Rural Funds Group · ASX:RFF
Rural Funds — H1 2014 Earnings Presentation
33 slides from Rural Funds's earnings presentation, Feb 27, 2014
Slide 1: ASX Release: Webinar presentation – 1H14 financial results
Rural Funds Group (RFF) For personal use only ASX Release 27 February 2014 Subject: Webinar presentation – 1H14 financial results Attached is a presentation to be delivered by David Bryant, Managing Director of Rural Funds Management Ltd at 11.30am 27 February 2014. To join the webinar, please conta
Slide 2: Rural Funds Group 2014 Half Year Results
For personal use only Rural Funds Group (ASX: RFF) 2014 Half Year Results 27 February 2014
Slide 3: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838) (“RFM”) as the responsible entity of Rural Funds Group (ARSN 112 951 578) (“RFF”). The information contained in this presentation is not investment or financial product advice and
Slide 4: 1. Rural Funds Group Overview
For personal use only 1. Rural Funds Group Overview
Slide 5: The evolution of Rural Funds Group
The evolution of Rural Funds Group Rural Funds Group was created through the merger of 3 existing unlisted funds For personal use only The RFM Chicken Income Fund (CIF) and RFM Australian Wine Fund (AWF) were merged with RFM RiverBank (RiverBank) RFM RiverBank was subsequently renamed the Rural
Slide 6: Overview of Rural Funds Group (RFF)
Overview of Rural Funds Group (RFF) RFF generates lease revenue and potential capital growth through owning agricultural assets For personal use only Key Statistics at 31 December 2013 Rural Funds Group (RFF or the Fund) is a listed property trust with a diversified portfolio of Australian agricul
Slide 7: Investment highlights
Investment highlights For personal use only Quality, pure play Australian agricultural property trust 1 • Exposure to quality agricultural properties located in major chicken, wine and almond producing regions of Australia • Assets include commercial scale poultry growing infrastructure, productive
Slide 8: Quality Australian agricultural portfolio
Quality Australian agricultural portfolio Exposure to quality agricultural properties located in the major chicken, wine and almond For personal use only producing regions of Australia Portfolio Overview Key Portfolio Statistic as at 31 December 2013 The properties are centred around the south eas
Slide 9: Diversified, stable income stream
Diversified, stable income stream Income is underpinned by fixed rental payments with rental increases and potential capital For personal use only growth over time Tenant Portfolio Diversification by FY14 Revenue Diversified, stable revenue stream underpinned by: – Fixed lease payment with annual
Slide 10: 2. Half Year Results
For personal use only 2. Half Year Results
Slide 11: 2014 half year results: key metrics
2014 half year results For personal use only Key metrics as at 31 December 2013 All results in line with expectations for Income the period Net loss after income tax (3,591,962) Adjust for merger transactions 4,798,149 Transitional period: Adjusted net profit after tax 1,206,187 – 170 days pre m
Slide 12: Summarised income statement
2014 half year results For personal use only Summarised income statement Transitional period: 6 months ended 6 months ended – 170 days pre merger Dec-13 Dec-12 – 13 days post merger Property revenue 5,467,207 3,992,599 Dec 13 includes merger related Other income 98,052 35,085 expenses of Total i
Slide 13: Summarised balance sheet
2014 half year results For personal use only Summarised balance sheet Merger increased assets by 156% As at As at NAV $118.4m Dec-13 Jun-13 Total interest bearing liabilities $97.6m Cash 6,618,835 182,462 Loan to Security Ratio 41% Property investments 225,887,478 89,332,456 – 40% core Inven
Slide 14: Funds from operations (FFO)
2014 half year results For personal use only Funds from operations (FFO) 6 months ended 31 Dec 2013 FFO per unit reflects pre merger Net property income 4,959,707 entity and is adjusted for Gross income 4,959,707 transaction costs Property expenses and overheads (1,742,346) FFO of 3.10 cents per
Slide 15: Financing facilities
2014 half year results For personal use only Financing facilities 31 December 2013: bank facilities of $94 million fully drawn 14 February 2014: bank facilities amended on listing – $97.5 million facility for a 5 year term with $2 million per annum amortisation commencing 30 September 2016 – 50%
Slide 16: 3. Strategy and Outlook
For personal use only 3. Strategy and Outlook
Slide 17: RFF distribution profile
RFF distribution profile For personal use only Declared: Record date 22 November 2013 - $0.0213 unfranked (on post merger basis) Record date 31 December 2013 - $0.0213 unfranked Forecast: Record date 10 March 2014 - $0.0213 unfranked Record date 30 June 2014 - $0.0213 unfranked Quarter
Slide 18: Strategy & outlook
