Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — FY2014 Earnings Presentation
48 slides from Growthpoint Properties Australia's earnings presentation, Aug 18, 2014
Slide 1: Annual Results Presentation for the year ended 30 June 2014
OFFICE PORTFOLIO: 1 CHARLES STREET, PARRAMATTA, NSW GROWTHPOINT PROPERTIES AUSTRALIA (ASX CODE: GOZ) For personal use only ANNUAL RESULTS PRESENTATION for the year ended 30 June 2014 18 August 2014 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 3
Slide 2: Important Information and Disclaimer
IMPORTANT INFORMATION DISCLAIMER rules and regulations of the U.S. Securities and Exchange Commission. Forward-looking statements including projections, indications or guidance This presentation and its appendices (“Presentation”) is dated 18 August Investors should also be aware that certain financ
Slide 3: Contents
CONTENTS EXECUTIVE FY14 OVERVIEW 4 DETAILED FINANCIAL RESULTS 28 MANAGEMENT TEAM For personal use only Key results for FY14 5 Financial results 29 GOZ’s journey 8 Movements in Net tangible assets 30 STRATEGY & PERFORMANCE 9 Debt management 31 Key achievements for FY10 to FY14 10 Operating expenses 3
Slide 4: FY14 Overview
For personal use only FY14 OVERVIEW Timothy Collyer Managing Director INDUSTRIAL PORTFOLIO: 27-49 LENORE DRIVE, ERSKINE PARK, NSW
Slide 5: Key results for FY14: Strategy & Performance
KEY RESULTS FOR FY14 STRATEGY & PERFORMANCE For personal use only 18.6%p.a. 10.8% TOTAL SECURITYHOLDER RETURN FY14 TOTAL for 5 years to 30 June 20141 SECURITYHOLDER RETURN1 $331.5m 20.0cps NEW EQUITY RAISED FY14 EARNINGS during FY14– largest year to date at top of guidance range 132nd 15th LARGEST E
Slide 6: Key results for FY14: Property
KEY RESULTS FOR FY14 PROPERTY For personal use only OVER PROPERTY PORTFOLIO VALUED AT 124,000m2 $2.1B OF NEW AND EXTENDED LEASING DURING FY14 as at 30 June 2014 Out of a 1,036,740m2 portfolio $345.1m 6.9yrs WALE OF PROPERTY ACQUIRED DURING FY14 up from 6.8 years at 30 June 2013 Largest year to date
Slide 7: Key results for FY14: Financial Management
KEY RESULTS FOR FY14 FINANCIAL MANAGEMENT For personal use only FY14 DISTRIBUTION INCREASE GUIDANCE OF IN NTA 19.0cps 8% ACHIEVED OVER FY14 TO $2.16 GEARING FY14 RETURN REDUCED TO ON EQUITY (ROE) 40.9% 17.5% Investment grade rating issued by Moody’s INDUSTRIAL PORTFOLIO: 10 GASSMAN DRIVE, YATALA, QL
Slide 8: GOZ's Journey
GOZ’S JOURNEY 20141 For personal use only $2.1B $399m in property assets Freefloat 50% industrial / Growing distributions, 20091 50% office quality tenants 6.9yrs Internally managed with low management $650m $113m WALE expenses and no funds management fees to in property assets Market Capitalisation
Slide 9: Strategy & Performance
INDUSTRIAL PORTFFOLIO: For personal use only 120-132 ATLANTIC DRIVE, KEYSBOROUGH, VIC STRATEGY & PERFORMANCE Aaron Hockly Company Secretary & General Counsel
Slide 10: Key Achievements for the Five Years to June 2014
KEY ACHIEVEMENTS FOR THE FIVE YEARS TO 30 JUNE 2014 For personal use only WHAT WE SAID WE WOULD DO WHAT WE ACHIEVED STATUS Increase distributions to Distributions have increased steadily each year from 14.0 cents for FY10 Securityholders to 19.0 cents for FY14 (35.7% growth) with 19.7 cents forecast
