Stride Property Group · NZX:SPG
Stride Property — FY2020 Earnings Presentation
37 slides from Stride Property's earnings presentation, Jun 23, 2020
Slide 1: Stride Property Group Annual Results 2020
Stride Property Group Annual Results 2020
Slide 2: Contents
Contents Highlights 3 Sustainability 14 Financial Performance 16 Capital Management 21 Portfolio Overview 24 Conclusion 29 Glossary 31 Appendices 33 Stride Property Group I Annual Results Presentation for the year ended 31 March 2020 Capitalised and technical terms are defined in the glossary on Pag
Slide 3: Highlights
Highlights
Slide 4: Performance
Performance Stride Property Group (Stride) - Consolidated (FY19 figures in brackets) Distributable profit1 after Profit after income tax current income tax NTA per share Pro forma LVR2 $25.3m $37.7m $1.91 17.8% Earnings Valuation • Net rental income of $59.1m ($57.3m), up $1.8m • Total portfolio val
Slide 5: Places
Places Stride Property Limited (SPL) Waste Management Transactions Auckland Headquarters, East Tamaki • Sale of three large format retail properties to Investore for $140.75m, settled 30 April 2020 • Industrial acquisitions of The Concourse1, Auckland, for $35m, settled on 27 June 2019, and the post
Slide 6: People
People Board Refresh – Stride • Nick Jacobson appointed to the Stride Boards in July 2019, bringing considerable property and capital markets experience, which will benefit Stride as it grows its funds management business • David van Schaardenburg retired on 29 August 2019 after 9 years as a Directo
Slide 7: Products
Products Investore has undertaken a number of transactions in execution of its strategy of • As a result of COVID-19, the valuations of the four shopping centres owned targeted growth: by Diversified have declined by $70.5m or 14.5% on a gross basis for FY20 1. Active Portfolio Management • The $110
Slide 8: Products - new
Products - new As at • FY20 saw a significant milestone for Stride in the development of its Industre Portfolio on Commencement 31 Mar 201 funds management business with the agreement to establish Industre Properties (no.) 13 • Stride expects that Industre will commence operations on 30 June Value2
Slide 9: Products
Products Stride AUM as at 31 March 2020 Stride AUM as at 31 March 2020 post transactions1 SIML Products = $1.18Bn SIML Products = $1.82Bn (+$0.65Bn) $996m $895m $761m $376m $488m $496m $132m $430m $414m $82m $32m $302m $302m $414m $398m $186m $186m Office Retail Shopping Centres Large Format Retail
Slide 10: SPL Portfolio Metrics
SPL Portfolio Metrics SPL SPL’s directly-held and weighted look-through portfolio metrics • Following the establishment of Industre and the sale of the three large format retail properties to Investore, SPL will hold its investments in industrial and large format retail property through Industre and
Slide 11: SIML AUM growth
SIML AUM growth Stride Investment Management Limited Stride’s pro forma AUM was $2.31Bn as at 31 March 2020, with over $520m of available capital across Investore, Industre and SPL. If this capital was used, Stride’s AUM would grow to $2.83Bn $2,829m $218m3 $706m $488m $2,123m $154m1 $82m $1,821m $1
Slide 12: Value of SIML Management Contracts
Value of SIML Management Contracts Stride Investment Management Limited Stride’s reported net tangible assets (NTA) as at 31 March 2020 was $1.91 per share. This excludes the value associated with SIML’s intangible management contracts • The value of the management contracts that SIML has with each
Slide 13: COVID-19 Update
COVID-19 Update Stride Property Group (Stride) While Stride Property Group (Stride) is not immune to the impact of COVID-19, Stride will be in a sound financial position following the sale of the three properties to Investore and commencement of Industre. Stride’s strong balance sheet and access to
Slide 14: Sustainability
Sustainability > & S
Slide 15: Sustainability
Sustainability Sustainability strategy • During the year in review, we have built on the gap analysis and Performance sustainability materiality assessment undertaken during FY19 and have now developed a sustainability strategic plan People Places and Products • This strategic plan will provide dire
Slide 16: Financial Performance
Financial Performance
Slide 17: Financial Performance
Financial Performance Stride - Consolidated 2020 2019 Change Actual Actual $m $m $m % Net rental income 59.1 57.3 +1.8 +3.1 Management fee income 18.3 15.7 +2.6 +16.4 Corporate expenses (19.6) (18.9) (0.6) (3.3) Corporate expenses - feasibility costs (2.8) (0.4) (2.4) (650.3) Corporate expenses - pr
Slide 18: Distributable Profit
Distributable Profit1 Stride - Consolidated 2020 2019 Change Actual Actual $m $m $m % Profit before income tax 28.7 81.4 (52.7) (64.8) Non-recurring and non-cash adjustments: - Net change in fair value of investment properties 1.8 (36.5) +38.3 +104.8 - Reversal of lease liability movement in investm