Strategy & outlook For personal use only Forecasts on track Manager focus on: – Improving awareness of RFF to increase liquidity and fair valuation – Cost control – Ongoing assessment of opportunities along the agricultural leasing spectrum Preparing unitholder resolutions to create stapled se
Slide 19: Investment opportunities
Investment opportunities RFF has identified a range of potential investment opportunities For personal use only RFF will pursue acquisitions of additional assets to grow the quantum and diversity of its earnings The investment strategy is to invest across the full range of the asset continuum sh
Slide 20: 4. Appendices
For personal use only 4. Appendices
Slide 21: Reconciliation of net loss after tax to adjusted FFO
Appendix 1: reconciliation of net profit/(loss) after tax to adjusted FFO For personal use only Reconciliation from net loss after tax to Adjusted FFO 6 months ended Dec 2013 Net loss after tax (3,591,962) Add: Merger related transactions 3,466,807 Income tax assets written off due to merger 2,059,6
Slide 22: Sector outlook: agricultural land
Appendix 2 – sector outlook: agricultural land Agricultural land values have grown at an average rate of 5.3% over the period of 1978-2011 For personal use only • Growth in the value of agricultural land is driven by Growth in Australian agricultural land values: 1978 to 20112 increasing farm produc
Slide 23: Sector outlook: poultry
Appendix 2 – sector outlook: poultry Chicken meat has continued to grow as a proportion of total Australian meat consumption as it For personal use only is a cheap source of protein relative to other meats. This trend is forecast to continue in the near-to-medium term Forecast Australian poultry pro
Slide 24: Sector outlook: vineyards
Appendix 2 – sector outlook: vineyards Australian wine industry is still challenged by AUD and excess supply. Higher priced wine labels remain For personal use only very profitable. Global wine supply and demand Australian wine grape crush and average price 8.00 3,400 2.5 1,000 3,300 900 Average win
Slide 25: Sector outlook: almonds
Appendix 2 – sector outlook: almonds The almond outlook is positive. Global almond demand is growing at 8-10% pa with supply only For personal use only growing at 4% pa. Forecast domestic production Global demand and supply outlook 100,000 Forecasts 90,000 80,000 70,000 60,000 50,000 40,000 30,000 2
Slide 26: Properties and assets - poultry farms
Appendix 3: properties and assets - poultry farms For personal use only The sheds provides shelter, heating and cooling for the Asset Metrics chickens 17 poultry farms consisting of 154 All sheds are fully automated. Farm managers can monitor Location sheds located in Griffith, NSW and and modif
Slide 27: Properties and assets - vineyards
Appendix 3: properties and assets - vineyards For personal use only RFF owns 7 vineyards Asset Metrics – 6 located in South Australia within the Barossa 7 vineyards located in South Valley, Adelaide Hills and Coonawarra Location Australia and Victoria – 1 located in Grampian, Victoria 31 Dec 13 va
Slide 28: Properties and assets - almond orchards and water entitlements
Appendix 3: properties and assets – almond orchards and water entitlements For personal use only RFF owns 2 Almond Orchards located near Hillston NSW Asset Metrics – Yilgah – 1,006 planted ha Location Hillston, NSW – Mooral – 808 planted ha 1221 ha leased to SHV, and 593 ha leased to RFM 31 Dec
Slide 29: Properties and assets - StockBank
Appendix 3: properties and assets – StockBank For personal use only RFF owns $5 million of StockBank Units as at 31 Dec Asset Metrics 2013 StockBank purchases livestock that are leased to Location Various (NSW, VIC, SA) landowners 31 Dec 13 value $5 million StockBank generally divides its inve
Slide 30: The responsible entity
Appendix 4: the responsible entity RFM is one of the oldest and most experienced agricultural funds management organisation in For personal use only Australia Rural Funds Management Limited (RFM) is an experienced fund and asset manager that specialises in Australian agriculture Established in 1
Slide 31: Management team and board
Appendix 4: management team and board RFF is externally managed and governed by a highly experienced management team and board For personal use only Board of Directors Executive Management • Joined RFM in 2003 • Former director of broking firm JBWere with more than 30 years’ experience in corporate
Slide 32: Relationship with RFM
Appendix 4: relationship with RFM The Responsible Entity, on behalf of the Fund, has entered into agreements with RFM in relation For personal use only to management activities RFM will charge a fee and expense recovery for managing and administering the Fund • Management Fee of 0.6% p.a. of gross
Slide 33: Corporate information
Corporate information For personal use only Rural Funds Management Pty Ltd ACN 077 492 838 AFSL 226701 Canberra Office Level 2 2 King Street Canberra ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: www.ruralfunds.com.au For further information: For media enquiries: David Brya