Slide 11: Key Achievements for the Five Years to June 2014 (continued)
KEY ACHIEVEMENTS FOR THE FIVE YEARS TO 30 JUNE 2014 (continued) For personal use only WHAT WE SAID WE WOULD DO WHAT WE ACHIEVED STATUS Increase freefloat 2009: freefloat $27 million or 27%2 2014: freefloat $399 million, or 31%, making GOZ the 205th ASX listed entity by freefloat3 Inclusion in the GO
Slide 12: Key Achievements for the Five Years to June 2014 (continued)
KEY ACHIEVEMENTS FOR THE FIVE YEARS TO 30 JUNE 2014 (continued) For personal use only WHAT WE SAID WE WOULD DO WHAT WE ACHIEVED STATUS Expand property portfolio Acquired 31 properties worth over $1.3 billion over five years to 30 June 2014 Diversify property portfolio by 2009: 28 industrial properti
Slide 13: Key Strategies
KEY STRATEGIES For personal use only 1 Increase distributions to securityholders 2 Keep growing where opportunities are available 3 Focus on property fundamentals first 4 Continue as a “pure landlord” 5 Maintain simple and transparent business INDUSTRIAL PORTFOLIO: 51-65 LENORE DRIVE, ERSKINE PARK,
Slide 14: Equity Capital
EQUITY CAPITAL MARKET CAPITALISATION AND FREEFLOAT1 HISTORICAL LIQUIDITY ANALYSIS For personal use only $1,400m GRT HOLDING 80% GRT HOLDING $90m 36% $1,200m 75% VALUE TRADED/FREEFLOAT1 FREEFLOAT $80m 34% $1,000m 70% $70m 32% VALUE TRADED $800m 65% $60m 30% $600m 60% $50m 28% $400m 55% $40m 26% $200m
Slide 15: Distributions & Security Price
DISTRIBUTIONS & SECURITY PRICE For personal use only DISTRIBUTIONS SECURITY PRICE PER STAPLED SECURITY AS AT 30 JUNE AS AT 30 JUNE 20¢ $2.40 $2.30 18¢ $2.20 $2.10 16¢ $2.00 $1.90 14¢ $1.80 12¢ $1.70 $1.60 10¢ $1.50 FY10 FY11 FY12 FY13 FY14 FY15 1 2010 2011 2012 2013 2014 14.0¢ 17.1¢ 17.6¢ 18.3¢ 19.0
Slide 16: GOZ Returns FY10-FY14
GOZ RETURNS FY10-FY14 TOTAL RETURN COMPARISION OVER ONE YEAR TOTAL RETURN COMPARISION OVER FIVE YEARS TO 30 JUNE 20141 PER ANNUM, TO 30 JUNE 20141 For personal use only 20% 20% 18% 18% 16% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0 0 GOZ A-REIT2 SHARES3 GOVT CASH5 GOZ A-REIT2 SHARES3 GOVT
Slide 17: Relative Forecast Income Yields
RELATIVE FORECAST INCOME YIELDS TO 30 JUNE 2014 For personal use only 10% 8% 6% 4% 2% 0 GOZ A-REIT AUSTRALIAN COMMONWEALTH INFLATION5 DISTRIBUTION DISTRIBUTION SHARES GOVERNMENT YIELD1 YIELD2 DIVIDEND 10 YEAR BOND4 YIELD3 8.0% 5.2% 4.8% 3.5% 3.0% 1. FY15 distribution yield based on 30 June 2014 clos
Slide 18: Strategy & Performance Summary
STRATEGY & PERFORMANCE SUMMARY For personal use only 1 Established 5 year track record of growth, distributions and execution of communicated strategy 2 High comparative historical and forecast returns 3 Significant increase in freefloat and liquidity 4 S&P/ASX 300 index inclusion expected soon (bas
Slide 19: Property Portfolio
INDUSTRIAL PORTFOLIO: 120 NORTHCORP BOULEVARD, BROADMEADOWS, VIC For personal use only PROPERTY PORTFOLIO Michael Green Head of Property
Slide 20: Property Portfolio Overview
