BWP Trust · ASX:BWP
BWP Trust — Bunnings Property Trust — FY2004 Earnings Presentation
25 slides from BWP Trust's earnings presentation, August 2004
Slide 1: 2004 Results Presentation
2004 Results Presentation August 2004 www.bunningspropertytrust.com.au
Slide 2: Presentation Outline
Presentation Outline ¾ Structure ¾ Key Events/Results ¾ Tenant Performance ¾ Acquisition/Development Process ¾ Portfolio ¾ Capital Management ¾ Financial Performance ¾ Outlook August 2004 2 2
Slide 3: Structure Overview
Structure Overview ¾ Manager: Bunnings Property Management (BPML) – Subsidiary of WES; but… – Independent board Bill Cairns (Chairman); AVR; ex GPT,FAL,WAN Robert McCuaig; Founder of Colliers; Multiplex; PAO (Chair) Peter Mansell; WAN, FAL, JDV (Chair), ZFX (Chair) Gene Tilbrook; WES, Gresha
Slide 4: Events - highlights
Events - highlights ¾ Acquisitions/developments ($52.2m) – 1 development site acquired & 1 established property – 3 warehouses developed & 1 substantially completed – 1 distribution centre developed – contracts exchanged on Thornleigh property ¾ 14.6% market rent review uplift on 20 properties ¾ Rev
Slide 5: Results – highlights at June 2004
Results – highlights at 30 June 2004 ¾ Revenue $44.5 million 23.8% on pcp ¾ Distribution 11.38 cpu 8.4% on pcp ¾ Property assets $569 million 22.0% on pcp ¾ NTA $1.34 per unit $0.20 on pcp ¾ Market capitalisation $463 million 15% on pcp August 2004 5 5
Slide 6: The Tenant – a strong performer with Warehouses
The Tenant – a strong performer with 125 Warehouses Sales from BWH stores drive Bunnings revenue 4,000 450 3,500 400 350 Operating Revenue ($m) 3,000 SMI acquisition 300 2,500 EBITA ($m) 250 2,000 BWP established 200 1,500 150 1,000 100 500 50 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Re
Slide 7: The Tenant – recent activity and outlook
The Tenant – recent activity and outlook ¾ 2004 Trading – $3.8b revenue; ↑ 11.7% on pcp – store on store cash sales ↑ 11%, trade sales ↑ – $375m EBITA; ↑ 12.7% on pcp Series 3000 Warehouse – margin & inventory management improvements ¾ Network – 12 openings – 6 BWH upgrades Series 5000 Warehouse – 5
Slide 8: The Tenant – 100% occupancy; 10.8 yr ave. lease expiry
The Tenant – 100% occupancy; 10.8 yr ave. lease expiry 20 Number of leases 16 12 18 8 4 9 6 6 4 3 0 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Term to lease expiry (years) ¾ Typical lease features – 5 + 5 + 5 (plus 2 x 5 year options) – Annual CPI escalation – 5 year market reviews – Some ratchet clauses –
Slide 9: Acquisition/Development Process - greenfields
Acquisition/Development Process - greenfields ¾ Bunnings identifies site – visible & accessible/usually industrial land – typically 3 hectares/significant catchment area – option to purchase ¾ Bunnings may offer to BPML – full development proposal – negotiated outcome ¾ If offer accepted by BPML – B
Slide 10: Acquisition of developed properties
Acquisition of developed properties ¾ Ex Bunnings – IPO properties, others ¾ Ex BBC Hardware Ltd (18 acquired by WES via SMI) – 5 purchased by BWP to date & 1 under contract – 4 sold by WES on VP basis – more BWP purchases possible ¾ Ex third party vendors (approximately 65) – one purchased (Fyshwic
Slide 11: Portfolio geographic spread
Portfolio – 50 properties; geographic spread improving Jun Jun Jun 02 03 04 VIC 17 19 19 QLD 61 101 101 NSW/ACT 3 8 10 WA 9 9 9 ) 23 SA 2 2 2 TOTAL 37 48 50 )8 1includes distribution centres ) 18 )9 )4)2 ) 41 ) 9 .1 ) 125 BWH Stores ) 17 .2 ) 32 )4 ) 45 BWP – owned stores )2 )1 . 3 BWP development s
Slide 12: Portfolio – NZ and 3000 series opportunities
Portfolio – NZ and 3000 series opportunities ¾ New Zealand – Bunnings rollout 25 stores (targeted) – 2 BWH stores completed to date – Logical growth opportunity for BWP – BWP prepared for opportunities ¾ 3000 Series – Metro and regional properties – 29 locations identified by Bunnings – Bunnings rol
Slide 13: Portfolio – growth being maintained
