Region Group · ASX:RGN
Region — SCA Property Group — FY2014 Earnings Presentation
36 slides from Region's earnings presentation, Aug 20, 2014
Slide 1: SCA Property Group FY14 Results Presentation
For personal use only SCA PROPERTY GROUP FY14 Results Presentation 20 August 2014 Blakes Crossing, SA
Slide 2: Agenda
AGENDA For personal use only 1 Overview of FY14 Results 2 Financial Performance 3 Operational Performance 4 Key Priorities and Outlook 5 Questions 6 Appendices 2
Slide 3: Overview of FY14 Results
For personal use only 1 OVERVIEW OF FY14 RESULTS Anthony Mellowes Chief Executive Officer
Slide 4: FY14 Highlights
FY14 HIGHLIGHTS For personal use only Financial Capital Active Portfolio Performance Management Management $111.6m 32.6% 97.8% 8.6% Statutory net profit after tax 1 Gearing 3 Portfolio occupancy 4 Specialty vacancy 4 $80.4m $1.64 7.83% Distributable earnings 1 NTA per unit 3 Portfolio weighted avera
Slide 5: Key Achievements – Delivering on Strategy
KEY ACHIEVEMENTS – DELIVERING ON STRATEGY For personal use only Specialty Leasing • Specialty vacancy has decreased to 8.6% (from 14.0% in June 2013) (1) • On track to achieve target of less than 5% specialty vacancy by December 2014 On Track Strong • 8.4% pa average sales growth for SCP’s Australia
Slide 6: Financial Performance
For personal use only 2 FINANCIAL PERFORMANCE Mark Fleming Chief Financial Officer
Slide 7: Statutory Profit & Loss
STATUTORY PROFIT & LOSS For the Twelve Months Ended 30 June 2014 For personal use only • Statutory net profit after tax of $111.6m $m FY14 FY13 * Anchor rental income 95.9 41.9 • Anchor rental income includes $0.9m in turnover rent from 8 tenancies Specialty rental income 48.0 17.6 Other income 3.6
Slide 8: Distributable Earnings, FFO, AFFO
DISTRIBUTABLE EARNINGS, FFO, AFFO For the Twelve Months Ended 30 June 2014 For personal use only • Our primary measure for cash earnings is Distributable Earnings, which was $80.4m for the full year period $m FY14 FY13 * Net profit after tax (statutory) 111.6 (4.4) • For the first time, we have also
Slide 9: Balance Sheet
BALANCE SHEET As at 30 June 2014 For personal use only • Reduced cash balance due to focus on cash 30 June 30 June Change management $m 2014 2013 Cash 0.9 15.4 (14.5) • Value of investment properties increased by $152.9m, predominately due to acquisitions and positive Investment properties 1,640.8 1
Slide 10: Capital Management
CAPITAL MANAGEMENT As at 30 June 2014 For personal use only • Gearing of 32.6%(1) is within target range of 30% to 40%. We expect gearing to increase to around 35% by December 2014 30 June 30 June following the completion of the Greystanes development $m 2014 2013 ($16.4m), and settlement of the Cla
Slide 11: Operational Performance
For personal use only 3 OPERATIONAL PERFORMANCE Anthony Mellowes Chief Executive Officer
Slide 12: Portfolio Overview
PORTFOLIO OVERVIEW For personal use only Assets Number of Number of GLA Occupancy Value Weighted average As at 30-Jun-2014 centres specialties (sqm) (% GLA) (A$m) WALE (yrs) cap rate (%) Freestanding 15 4 61,922 99.8% 214.8 16.4 7.78 Neighbourhood 52 533 267,171 97.6% 949.8 12.9 7.89 Sub-regional 6
Slide 13: Active Portfolio Management
ACTIVE PORTFOLIO MANAGEMENT Strengthening our portfolio through acquisitions, developments and divestments For personal use only • The acquisitions and divestments during the period are Woolworths consistent with SCP’s investment criteria and have Portfolio Metrics Acquisitions (1) Developments Disp
Slide 14: Supermarket Sales Growth
SUPERMARKET SALES GROWTH SCP’s Supermarket portfolio continues to grow above market rates For personal use only Australia (12 month MAT sales growth % ) 12.0% • Strong growth from SCP’s supermarket tenants in 9.5% 9.6% (34 Supermarkets) 8.9% both Australia and New Zealand continues (30 Supermarkets)
Slide 15: Turnover Rent
TURNOVER RENT For personal use only • As a result of strong sales growth, some anchor tenants Current Sales as % of Turnover Threshold (1) are achieving turnover rent thresholds 2 Supermarkets • Once turnover rent thresholds are achieved, rental 6 Supermarkets income increases with store sales growt
Slide 16: Speciality Leasing - Progress
SPECIALITY LEASING - PROGRESS We remain committed to achieving normalised occupancy levels prior to the expiry of the Woolworths Rental Guarantee For personal use only • Our specialty vacancy stands at 8.6% of specialty GLA (1) • During the six months to 30 June 2014, we agreed terms Specialty Vacan
Slide 17: Specialty Leasing Strategy
SPECIALTY LEASING STRATEGY Three centres account for around 37% of our specialty vacancy For personal use only Specialty Vacancy Across the Portfolio (% of GLA) 19.2% • Solid progress made at Mt Gambier and Lilydale, with several larger tenancies leased during the 6 months to June 2014 Kwinana, 5.3%
Slide 18: Specialty Key Metrics
SPECIALTY KEY METRICS For personal use only Specialty sales performance • Specialty sales continue to grow strongly across the September December March June portfolio, driven mainly by non-discretionary spend 2013 2013 2014 2014 Specialty sales growth • The performance reflects the location of our c
Slide 19: Indicative Development Pipeline
INDICATIVE DEVELOPMENT PIPELINE * We have identified over $100m of development opportunities at 17 of our centres over the next 5 years For personal use only Development Type Centre (s) Estimated Capital Investment (A$m) FY15 FY16 FY17 FY18 FY19 Centre refurbishment Lismore (committed) 7.5 Stage 3 (
Slide 20: Key Priorities and Outlook
For personal use only 4 KEY PRIORITIES AND OUTLOOK Anthony Mellowes Chief Executive Officer
Slide 21: Core Strategy
CORE STRATEGY Defensive, resilient cashflows to support secure distributions For personal use only Focus on convenience- Weighted to non-discretionary Long leases to quality anchor based retail centres retail segment tenants Appropriate capital Growth structure opportunities 21
Slide 22: Potential Earnings Growth Trends
POTENTIAL EARNINGS GROWTH TRENDS Solid earnings growth expected over time For personal use only Indicative Contribution to Distributable Earnings Growth Rate Description and Assumptions (% pa) Longer Near Term (FY14 - FY17) Term (FY18 +) • Anchor rental income represents about 60% of overall gross p
Slide 23: Key Priorities and Outlook
KEY PRIORITIES AND OUTLOOK For personal use only Specialty Leasing • On track to achieve specialty vacancy of below 5% by December 2014 Remains Key Priority • Leasing incentives may increase in FY15, and skew toward fitout contributions. These will increasingly become the responsibility of SCP (rath
Slide 24: Questions
For personal use only 5 QUESTIONS
Slide 25: Appendices
For personal use only 6 APPENDICES
Slide 26: SCP Has Delivered Superior Returns to Unitholders
SCP HAS DELIVERED SUPERIOR RETURNS TO UNITHOLDERS For personal use only FY14 total return • SCP has provided stable and secure distributions that have been supplemented by strong share price 20.0% performance during FY14 and since IPO 16.0% 12.0% 4.3% • SCP delivered a total unitholder return of 15.
Slide 27: Long Term Leases to Woolworths and Wesfarmers Group
LONG TERM LEASES TO WOOLWORTHS AND WESFARMERS GROUP For personal use only Portfolio Lease Expiry Profile 30-Jun-2014 Wale (Years) • 61% of gross rent generated by Woolworths, and Portfolio WALE 13.5 Wesfarmers Group subsidiaries (on a fully leased basis) Anchor WALE 16.9 • 14 year portfolio WALE com
Slide 28: Investment Properties Value
INVESTMENT PROPERTIES VALUE For personal use only 1,800 1,700 30.1 (75.7) 8.9 162.4 17.7 1,640.8 9.5 1,600 1,487.9 1,500 A$m 1,400 1,300 1,200 30 June 2013 Acquisitions WIP Fair Value Divestments Straight lining & capex FX 30 June 2014 • Acquisitions include the Tasmania acquisition ($117.8m excludi
Slide 29: Debt Facilities & Hedging
DEBT FACILITIES & HEDGING For personal use only Debt Facilities as at 30-Jun-2014 Facility Limit Drawn Debt Maturity $m (A$m) (A$m) Bank bilateral 150.0 145.0 11-Dec-16 Bank bilateral 75.0 75.0 20-Nov-17 Bank bilateral 75.0 75.0 11-Dec-17 Bank bilateral (1) 75.0 75.0 11-Dec-17 Bank bilateral 150.0 1
Slide 30: Acquisitions During the Period
ACQUISITIONS DURING THE PERIOD Twelve months to 30 June 2014 For personal use only Specialty Total purchase Completion Anchor Total GLA % GLA Acquisition Centre type GLA price date GLA (sqm) (sqm) commited Cap rate (sqm) ($m) Woolworths Completed Centres (1) Lilydale, VIC Neighbourhood Jul-2013 12,7
Slide 31: Divestments During the Period
DIVESTMENTS DURING THE PERIOD Twelve months to 30 June 2014 For personal use only Specialty Completion Anchor Total GLA % GLA Total sale Divestment Centre type GLA date GLA (sqm) (sqm) commited price ($m) Cap rate (sqm) Divested Properties Emerald Park, VIC Freestanding Nov-2013 2,915 - 2,915 100.0%
Slide 32: Portfolio List
PORTFOLIO LIST For personal use only Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-14 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) Completed Portfolio Australia Lilydale VIC Sub-Regional Jul-13 22,071 98% 53 14.6 7.50% 81.5 Pake
Slide 33: Portfolio List (continued)
PORTFOLIO LIST (CONTINUED) For personal use only Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-14 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) Completed Portfolio Australia Ayr QLD Neighbourhood Jan-00 5,513 99% 9 10.1 8.00% 18.
Slide 34: Portfolio List (continued)
PORTFOLIO LIST (CONTINUED) For personal use only Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-14 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) Completed Portfolio New Zealand Kelvin Grove NZ Neighbourhood Jun-12 3,611 100% 5 16.
Slide 35: Management Team
MANAGEMENT TEAM For personal use only Anthony Mellowes, Chief Executive Officer • Mr Mellowes is an experienced property executive. Prior to joining SCA Property Group, Mr Mellowes was employed by Woolworths since 2002 and held a number of senior property related roles including Head of Asset Manage
Slide 36: SCA Property Group
SCA Property Group For personal use only Level 5, 50 Pitt Street Sydney NSW 2000 Tel: (02) 8243 4900 Fax: (02) 8243 4999 www.scaproperty.com.au Disclaimer This presentation has been prepared by Shopping Centres Australasia Property Group RE Limited (ABN 47 158 809 851) (SCPRE) as responsible entity