PROPERTY PORTFOLIO OVERVIEW For personal use only SECTOR DIVERSITY (%) TOP TEN TENANTS BY MARKET VALUE, AS AT 30 JUNE BY PASSING RENT, AS AT 30 JUNE 2014 % WALE 2009 WOOLWORTHS 24% 8.1yrs INDUSTRIAL 100% NSW POLICE 10% 9.9yrs GE CAPITAL FINANCE AUSTRALASIA 6% 3.7yrs 2014 LINFOX 5% 8.9yrs INDUSTRIAL
Slide 21: Property Portfolio Leasing
PROPERTY PORTFOLIO LEASING For personal use only ›› 124,095m2 of leasing completed in FY14 LEASE EXPIRY PROFILE (details in Appendix 4) AS AT 30 JUNE 2014 20% ›› Significant leases included Downer EDI 15% 13%1 Mining, Peabody Energy Australia and 10% 9%1 Paper Australia 6% 1 5% 4%1 ›› Focussed on up
Slide 22: Property Portfolio Key Metrics
PROPERTY PORTFOLIO KEY METRICS AS AT 30 JUNE 2014 For personal use only INDUSTRIAL OFFICE TOTAL NO. OF PROPERTIES 35 16 51 TOTAL / AVERAGE VALUE $1,043.9m / $29.8m $1,049.8m / $65.5m $2,093.7m / $41.1m % OF PORTFOLIO VALUE 50% 50% 100% TOTAL / AVERAGE LETTABLE AREA 857,565m2 / 24,502m2 179,175m2 / 1
Slide 23: Office Acquisitions for FY14
OFFICE ACQUISITIONS FOR FY14 For personal use only 1 CHARLES STREET, PROPERTY KEY METRICS PARRAMATTA, NSW The property comprises a prominent $241.1m PURCHASE PRICE A-grade commercial office building of 32,000m2 and 444 car spaces consisting As at purchase on 30 June 2014 of two inter-connecting towe
Slide 24: Industrial Acquisitions for FY14
INDUSTRIAL ACQUISITIONS FOR FY14 For personal use only 213-215 ROBINSONS RD, 120-132 ATLANTIC DR, 9-11 DRAKE BLVD, 19&20 SOUTHERN CRT, 99-103 WILLIAM ANGLISS RAVENHALL, VIC KEYSBOROUGH, VIC ALTONA, VIC KEYSBOROUGH, VIC3 DR, LAVERTON NTH, VIC A high spec distribution and A high spec distribution Thre
Slide 25: The Brisbane Office Market
THE BRISBANE OFFICE MARKET For personal use only Current Brisbane office market vacancy rates: at 14.7%1 in the CBD and 12.2%1 in the fringe. Exposure to the Brisbane office market: six modern office buildings totalling 67,175m2 with a combined WALE of 5.5 years. Growthpoint’s actions: undertaken 18
Slide 26: Portfolio Development and Expansion Potential
PORTFOLIO DEVELOPMENT AND EXPANSION POTENTIAL For personal use only POTENTIAL ADDITIONAL ON-COMPLETION PROPERTY SECTOR DEVELOPMENT TYPE STATUS LETTABLE AREA VALUE (APPROX) Woolworths Distribution Centres Industrial Potential expansion Future potential moving (6 properties) 30% site coverage ratio to
Slide 27: Property Portfolio Summary
PROPERTY PORTFOLIO SUMMARY For personal use only 1 Portfolio in excellent shape across all key metrics 2 Portfolio enhanced by FY14 acquisitions - most acquisitions of any year to date 3 Potential upside from development 4 Significant leasing done but challenges remain OFFICE PORTFOLIO: 333 ANN STRE
Slide 28: Detailed Financial Results
OFFICE PORTFOLIO: BUILDING C, GORE HILL TECHNOLOGY PARK, 219-247 PACIFIC HIGHWAY, ARTARMON, NSW For personal use only DETAILED FINANCIAL RESULTS Dion Andrews Chief Financial Officer
Slide 29: Financial Results