Slide 19: AFFO Distributable Profit
AFFO Distributable Profit Stride - Consolidated 2020 2019 Change Actual Actual $m $m $m % Distributable profit after current income tax 37.7 38.8 (1.1) (2.8) Adjustments to funds from operations: - Maintenance capital expenditure (5.9) (6.4) +0.5 +7.2 Adjusted Funds From Operations (AFFO) 31.8 32.4
Slide 20: Financial Summary
Financial Summary Stride - Consolidated Pro forma2 As at As at 2020 v As at 31 Mar 2020 31 Mar 2020 31 Mar 2019 2019 Change Portfolio valuation1 ($m) 488.1 996.13 966.3 29.9 Bank debt drawn ($m) 87.1 386.2 332.9 53.4 Bank loan to value ratio (LVR) (%) 17.8 39.14 34.4 0.5 Equity ($m) 698.2 704.2 (6.1
Slide 21: Capital Management
Capital Management f~
Slide 22: Capital Management – Debt Facilities
Capital Management – Debt Facilities SPL Highlights Pro forma1 As at As at • $135m of banking facilities expiring June 2021 were extended three years to Debt facilities 31 Mar 2020 31 Mar 2020 31 Mar 2019 June 2024 in April 2020 (post balance date) Banking facility limit • Next debt facility maturin
Slide 23: Capital Management – Cost of Debt
Capital Management – Cost of Debt SPL As at As at Highlights Cost of debt 31 Mar 2020 31 Mar 2019 • $60m of swaps matured with a weighted average rate of 3.9% Weighted average cost of debt 3.61% 4.63% • Hedging has fallen from 77% to 50% at 31 March 2020, and is (incl. margins & line fees) anticipat
Slide 24: Portfolio Overview
Portfolio Overview
Slide 25: Portfolio Overview
Portfolio Overview SPL FY20 rent reviews completed Pro forma1 as As at As at Overview at 31 Mar 20 31 Mar 20 31 Mar 19 +$0.3m $36.9m Properties (no.) 11 26 26 +$0.5m +6.8% Tenants (no.) 310 388 381 +$0.4m +3.2% $35.7m +2.7% Net Lettable Area (sqm) 103,026 259,285 252,014 Net Contract Rental2 ($m) 36
Slide 26: Industrial
Industrial SPL As at As at Highlights Overview 31 Mar 20 31 Mar 19 • Net valuation movement2 of +$42.7m or +14.3% for FY20 Properties (no.) 12 11 • 16 rent reviews over 89,263 sqm with an increase of +3.6% on an annualised Tenants (no.) 28 21 basis Net Lettable Area (sqm) 118,569 100,919 • WALT1 inc
Slide 27: Office
Office SPL As at As at Highlights Overview 31 Mar 20 31 Mar 19 • Net valuation movement of -$3.8m or -2.1% for FY20 Properties (no.) 7 8 • Rent reviews completed over 12,443 sqm for an increase of +4.3% to Tenants (no.) 66 70 previous rentals Net Lettable Area (sqm) 37,670 48,606 • Heartland Bank, 3
Slide 28: Retail
Retail SPL Retail Shopping Centre Large Format Retail Highlights As at As at As at As at • Three large format retail assets sold to Investore with settlement on 30 April 31 Mar 31 Mar 31 Mar 31 Mar 2020. SPL no longer has a direct holding of large format retail Overview 20 19 20 19 • SPL’s shopping
Slide 29: Conclusion
Conclusion ff es
Slide 30: Conclusion
Conclusion Looking forward • The establishment of Industre, together with the growth of Investore, have been important recent steps in the delivery of our strategy • Stride will continue to focus on establishing a group of commercial property investment management Products to provide growth in our i
Slide 31: Glossary
Glossary f
Slide 32: Glossary
Glossary Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL (or the relevant landlord) by that tenant Contract Rental under the terms of the relevant lease as at the relevant date, annualised for the 12-month period on the basis of the occupancy level for
Slide 33: Appendices
Appendices *
Slide 34: Appendix 1: Portfolio by Sector
Appendix 1: Portfolio by Sector Overview Total Portfolio Office Industrial Large Format Retail Shopping Centres Directly-held portfolio pro forma1 Properties (no.) 11 7 4 Net Contract Rental2 ($m) 36.1 13.2 22.9 WALT2 (years) 4.4 4.6 4.3 Occupancy Rate (% by area) 95.9 95.2 96.3 Portfolio Valuation
Slide 35: Appendix 2: Net Contract Rental and Profit
Appendix 2 Net Contract Rental $4.6m $0.2m $63.0m $5.2m $1.2m $1.3m $58.1m ($3.0m) ($8.5m) ($4.5m) $36.1m ($18.5m) As at Expiries New leases Rent reviews Acquisition Divestments Developments Other As at Sale of LFR Industre As at 31 Mar 2019 and renewals 31 Mar 2020 assets to commencement 31 Mar 202
Slide 36: Appendix 2: NTA per share and Investment Property
Appendix 2 NTA per share $0.08 $0.02 $1.92 ($0.01) $1.91 ($0.10) As at Profit before tax Income tax expense Movement in cash flow Dividends paid As at 31 Mar 2019 hedges, net of tax 31 Mar 2020 Investment Property (excluding impact of NZ IFRS 16 Leases) $35.0m $996.1m $966.3m $47.1m ($0.5m) ($50.1m)
Slide 37: Thank You
Thank You No representation or warranty, express or implied, is made as to the accuracy, Important Notice: The information in this presentation is an overview and does not adequacy or reliability of any statements, estimates or opinions or other information contain all information necessary to make