other Consolidated Tourism 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Segment revenue 1 20,734 13,665 8,494 8,080 - 1,013 - - 29,228 22
Slide 30: Appendices
7 Appendices BIG4 BIG4Koala KoalaShores ShoresHoliday HolidayPark, Park,NSW NSW 30
Slide 31: Market Conditions
Market Conditions 7.1 Tourism Tourism Sector Overnight Trips and Spend by State – YE Mar 20191 Overall conditions generally weakened in the markets in which Aspen operates over the past year, despite continued growth in tourism demand. o Austrade estimates that in the year to March 2019, overnight s
Slide 32: Market Conditions
Market Conditions 7.2 FY19 Hotel Industry Performance (By City) Adelaide1 Darwin1 o Rooms Sold: -1% (25% decline in international offset by 7% o Rooms Sold: +5% increase in domestic) o Occupancy: -18.3% o Occupancy: -0.2% o ADR: +0.9% o ADR: -1.8% o REVPAR: -17.6% o REVPAR: -1.9% Credit: Tourism Sou
Slide 33: Market Conditions
Market Conditions 7.3 Australia’s Residential Property Market o Prices declined about 5-10% on average and sales volumes fell due to pockets of oversupply, tightening credit conditions, Labor’s proposals to tax the industry more, and other issues. o Sentiment and activity have improved mildly post t
Slide 34: Distribution & Tax History
Distribution & Tax History 7.4 Aspen Group Ltd Aspen Property Trust1 Period / Quarter Total Amount Paid Date Paid Distribution Type Tax Deferred / Ended cents Cps Cps Non assessable income Dec-17 28/02/2017 Ordinary - 2.1 - 2.1 Jun-17 29/08/2017 Ordinary - 2.5 - 2.5 Oct-17 20/10/2017 Special Capital
Slide 35: Disclaimer
Disclaimer This presentation has been prepared by Aspen Group Limited on behalf of Aspen Group Limited and Aspen Property Trust (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any s