Slide 1: Cromwell Group Full Year Results FY07
For personal use only CROMWELL GROUP FULL YEAR RESULTS FY07 28 August 2007 1 OF 29
Slide 2: Agenda
AGENDA For personal use only • Overview • Financial Results • Investment Property Update • Funds Management Update • Development Update • Outlook & Strategy 2 OF 29
Slide 3: Overview
For personal use only 3 OF 29 OVERVIEW
Slide 4: Highlights
HIGHLIGHTS For personal use only • Stapling effective 19 December 2006 • Record full year profit of $113.9 million • Operating earnings1 of $37.6 million vs. forecast $36.3 million • AUM of $1.64 billion, up 20% since Jun-06 • Strong property revaluations of $69.8 million net post-stapling • NTA inc
Slide 5: Financial Performance Summary
FINANCIAL PERFORMANCE SUMMARY For personal use only Actual EM Forecast Variance FY07 FY07 Total Revenue $176.4m $90.3m + 95% Revenue, net of fair value adjustments $95.7 m $83.9m + 14% Profit after tax $113.9m $33.7m + 238% Operating Earnings1 $37.6m $36.3m + 4% Distributions $36.8m $36.4m + 1% Payo
Slide 6: Financial Position Summary
FINANCIAL POSITION SUMMARY For personal use only Actual Actual Variance Jun-07 Dec-06 Total assets $1,295m $1,493m - 13% Net assets $672m $546m + 23% NTA $668m $541m + 23% Net debt1 $569m $893m - 36% Gearing2 44% 60% Securities issued 698m 696m - NTA per security 96¢ 78¢ + 23% 1. Interest bearing li
Slide 7: Financial Results
For personal use only FINANCIAL RESULTS 7 OF 29
Slide 8: Financial Performance
FINANCIAL PERFORMANCE For personal use only Actual EM Forecast Variance FY07 FY07 % ($000’s) ($000’s) Contribution from: Property Investment 51,196 51,315 Funds Management 11,725 15,023 Development 5,148 1,800 68,069 68,138 - Operating Expenses (11,487) (9,934) EBITDA and significant items 56,582 58
Slide 9: Operating Performance
OPERATING PERFORMANCE For personal use only Actual EM Forecast Variance FY07 FY07 % ($000’s) ($000’s) Net profit after tax 113,893 33,676 + 238% Add back Unrealised gain/(loss) on fair value adjustments of: - Investment properties (69,779) 1,358 - Interest rate derivatives (4,610) 887 - Investment i
Slide 10: Debt Management
DEBT MANAGEMENT For personal use only Actual Actual Jun-07 Dec-06 Total interest bearing debt $589m $893m Gearing1 44% 60% % hedged 55% 55% Weighted average hedge maturity 5.2 yrs 5.4 yrs Weighted average interest rate2 6.27% 6.26% Weighted average fixed rates 5.49% 5.50% Pro-forma gearing1 post yea
Slide 11: Fixed Interest Maturity Profile
FIXED INTEREST MATURITY PROFILE For personal use only 100% 90% 80% 70% % of Total Debt 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 IRRM Maturity Date - Financial Years ending 30 June: Hedged Floating 11 OF 29
Slide 12: Investment Property Update
For personal use only INVESTMENT PROPERTY UPDATE 12 OF 29
Slide 13: Property Investment Overview
PROPERTY INVESTMENT OVERVIEW For personal use only Actual Actual Jun-07 Dec-06 Number of properties 27 34 Total Asset Value $1.12 bn $1.42 bn NLA (m2) 462,463 472,264 Occupancy 99.0% 97.9% Weighted average lease expiry (by income) 5.1 years 4.7 years Government/listed tenant income 71% 71% 13 OF 29
Slide 14: Portfolio Rebalanced
PORTFOLIO REBALANCED For personal use only Acquired Synergy site in Brisbane for $7 million • Construction commenced – completion expected late 2008 • Development approval since granted for additional NLA (to 14,000m2) • End cost c$90 million; 6.75% cap. rate • 18 month rental guarantee from complet
Slide 15: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION For personal use only 3% 9% 4% 32% 20% 17% 15% 15 OF 29