FINANCIAL RESULTS For personal use only FY2014 FY2013 CHANGE % CHANGE STATUTORY ACCOUNTING PROFIT ($'000) 117,348 93,956 23,392 24.9 STATUTORY ACCOUNTING PROFIT PER SECURITY (¢) 25.7 23.7 2.0 8.6 DISTRIBUTABLE INCOME ($'000) 91,069 76,423 14,646 19.2 DISTRIBUTABLE INCOME PER SECURITY (¢) 20.0 19.3 0
Slide 30: Movements in Net Tangible Assets
MOVEMENTS IN NET TANGIBLE ASSETS PER STAPLED SECURITY For personal use only $2.18 $2.16 $2.14 $2.12 $2.10 $2.08 $2.06 $2.04 $2.02 $2.00 $1.98 30 JUNE PROPERTY SWAP EQUITY RAISING 30 JUNE 2013 VALUATIONS REVALUATIONS AND RETAINED 2014 EARNINGS $2.00 +4.4¢ -0.5¢ +12.1¢ $2.16 INDUSTRIAL PORTFOLIO: 99-1
Slide 31: Debt Management: Gearing
DEBT MANAGEMENT GEARING For personal use only REDUCTION IN GEARING AND COST OF DEBT AS AT 30 JUNE 75% 9.0% 70% 8.5% BALANCE SHEET GEARING ALL-IN COST OF DEBT 65% 8.0% 60% 7.5% 55% 7.0% 50% 6.5% 45% 6.0% 40% 5.5% 35% 5.0% 30% 4.5% 2009 2010 2011 2012 2013 2014 Balance sheet gearing 75.4% 53.8% 56.1%
Slide 32: Debt Management: Interest Rate Hedging
DEBT MANAGEMENT INTEREST RATE HEDGING For personal use only HEDGING MATURITY PROFILE $250m 4.50% $200m 4.30% $150m 4.10% $100m 3.90% $50m 3.70% 0 3.50% 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 Nominal value of hedging expiring $40m - - $60m $205m $160m $50m - $200m Weighted average interest rate
Slide 33: Operating Expenses
OPERATING EXPENSES For personal use only OPERATING EXPENSES FY2014 FY2013 FY2012 Total operating expenses ($’000) 8,4981 6,431 5,551 Average gross asset value ($’000) 1,810,053 1,662,816 1,368,255 OPERATING EXPENSES TO AVERAGE GROSS ASSETS (%) 0.47% 0.39% 0.41% ›› Operating expenses or MER is foreca
Slide 34: Financial Results Summary
FINANCIAL RESULTS SUMMARY For personal use only 1 FY14 guidance achieved 2 FY15 guidance of 19.7cps provided 3 Gearing reduced to 40.9% 4 Investment grade rating issued and banking facilities have been restructured to allow capital markets issue INDUSTRIAL PORTFOLIO: 28 BILSTON DRIVE, WODONGA, VIC G
Slide 35: Conclusion
OFFICE PORTFOLIO: 89 CAMBRIDGE PARK DRIVE, CAMBRIDGE, TAS For personal use only CONCLUSION
Slide 36: Focus for the Year Ahead
FOCUS FOR THE YEAR AHEAD For personal use only STRATEGY & PERFORMANCE ›› Likely S&P/ASX 300 Index inclusion soon ›› Continue to grow distributions ›› Continue to seek accretive acquisitions to continue to increase trading volumes, improve portfolio, secure and improve distributions and deploy cheape
Slide 37: Appendices
For personal use only APPENDICES INDUSTRIAL PORTFOLIO: 45-55 SOUTH CENTRE ROAD, MELBOURNE AIRPORT, VIC
Slide 38: Growthpoint Properties Limited (GRT) - South Africa
APPENDIX 1 GROWTHPOINT PROPERTIES LIMITED (GRT) - SOUTH AFRICA1 For personal use only ›› GRT owns 64.0% of the securities of GOZ (at 30 June 2014) KEY FACTS and is its major securityholder LISTING GRT is listed on the Johannesburg Stock Exchange (JSE) ›› GRT first invested in GOZ in August 2009. GRT
Slide 39: Securityholder Calendar
APPENDIX 2 SECURITYHOLDER SECURITYHOLDER CALENDAR CALENDAR* 2014 For personal use only 29 August 26 November Distribution paid for the half year ended Annual General 30 June 2014 Meeting (to be held in Annual Tax Statement for year ended 30 June 2014 Melbourne) mailed FY14 report sent to Securityhol
