Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2008 Earnings Presentation
46 slides from Charter Hall's earnings presentation, Feb 26, 2008
Slide 1: First Half FY08 Results
‘Half vam re FY08 26 February 2008
Slide 2: Agenda
Agenda For personal use only • Highlights and Outlook • Financial Summary • Business Review • Summary CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 2
Slide 3: Highlights and Outlook
Highlights and Outlook For personal use only • Strong financial result – Underlying NPAT $26.5 million – up 64% on pcp – Underlying EPS 6.32cps – up 35% on pcp – NTA of $1.18 – up 6 cents since 30 June 2007 – Group gearing 29% CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 3
Slide 4: Highlights and Outlook
Highlights and Outlook For personal use only • 32% growth in FUM from $2.8 billion to $3.7 billion over 1H FY08 – $544 million growth in wholesale FUM – $309 million growth in retail FUM – Successful raising of Charter Hall Umbrella Fund – nearly 2 times subscribed – Continued strong outperformance
Slide 5: Highlights and Outlook
Highlights and Outlook For personal use only • Charter Hall has a solid outlook to grow funds under management – Acquisition capacity of $1.3 billion in addition to development pipeline – Charter Hall is well positioned to capitalise on emerging opportunities in current environment – Low geared, qua
Slide 6: Highlights and Outlook
Highlights and Outlook For personal use only 1H FY08 1H FY07 Change NPAT (AIFRS) $46.5m $16.3m +186% EPS (AIFRS) 11.09c 4.69c +136% Underlying NPAT1 $26.5m $16.2m +64% Underlying EPS 6.32c 4.67c +35% DPS 6.30c 4.77c +32% As at 31 Dec 07 As at 30 Jun 07 Change FUM2 $3.7bn $2.8bn +32% Total Group Asse
Slide 7: Financial Results
inanci: ae | Financial Results Capital Management -Earnings Composition
Slide 8: Income Statement
Income Statement For personal use only $’000 1H FY08 1H FY07 % change Notes: Financial Direct net property income 4,525 5,512 1. Investments in Charter Results Hall managed funds. Investment income1 14,855 5,766 2. Includes share in profit from investments in Other trust income 270 30 CIP, CHOF4 and
Slide 9: Underlying Earnings Reconciliation
Underlying Earnings Reconciliation For personal use only Financial $’000 1H FY08 1H FY07 Results NPAT (AIFRS) 46,482 16,257 Gains on sale of investments (7,387) - Fair value adjustments1 (14,378) (511) Amortisation of lease incentives 213 - Capital Straight lining during rent free period 216 - Manag
Slide 10: Balance Sheet
Balance Sheet For personal use only Financial $m 31 Dec 07 30 Jun 07 % change Results Direct property 485.7 430.7 Investments in funds 183.8 142.9 Other investments 52.3 7.8 Cash, receivables and other assets 82.0 69.0 Capital Management Total Assets 803.8 650.4 +24% Borrowings 263.1 158.6 Other Lia
Slide 11: Capital Management
Capital Management For personal use only Financial Key Metrics 31 Dec 07 Results Debt balance (net of $37m cash) $226m Gearing1 29% ‘Look through’ gearing2 40% Capital Interest cover3 3.8x Management Debt maturity 2.5yrs Portion of net debt hedged 79% Weighted average interest hedge duration 6.6yrs
Slide 12: Capital Management
Capital Management For personal use only Group gearing of 29% Financial Results Group Total Assets $767m Funded by equity and liabilities $767m (net of cash) (net of cash) Capital Management Earnings Composition CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 12
Slide 13: Group Earnings Composition
Group Earnings Composition For personal use only Strong growth in annuity style revenue Financial Results Annuity income +77% Capital Management Earnings Composition CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 13
Slide 14: Group Earnings Composition: Revenue Breakdown
Group Earnings Composition For personal use only Group Revenue Breakdown Financial Results 1H FY08 Group Revenue $47.7m 1H FY07 Group Revenue $22.5m Capital Management Earnings Composition CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 14
Slide 15: Funds Management Revenue
Group Earnings Composition For personal use only Funds Management Revenue Financial Results 1H FY08 FM-Services $8.7m 1H FY08 FM-Performance $5.6m Capital Management Earnings Composition Notes: 1. Includes funds management fees and property management fees from Wholesale Core Plus Funds. 2. Includes
Slide 16: Corporate vs Trust Split
Group Earnings Composition For personal use only Corporate vs Trust Split Financial Results 1H FY08 EBITDA $32.0m1 1H FY07 EBITDA $17.2m1 Capital Management Earnings Composition Note: Note: 1. Excludes gains on sale of assets. 1. Excludes gains on sale of assets. CHARTER HALL GROUP. FIRST HALF FY 08
Slide 17: Business Review: Investment, Retail FM, Wholesale FM, Development
» Bea iw Investment : Retail FM -Wholesale FM - Development
Slide 18: CHPT Investments
Investment For personal use only CHPT Investments Investment Weighted average Investment Investment Investment % Change cap rate 31 Dec 07 30 Jun 07 Direct Properties 6.89% $485m $431m +13% CPOF 6.38% $114m $80m +43% CPIF 6.91% $47m $46m +2% Retail FM DPF 6.99% $20m $5m +300% Total/average 6.80% $66
Slide 19: CHPT Investment Portfolio Metrics
Investment For personal use only CHPT Investment Portfolio Metrics Investment Asset Diversification (by value) Geographical Diversification (by value) Retail FM Wholesale FM Weighted Average Lease Expiry (by income) Sector Diversification (by net income) Development Note: Bracketed number indicates
Slide 20: Retail Funds Management
Retail Funds Management For personal use only Retail and listed funds under 31 Dec Total FUM 30 Jun Total FUM % change Investment management CHIFs $122m $122m 0% DPF $242m $123m +97% CHUF $187m n/a n/a Retail FM CHPT (listed) $598m $571m +5% Total $1,149m $816m +41% Note: Completed basis • Successfu
Slide 21: Wholesale Funds Management
Wholesale Funds Management For personal use only Charter Hall manages: Investment – 2 core-plus wholesale funds (CPOF and CPIF) – 2 opportunity funds (CHOF4 and CHOF5) • Currently raising capital for Charter Hall Core Plus Retail Fund (CPRF) Retail FM • Core plus funds open ended with liquidity revi
Slide 22: Core Plus Retail Fund Update
Wholesale Funds Management For personal use only Core Plus Retail Fund Update Investment – Target equity raising $350m, minimum raising $250 million – 17 assets across Australia and NZ with WALE 9.7yrs – Top 4 tenants Bunnings, Harvey Norman, Coles and Woolworths (65% of anchor income) Retail FM – S
Slide 23: Core Plus Funds
Wholesale Funds Management For personal use only Core Plus Funds Investment Core Plus Office Fund Core Plus Industrial Fund FUM • $1,414m • $304m (completed basis) • 150 Queen St, Melbourne $31m • Eagle Farm/Meeandah, Brisbane 21.2m Retail FM • Monash Uni Office Buildings, • Laverton/Derrimut, Melbo
Slide 24: Opportunity Funds
Wholesale Funds Management For personal use only Opportunity Funds Charter Hall Opportunity Fund 4 Charter Hall Opportunity Fund 5 Projects acquired in 1H FY08 Projects acquired in 1H FY08 • Gepps Cross Bulky Goods Site, Adelaide • Nelson Park & Whakatu Bulky Goods Sites, NZ • Pier & Nash St Office
Slide 25: Wholesale FUM increased from $2.0 billion to $2.5 billion
Wholesale Funds Management For personal use only Wholesale FUM increased from $2.0 billion to $2.5 billion over 1H FY08 Investment Wholesale funds under 31 Dec Total FUM 30 Jun Total FUM % change management CPOF $1,414m $999m +42% CPIF $304m $280m +9% Retail FM PDP 3 $160m $258m -38% CHOF 4 $482m $4
Slide 26: Remaining acquisition capacity in existing managed funds
Wholesale Funds Management For personal use only Remaining acquisition capacity in existing managed funds of around $1.3bn Investment Fund FUM at 31 Dec 07 Additional Acquisition Capacity CPOF $1,414m $200m1 CPIF $304m $361m Retail FM PDP 3 $160m $0m CHOF 4 $482m $66m CHOF 5 $155m $653m Total $2,515
Slide 27: Development: CIP
Development For personal use only CIP Investment • Business model characterised as: – Predominantly industrial pre-lease development business – Low equity intensive/high ROE business model Retail FM • CIP 1H FY08 Profit $9.2 million (Charter Hall share $4.6 million) • 212,300m2 of pre leased propert
Slide 28: Opportunity Funds Pipeline
Development For personal use only Opportunity Funds Pipeline Investment • Total development projects and existing pipeline of $1.4 billion – $797 million of this is existing projects, which are included in current total FUM of $3.7 billion1 – $569 million of existing pipeline not yet included in cur
Slide 29: For personal use only
For personal use only 29