Slide 16: Tenant & Sector Diversification
TENANT & SECTOR DIVERSIFICATION For personal use only Industrial Private Company 14% 29% Government Retail/ Authority Entertainment 44% 4% Listed Co/Subsidiary Commercial 27% 82% • High percentage of income secure • Significant office exposure 16 OF 29
Slide 17: Lease Expiry Profile (by gross income)
LEASE EXPIRY PROFILE (by gross income) For personal use only 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Holdover Thereafter 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Only 8% vacant/expiring by end FY08 17 OF 29
Slide 18: Strong Second Half Revaluations
STRONG SECOND HALF REVALUATIONS For personal use only 1,800 38 105 404 1,600 1,456 1,400 34 1,161 Value (A$ million) 1,200 1,000 800 600 400 200 0 31-Dec-06 Revaluations Acquired CPF Deconsol. Sold 30-Jun-07 18 OF 29
Slide 19: Funds Management Update
For personal use only FUNDS MANAGEMENT UPDATE 19 OF 29
Slide 20: Assets Under Management
ASSETS UNDER MANAGEMENT For personal use only $1,800 $1,143 $1,600 $1,368 $1,400 AUM (A$ million) $1,200 $1,000 Internal $779 $800 External $562 $600 $344 $400 $279 $499 $145 $200 $0 2001 2002 2003 2004 2005 2006 2007 • Average increase in AUM of 43% pa past 5 years • $1.4b current AUM (net increase
Slide 21: Cromwell Property Fund Update
CROMWELL PROPERTY FUND UPDATE For personal use only Geographic Diversification • Open-ended, unlisted core-plus fund QLD SA 8% 3% VIC • Investing in Australian non- ACT residential property 36% 20% • Primarily targeted at retail investors NSW • Researched by Aegis, Lonsec and 33% PIR • Widely approv
Slide 22: Cromwell Property Fund Update
CROMWELL PROPERTY FUND UPDATE For personal use only • Current inflows of approximately $3 million per week • Expect to continue to achieve this in FY08 • Re-rating likely due to increased diversification Jul-07 Jul-06 Number of properties 11 5 Total Value $445m $277m Occupancy 96% 98% WALT 6.7 years
Slide 23: Development Update
For personal use only DEVELOPMENT UPDATE 23 OF 29
Slide 24: Development Update
DEVELOPMENT UPDATE For personal use only • Sale of Holt Street asset in FY07 for $5.1m profit • Bundall sale expected in FY08 • Agreement to develop 3 new distribution centres with JV Partner 24 OF 29
Slide 25: Outlook & Strategy
For personal use only OUTLOOK & STRATEGY 25 OF 29
Slide 26: Core Strengths
CORE STRENGTHS For personal use only • Streamlined structure with majority earnings from property investment • Significant weighting to office sector • Internalised retail funds management capabilities with proven track record • Internalised asset management team with active management model and foc
Slide 27: Core Strategy
CORE STRATEGY For personal use only Property Investment • Co-invest in managed funds • Stable portfolio with selected value-add opportunities Funds Management • Grow funds management revenues as proportion of total revenues • Increase suite of unlisted retail products • Acquisition of similar or add
Slide 28: FY08 Earnings Growth
FY08 EARNINGS GROWTH For personal use only Operating Earnings • Expect 10.0c operating earnings and DPS in FY08 Property Income: 70% contribution1 to FY08 earnings • Expect average like for like rental increases of 4% • Only 8% of lease income expiring Funds Management Income: 18% contribution1 to F
Slide 29: Disclaimer
For personal use only DISCLAIMER This presentation was prepared by Cromwell Corporation Limited ACN 001 056 980 and Cromwell Property Securities Limited ACN 079 147 809, AFSL 238052. This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe