Slide 1: HY11 Results presentation
For personal use only HY11 Results presentation 22 February 2011 CROMWELL PROPERTY GROUP HY11 RESULTS PAGE 1
Slide 2: Disclaimer
For personal use only Disclaimer This presentation and its appendices (“Presentation”) is Before making an investment decision, investors should as to the currency, accuracy, reliability or completeness dated 22 February 2011 and has been prepared by the consider, with or without a financial or taxa
Slide 3: Contents
Contents For personal use only || Overview 4 || Financial Results 5 || Debt and Capital Management 9 || Property Portfolio & Funds Management 12 || Strategy & Earnings Guidance 20 || Appendices 25 CROMWELL PROPERTY GROUP HY11 RESULTS PAGE 3
Slide 4: Overview
Overview For personal use only || Operating profit of $32.9 million in line with guidance hy11 results p5 in line with || Operating earnings per security of 3.7 cents guidance || Distributions per security of 3.5 cents Disciplined and || Credit approved terms to refinance all FY11 and FY12 debt matu
Slide 5: Key Financial Results
hy11 results Key Financial Results For personal use only 1H11 Actual 1H10 Actual Change Statutory accounting profit (#039;000) 28,916 4,234 + 583% Operating earnings (#039;000) 1 32,867 33,354 – 1% Operating EPS ($) $0.037 $0.047 – 22% Distributions (#039;000) 31,861 28,306 + 13% Distributions per security (
Slide 6: Operating Earnings
hy11 results Operating Earnings For personal use only || Operating earnings of $32.9 million (3.7 cps) || Result underpinned by $32.6 million net contribution from property investment »» 99.1% of operating earnings »» Income from acquisitions offset by higher interest costs »» Some impact from one-o
Slide 7: Statutory Accounting Result
hy11 results Statutory Accounting Result For personal use only || Statutory accounting profit of $28.9 million (3.2 cps) || Fair value reductions of investment properties of $4.7 million (0.3%) reflect minimal change in carrying values || Fair value increase of $4.9 million on interest rate swaps ||
Slide 8: Financial Position
hy11 results Financial Position For personal use only || Significant growth in asset base arising from Dec-10 ($’000) Jun-10 ($’000) the acquisition of three investment properties Assets for approximately $260 million Cash and Cash Equivalents 40,378 98,469 || Acquisition of investment properties fu
Slide 9: Efficient capital management
capital management Efficient capital management For personal use only || Cromwell has not issued capital at significant discounts to NTA || Capital raised has been applied for accretive opportunities Capital Initiatives Since Dec-09 Sources Uses Equity Raising FY10 $73.3m Exhibition Street Acquisiti
Slide 10: Terms agreed for all FY11 & FY12 debt expiries
capital management terms agreed for all FY11 & fy12 debt expiries For personal use only || Credit approved terms for the refinance of: »» $415 million syndicated facility (rollover of existing facility) »» $133 million facility secured by 3 assets (replacing 3 existing facilities) || New facilities
Slide 11: Interest Rate Management
capital management interest rate Management For personal use only || Average margin of 2.05% across all facilities locked in until July 2013 || Expect to maintain ICR at 2.25 times or greater || Weighted average hedge term of 2.0 years || Will look to increase level of FY12 interest rate hedges in n
Slide 12: Continuing Portfolio improvement
portfolio continuing Portfolio improvement For personal use only Transactions over past 3 years || Acquisition of quality office buildings in key markets Acquired Assets Date Price Cap Rate WALT (Sydney, Melbourne, Canberra) Tuggeranong Office Park, ACT Jun-08 $166.0m 8.15% 8.5 yrs || Improvement to
Slide 13: Exhibition Street, Melbourne, VIC
portfolio 321 Exhibition Street, Melbourne, VIC For personal use only || At time of acquisition Cromwell had negotiated a Heads of Agreement for 78% of building from Origin Energy for 10 year term || Cromwell undertaking $25 million refurbishment || Asset is being repositioned to a 5 Star Green Star
Slide 14: Hoppers Crossing distribution centre, VIC
portfolio Hoppers Crossing distribution centre, VIC For personal use only || Purchased in February 2005 leased to Kmart || Kmart vacated the premises in October 2010 || The property was quickly re-leased to Woolworths/Lowes joint venture || Building refurbished and expanded to meet tenants requireme
Slide 15: Qantas Headquarters, Mascot, NSW
portfolio Qantas Headquarters, MASCOT, NSW For personal use only || Cromwell purchased the property from a motivated vendor in August 2010 || Heads of Agreement to enhance the asset and extend lease from 10 to 22 years1 || Cromwell expects to invest further amounts over next 2-3 years to deliver the
Slide 16: Key Portfolio Statistics
portfolio Key portfolio Statistics1 For personal use only || Significant $1.4 billion1 Australian portfolio with strong Sector Diversification1 property fundamentals Commercial 90% »» WALT of 6.0 years1 »» 97.4% occupancy1 Industrial 9% || Improved WALT and occupancy due to acquisitions and Retail/E
Slide 17: Minimal Risk From Lease Expiries
portfolio Minimal Risk From Lease Expiries For personal use only || One of the longest WALT’s in A-REIT sector Lease Expiry Profile – % Gross Income by Financial Year || Average of only 5.4% vacancy/lease expiry in each 60% 57.45% of next 5 financial years || Hoppers Crossing Distribution Centre 100
Slide 18: Portfolio valuations
portfolio valuations For personal use only || Improved WACR of 8.3% reflects improved asset quality Weighted Average Cap Rate by Sector »» 0.1% improvement due to acquisitions Sector Dec-10 Jun-10 »» 0.2% improvement due to revaluations Commercial 8.23% 8.47% || Negatively impacted by Brisbane asset
Slide 19: Secure Income Stream
portfolio Secure Income Stream For personal use only || Focus on quality tenants % of Total Next Review Type Cumulative % || 79% of gross income from government or ASX 200 Passing Income companies Fixed1 74.5% 74.5% || 75% of portfolio subject to fixed or minimum reviews, CPI 2 21.4% 95.9% with aver
Slide 20: Long term focus
growth long term focus For personal use only || Aim is to deliver outperformance through the cycle || Cromwell Property Group has significantly outperformed in direct property and property securities returns over short, medium and long term || Direct property outperformance independently verified by
Slide 21: Funds Management – Overview and Update
growth Funds Management – Overview and Update For personal use only || Cromwell is a leading funds manager with a large number of Gross Assets under Management loyal, retail investors A$ billion »» Origins in retail funds management 3.5 »» Has raised over $900 million for unlisted property funds, wi
Slide 22: EPS and DPS guidance
guidance eps and dps guidance For personal use only || FY11 Revised Guidance || FY12 Guidance »» Minimum EPS of 7.0 cps »» EPS of minimum 7.3 cps, assuming no transactional income »» Reflects no transactions, no Qantas sale || Payout ratio and includes costs of early debt refinancing »» Expect to ma
Slide 23: Summary
growth summary For personal use only || Solid earnings base || Targeting growth in NTA and EPS over medium term »» Recurring earnings currently >95% »» Have continued to expand AUM over last 3 years »» WALT of 6 years, quality tenant base »» Will benefit from improving valuations »» Minimal lease ex
Slide 24: Contacts
contacts For personal use only Paul Weightman Chief Executive Officer Cromwell Property Group Ph: +61 (0) 7 3225 7720 Level 19, 200 Mary Street pweightman@cromwell.com.au Brisbane QLD Phone: +61 7 3225 7777 Facsimile: +61 7 3225 7788 Daryl Wilson Chief Financial Officer www.cromwell.com.au Ph: +61 (
Slide 25: Appendix – Additional Information
For personal use only APPENDIX Additional Information CROMWELL PROPERTY GROUP HY11 RESULTS PAGE 25
Slide 26: Property Portfolio – key assets
Property Portfolio – key assets For personal use only || Top 5 assets account for 52% of portfolio with occupancy of 99.3% and a WALT of 7.1 years Valuation Cap Asset Location Class Valuation Date Rate Occupancy WALT Major Tenants Bureau of Meteorology, Medibank Private, Vic 1 700 Collins Street Mel
Slide 27: Property Portfolio
Property Portfolio For personal use only Asset Sector Valuation ($m) Cap Rate Occupancy WALT Major Tenants 700 Collins Street, Melbourne, VIC Commercial 168.0 7.75% 100.0% 4.5 Bureau of Meteorology and Medibank Private Tuggeranong Office Park, Greenway, ACT Commercial 166.0 8.75% 100.0% 5.9 Governme
Slide 28: Top Tenants
Top 20 Tenants For personal use only % of Total Portfolio Tenant Building Tenant Classification Gross Income Commonwealth of Australia Dept of FACSIA Tuggeranong Office Park Government 13.6% Qantas Airways Limited Qantas Aviation 9.8% Origin Energy 321 Exhibition Street Resources 8.9% Australian Whe
Slide 29: Property Portfolio – Focus on Sustainability
Property Portfolio – Focus on Sustainability For personal use only || Cromwell has adopted Global Reporting Initiative (GRI) Portfolio Energy Rating (NABERS Star Rating) G3 guideline as the framework for reporting on the Group’s environmental, economic and social performance. 5.0 || Governance 4.0 3
Slide 30: Profit from Operations by Segment
Profit from Operations by Segment For personal use only 1H FY11 ($’000) 1H FY10 ($’000) Property Funds Property Property Funds Property Investment Management Development Consolidated Investment Management Development Consolidated Segment revenue and other income Sales to external customers 67,848 2,
Slide 31: Net Property Income
Net Property Income For personal use only 1H11 1H10 Variance 1H11 1H10 Variance ($’000) ($’000) (%) ($’000) ($’000) (%) Tuggeranong Office Park, Greenway ACT 9,464 9,017 5.0% Elders Woolstore, Gillman SA 639 626 2.2% National Circuit, Barton ACT 1,376 1,295 6.2% Hoppers Crossing Distribution Centre,
Slide 32: Reconciliation between Operating and Statutory Profit
Reconciliation between Operating and Statutory Profit For personal use only 1H11 ($’000) 1H10 ($’000) Profit from operations 32,867 33,354 Gain/(loss) on sale of investment properties 6 (586) Gain/(loss) on sale of available-for-sale financial assets – 3,431 Fair value adjustments/write-downs: Inves
Slide 33: Revenue Analysis
Revenue Analysis For personal use only 1H11 ($’000) 1H10 ($’000) Change Operating Revenue Rental income and recoverable outgoings 67,848 60,768 + 12% Funds management fees 2,866 7,687 – 63% Share of operating profits of equity accounted entities 488 3,593 – 86% Distributions and interest 3,050 2,662
Slide 34: Detailed Balance Sheet
Detailed Balance Sheet For personal use only Dec-10 ($’000) Jun-10 ($’000) ASSETS Cash and cash equivalents 40,378 98,469 Investment properties 1,395,710 1,064,100 Investment in associates 6,816 56,802 Development Inventory 5,107 4,925 Trade and other receivables 29,016 47,988 Other assets 13,050 10
Slide 35: Debt Facilities
Debt Facilities For personal use only Dec-10 Actual Dec-10 Pro forma Pro forma Facility ($’000) Maturity facilities maturity Security Financial Covenants Syndicated facility $415,260 Nov-11 $415,260 Mar-14 All portfolio excluding assets below LVR ≤ 60% ICR ≥ 1.5 times Tuggeranong Facility (Tranche A
Slide 36: Thank You
For personal use only THANK YOU CROMWELL PROPERTY GROUP HY11 RESULTS PAGE 36