Rural Funds Group · ASX:RFF
Rural Funds — Corporate Update (October 2019)
24 slides from Rural Funds's corporate update, Oct 28, 2019
Slide 1: Sale of poultry assets and acquisition of cattle properties
Managed by: Sale of poultry assets and acquisition of cattle properties October 2019
Slide 2: Disclaimer
Managed by: Disclaimer This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (RFM) as the responsible entity of Rural Funds Group (RFF). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805). The
Slide 3: Contents
Managed by: Contents 1. Fund update 2. Portfolio impact 3. Conclusion 4. Appendices 3
Slide 4: Fund update
1 Fund update Kleinig Vineyard during harvest, South Australia, March 2019.
Slide 5: Poultry asset sale
Managed by: Poultry asset sale RFM has entered into agreements for the sale of RFF’s 17 poultry farms to ProTen Investment Management Pty Ltd as trustee for ProTen Investment Trust (ProTen) for $72.0m.1,2 Poultry assets • Eleven poultry farms have old infrastructure and grower agreements, with lease
Slide 6: Poultry investor returns
Managed by: Poultry investor returns RFM has managed the poultry assets since 2003. Unitholders have received a compound annual total return (CAGR) of 10.6%. Value of $10,000 invested in RFM Chicken Income Fund1 • RFM invested in the poultry industry in 2003. The investment entity was called the RFM
Slide 7: Redeployment of capital
Managed by: Redeployment of capital Funds from the sale of the RFF poultry farms will be redeployed to seek higher returns on investment. Spectrum of investment opportunities1 • RFM has observed that higher investment returns are achievable from assets with under utilised natural resources. Producti
Slide 8: Property acquisitions
Managed by: Property acquisitions RFM is deploying two investment strategies; productivity gains and higher and better use. Strategy 1: Productivity gains Cattle property • RFM has entered into options to acquire three cattle properties (Petro, High Hill and Willara) in Western Australia for $22.6m
Slide 9: Replicating successful acquisitions
Managed by: Replicating successful acquisitions The recent lease of Rewan to Australian Agricultural Company is confirmation of Strategy 1. Rewan, central Queensland • Based on the June 2019 independent valuation the compound annual return to RFF since acquisition is 19.3% per annum.1 • Rewan was th
Slide 10: Natural resource developments
Managed by: Natural resource developments Strategy 1 is being deployed on a growing number of natural resource predominant assets, seeking to improve value and income over time. Notes: 1. Pasture development refers to stylo on RFF’s North Qld properties, and intensive pastures including Leucaena on
Slide 11: Portfolio impact
2 Portfolio impact Wheat crop on Lynora Downs, central Queensland, July 2019.
Slide 12: Portfolio update
Managed by: Portfolio update FY20 forecast distributions of 10.85 cpu remain; reflecting a forecast payout ratio of 81%. FY20 forecasts FY20 forecast revenue by sector Disclosed Revised2 2% 27 Aug 191 7% AFFO per unit 14.0 cents 13.4 cents 5% Distributions per unit 10.85 cents 10.85 cents 5% AFFO pa
Slide 13: Sectors and assets
Managed by: Sectors and assets The portfolio includes 36 properties diversified across five agricultural sectors and multiple climatic zones.1,2 Notes: 1. Shaded areas denote climatic zones differentiated by rainfall seasonality. Source: Bureau of Meteorology; see RFF Climatic Diversification discus
Slide 14: Key lessees and counterparts
Managed by: Key lessees and counterparts Lessees and counterparts include leading agricultural producers and processors. Largest lessees by FY20 annualised revenue1 Lessee Description Largest almond grower in Australia, producing approximately 45% of the national crop. Wholly owned subsidiary of SGX
Slide 15: Conclusion
3 Conclusion Cattle grazing, Rewan, central Queensland, June 2019.
Slide 16: Conclusion
Managed by: Conclusion RFF aims to provide investors consistent and increasing income. It achieves this by owning and improving the productivity of farms that are leased to good counterparties. Description DPU, DPU growth, AFFO retention and payout ratio 1. The sale of the poultry assets brings forw
Slide 17: Appendices
4 Appendices Mayneland cotton crop, central Queensland, March 2019.
Slide 18: Portfolio diversification
Managed by: Portfolio diversification RFM continues to seek to diversify RFF by sector, asset type and climatic zone. Sector (FY20f revenue) Climatic zone (FY20f revenue) 2% 7% Southern 5% Almonds 23% 5% Northern Cattle Poultry 6% 45% Vineyards Cotton Macadamias Other 77% 30% Asset type (FY20f reven
Slide 19: Capital expenditure
Managed by: Capital expenditure FY19 capex of $43.1m and forecast capex of $28.0m (FY20 and FY21) attracts rent as it is deployed.1 Total FY19 FY20f FY21f forecast Description ($m) ($m) ($m) ($m) Water acquisitions for Kerarbury complete in FY19. FY20 Almonds 35.3 9.9 - 9.9 capex primarily for remai
Slide 20: Independent valuations
Managed by: Independent valuations RFM has a policy to independently value assets at least every two years and rotate valuers every three years. Asset and last independent valuation date Last independent Sector Asset Brief asset description1 valuation (by Valuer reporting date) Mooral 808 ha mature
Slide 21: Historical financial metrics
Managed by: Historical financial metrics Key financial metrics FY15 FY16 FY17 FY18 FY19 $m $m $m $m $m Total comprehensive income 10.2 34.8 34.2 44.0 33.1 Adjusted funds from operations (AFFO) 11.0 14.3 25.6 32.3 43.2 Distributions 10.7 14.0 21.1 25.6 34.8 Total Adjusted assets1 262.2 407.5 587.5 72
Slide 22: Rural Funds Management
Managed by: Rural Funds Management RFM is a fund and farm manager with 22 years’ experience in Australian agriculture. Key information – 30 June 2019 Board and management team contacts and tenure Established 1997 Assets under management $1.2 billion Ownership Directors and staff Guy Paynter David Br
Slide 23: Glossary and table of abbreviations
Managed by: Glossary and table of abbreviations Term Definition Term Definition Adjusted Net Asset Value (NAV) adjusted for the independent valuation of Improved Pasture with higher relative level of nutrition that is sown to NAV water entitlements pasture increase livestock weight gain Adjusted Tot
Slide 24: Rural Funds Management
Rural Funds Management Ltd ACN 077 492 838 AFSL 226701 Canberra Office Level 2, 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: ruralfunds.com.au Managing good assets with good people For further information: Investor relations and media enquiries: David