Portfolio – growth being maintained $m 600 500 400 300 200 100 0 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 At cost Revaluations August 2004 13 13
Slide 14: Portfolio – 14.6% uplift from 20 rent reviews
Portfolio – 14.6% uplift from 20 rent reviews Property Passing Market Uplift Effective rent review % date $000 $000 pa pa Altona, VIC 722 866 19.9 24 Sep 03 Balcatta, WA 1,111 1,305 17.5 25 Sep 03 Broadmeadows, VIC 722 859 19.0 24 Sep 03 Burleigh Heads, QLD 1,017 1,113 9.5 22 Oct 03 Cannon Hill, QLD
Slide 15: Portfolio – market rent review analysis
Portfolio – market rent review analysis ¾ Process – licensed surveys of premises by BWP – independent expert advice procured by BWP – 3 negotiated outcomes (results consistent with BWP advice) – 17 determinations (7 valuers, mutual appointment) ¾ Results varied widely – range +1.9% to +31.6% uplift
Slide 16: Portfolio – 20.8% uplift from 24 revaluations
Portfolio – 20.8% uplift from 24 revaluations Property Book Current Change Current value market % valuation $000 value yield $000 % Altona, VIC 8,200 10,250 25.0 8.50 Balcatta, WA 11,700 15,500 32.5 8.50 Broadmeadows, VIC 8,450 10,700 26.6 8.00 Burleigh Heads, QLD 10,200 12,350 21.1 8.50 Cannon Hill
Slide 17: Portfolio – Thornleigh acquisition
Portfolio – Thornleigh acquisition ¾ Contracts exchanged, settlement imminent ¾ 7th former BBC HWH purchase by BWP (6th from WES) ¾ Snapshot – 19km northwest of Sydney CBD – major arterial Pennant Hills Rd, retail precinct – 1.2 ha site, 5,130m2 GLA – $13.3m purchase – rent $1,000,000 pa ($195/m2) –
Slide 18: Portfolio – Bayswater tenancy development
Portfolio – Bayswater tenancy development ¾ A tenant other than Bunnings – a first for BWP ¾ Council approvals – maximum 2 tenancies, minimum tenancy 500m2 – restricted retail ¾ Snapshot – adjacent new BWH on Canterbury Rd – 8,200m2 site valued at $1.8m (inc. developed car park) – 2,459m2 GLA – pre
Slide 19: Portfolio – capital commitments
Portfolio – capital commitments Capital Expenditure ($m) Committed Estimated Maitland 1.4 Thornleigh 14.11 Maribyrnong 6.7 Bayswater 2.0 Vermont South 9.0 22.2 11.0 1includes stamp duty August 2004 19 19
Slide 20: Capital Management - overview
Capital Management - overview ¾ $156m equity raised post IPO – $25.0m underwritten UPP (Nov 03) – $33.7m placement (Nov 02) – $29.5m one for eight rights issue (Oct 01) – $23.9m placement (Sept 01) – $44.0m one for three rights issue (Jan 00) ¾ Borrowings – Preferred range of 20% to 40% (debt to tot
Slide 21: Capital Management – gearing within range
Capital Management – gearing within range 50% 40% Preferred range 30% 20% 10% 0% Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 August 2004 21 21
Slide 22: Capital Management – debt actively managed
Capital Management – debt actively managed BWP Hedge Book Overview Jun Jun Jun Jun Jun Jun 99 00 01 02 03 04 % Debt hedged1 87 86 77 90 86 95 Swap Rates (%) - Maximum 5.87 6.62 6.64 6.64 6.62 6.62 - Minimum 5.56 5.56 5.46 5.46 5.08 4.97 1interest bearing debt ¾ 30 Jun 04: 5.75% weighted average (exc
Slide 23: Financial Performance – DPU growth momentum
Financial Performance – DPU growth momentum CPU End of concessional 7.00 management fee 5.51 5.87 6.00 5.15 5.35 4.97 4.68 4.80 4.50 5.00 4.00 3.00 2.00 1.00 0.00 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 ¾ FY 2004 DPU 11.38 cents (↑ 8.4% on pcp) August 2004
Slide 24: Financial Performance – solid total returns
Financial Performance – solid total returns 19.6% 17.2% 15.8% 14.7% 14.0% 11.8% BWP ASX200 Property 1yr 3yr 5yr Source: Bloomberg, UBS Warburg August 2004 24 24
Slide 25: Outlook
Outlook ¾ Acquisition opportunities – ex Bunnings rollout (8 to 12 pa) – former BBC properties (ex WES & others) – New Zealand BWH rollout – 3000 Series rollout ¾ Portfolio upgrades/redevelopments ¾ Rent reviews – 7 properties in 2004/05 ¾ Revaluations – each property at least every 3 years 2004/05
Bunnings Property Trust — FY2004 Earnings Presentation on 6ix