Slide 30: Summary
Summary For personal use only • Maintained high underlying EPS growth • Well capitalised business model across all funds • Undrawn equity commitments within CHOFs, CPOF, CPIF and CHUF • Development expertise and pipeline to drive value creation across Charter Hall managed assets • Substantial capaci
Slide 31: Appendix
For personal use only 31
Slide 32: Capital Management
Capital Management For personal use only • Charter Hall Group debt maturity profile 2.5 years (evergreen facility) • Group gearing 29% • Look-through gearing 40% Entity Drawn CHC Total Gearing Remaining Interest rate Average Average balance co-investment Assets debt hedged hedged hedged duration % t
Slide 33: CPOF Update: Weighted Average Lease Expiry
CPOF Update For personal use only Weighted Average Lease Expiry Note: * Based on forecast lease commitment on completion of the development. CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 33
Slide 34: CPOF Update: Diversification
CPOF Update For personal use only Asset Diversification (by acquisition price on a fully invested basis) Geographical Diversification (by acquisition price on a fully invested basis) CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 34
Slide 35: Sample of CPOF Property Portfolio
Sample of CPOF Property Portfolio For personal use only ONE30 Stirling St, Perth WA 275 George St and 150 Queen St, Melbourne Vic Atrium, Pyrmont NSW Northbank Plaza, Brisbane QLD 333 George St, 11 Exhibition St, 225 St Georges Tce, 34 Hunter St, Sydney NSW Alluvion, Perth WA Sydney NSW Melbourne Vi
Slide 36: CPIF Update: Weighted Average Lease Expiry
CPIF Update For personal use only Weighted Average Lease Expiry CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 36
Slide 37: CPIF Update: Diversification
CPIF Update For personal use only Asset Diversification (by acquisition price on a fully invested basis) Geographical Diversification (by acquisition price on a fully invested basis) CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 37
Slide 38: Sample of CPIF Property Portfolio
Sample of CPIF Property Portfolio For personal use only 22-26 Compark Circ, 200 Holt St, Pinkenba QLD 123 Kewdale Rd, Kewdale WA Coles Distribution Centre, Mulgrave Vic Perth Airport WA 776 Boundary rd, 160 Robinson Rd, Geebung QLD 140-150 Robinson Rd, Geebung QLD Richlands QLD 7 Viola Pl, Brisbane
Slide 39: CPRF Update: Lease Expiry and Diversification
CPRF Update For personal use only Weighted Average Lease Expiry Asset Diversification CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 39
Slide 40: CPRF Update: Geographical and Tenancy Diversification
CPRF Update For personal use only Geographical Diversification (by acquisition price) Tenancy Structure (by net income) Tenancy Structure (by grouping) CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 40
Slide 41: Sample of CPRF Property Portfolio
Sample of CPRF Property Portfolio For personal use only Home HQ Rothwell QLD Home HQ, Ipswich QLD Redcliffe Plaza, Redcliffe Q:D Foodtown, Auckland NZ Menai Central, Menai NSW Bunnings Australian Portfolio (8 assets) CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 41
Slide 42: DPF Update: Weighted Average Lease Expiry
DPF Update For personal use only Weighted Average Lease Expiry CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 42
Slide 43: DPF Update: Diversification
DPF Update For personal use only Assets Diversification (by current value) Sector Diversification (by current value) Geographical Diversification (by acquisition price) CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 43
Slide 44: Sample of DPF Property Portfolio
Sample of DPF Property Portfolio For personal use only 22-26 Compark Circ, Mulgrave Vic 150 Queen St, Melbourne Vic 181 St Georges 615-619 Maroondah Hwy, Tce, Perth WA Mitcham Vic 385 St Pauls Tce, Brisbane QLD 420 Princes Hwy, Corio Vic Tullamarine, Vic 400 Kent St, Sydney NSW CHARTER HALL GROUP. F
Slide 45: Sample of CHOF Projects
Sample of CHOF Projects For personal use only 275 George St and Northbank Plaza, Alluvion, Perth WA Home HQ Artarmon, NSW Brisbane QLD 186-206 Pier & Nash St, Perth WA Whakatu Site, Hastings NZ Little Bay, NSW CHARTER HALL GROUP. FIRST HALF FY 08 RESULTS 45
Slide 46: For personal use only
For personal use only 46