Slide 40: Board of Directors
APPENDIX 3 BOARD OF DIRECTORS LYN SHADDOCK TIMOTHY COLLYER GEOFFREY For personal use only FAPI, KSS B.BUS (PROP), GRAD DIP FIN & INV, TOMLINSON AAPI, F FIN, MAICD BEC Independent Chairman (to 30 June 2014) and Director Appointed as a Director on 5 August 2009, will retire on Managing Director Indepe
Slide 41: Board of Directors (continued)
APPENDIX 3 BOARD OF DIRECTORS (continued) For personal use only MAXINE BRENNER ESTIENNE DE KLERK GRANT JACKSON FRANCOIS MARAIS NORBERT SASSE BA, LLB BCOM (INDUSTRIAL PSYCH), BCOM ASSOC. DIP. VALUATIONS, FAPI BCOM, LLB, H DIP (COMPANY LAW) BCOM (HONS) (ACC), CA (SA) (HONS) (MARKETING), BCOM (HONS) In
Slide 42: Executive Management
APPENDIX 3 EXECUTIVE MANAGEMENT MICHAEL GREEN DION ANDREWS AARON HOCKLY For personal use only B.BUS (PROP) B.BUS, FCCA BA, LLB, GDLP, GRADDIPACG, MAPPFIN, FCIS, MAICD, FGIA, Head of Property Chief Financial SAFIN As Head of Property, Officer Michael oversees the Company Secretary Dion is a Chartered
Slide 43: New and Extended Leases
APPENDIX 4 NEW AND EXTENDED LEASES ANNUAL RENT ADDRESS TENANT START DATE TERM (YRS) INCREASES NLA (M²) CAR PARKS For personal use only Industrial 27-49 Lenore Dr Erskine Park NSW Linfox Q1, FY14 10.0 CPI 29,476 149 9-11 Drake Blvd Altona VIC Atlas Specialty Metals Q2, FY14 5.0 Fixed 3.50% 5,481 30 1
Slide 44: Distributable Income Reconciliation
APPENDIX 5 DISTRIBUTABLE INCOME RECONCILIATION FROM STATUTORY PROFIT TO DISTRIBUTABLE INCOME For personal use only 2014 2013 CHANGE CHANGE $’000 $’000 $,000 % PROFIT AFTER TAX 117,348 93,956 23,392 24.9 LESS NON-DISTRIBUTABLE ITEMS: - STRAIGHT LINE ADJUSTMENT TO PROPERTY REVENUE (5,373) (5,769) 396
Slide 45: Distributable Income (continued)
APPENDIX 5 DISTRIBUTABLE INCOME (continued) COMPONENTS OF DISTRIBUTABLE INCOME For personal use only FY14 FY13 CHANGE CHANGE $’000 $’000 $’000 % Property income 172,283 153,870 18,413 12 Property expenses (23,643) (20,474) (3,169) 15 NET PROPERTY INCOME 148,640 133,396 15,244 11 Interest income1 734
Slide 46: Financial Position
APPENDIX 6 FINANCIAL POSITION AS AT 30 JUNE 2014 AS AT 30 JUNE 2013 For personal use only ($’000) ($’000) ASSETS Cash and cash equivalents 21,321 9,405 Investment properties 2,075,893 1,646,915 Other receivables - 20,951 Other assets 31,565 3,127 TOTAL ASSETS 2,128,779 1,680,398 LIABILITIES Borrowin
Slide 47: Glossary
GLOSSARY ABS Australian Bureau of Statistics NABERS National Australian Built Environment Rating System (a national system for measuring environmental performance of buildings) A-REIT Australian Real Estate Investment Trust For personal use only NTA net tangible assets ANZ Australia and New Zealand
Slide 48: Thank You
INDUSTRIAL PORTFOLIO: 20 SOUTHERN COURT, KEYSBOROUGH, VIC For personal use only THANK YOU For more information contact us at: Email: info@growthpoint.com.au Investor services line: 1800 260 453 www.growthpoint.com.au Growthpoint Properties Australia Level 22, 357 Collins Street Melbourne VIC 3000
Growthpoint Properties Australia — FY2014 Earnings Presentation on 6ix