Mirvac Group · ASX:MGR
Mirvac — Corporate Update (February 2013)
16 slides from Mirvac's corporate update, Feb 7, 2013
Slide 1: Development projects update
development For personal use only projects update 7 february 2013 by mirvac Artist’s impression of 8 chifley square, sydney, nsw
Slide 2: Development projects update
development projects update For personal use only The regular review of development projects nationally, as at 31 December 2012, has been completed and provides evidence that specific micro markets are not recovering as expected. Spring and Summer 2012 residential sales have been weaker than expecte
Slide 3: Quarterly national review of all projects
quarterly national review of all projects For personal use only Mirvac has conducted its regular quarterly review of all markets and projects Queensland - Sales activity over the past six months has remained weak. Substantial discounting is prevalent in sub- markets where Mirvac has exposure. The re
Slide 4: Projects impacted
projects impacted For personal use only Impacted projects to be managed in three ways: Continue to Develop Management to continue to develop projects over time, with forecast sales prices, sales rates and holding costs updated to reflect revised market expectations. Englobo Sales Where considered ap
Slide 5: Projects impacted
projects impacted For personal use only Project Product Line State Provision Acquisition Date Gainsborough Greens Masterplanned Communities QLD $58.6m Oct 06 Waterfront, Newstead – Site Balance Apartments QLD $51.4m Apr 08 Beachside Leighton, Stage 2 Apartments WA $43.0m Aug 06 Mackay Commercial QLD
Slide 6: Provision roll off
Provision roll off 1 For personal use only Provision Balance Profile Provision Release Profile $500m Existing Provision Balance Continue to develop $500m Existing Provision Balance Continue to develop Unsold stock Englobo Unsold stock Englobo 400 400 300 300 200 200 100 100 0 0 1H13 FY13 FY14 FY15 F
Slide 7: What has occurred
What has occurred For personal use only Historical context: • Acquisitions made predominantly in a market with high expected growth - average age of provisioned projects is 6.8 years (average acquisition date FY07) • Large capital commitments due to projects being ‘100% on Balance Sheet‘ • Capitalis
Slide 8: Looking forward
looking forward For personal use only • Centralised capital allocation decision making • Average age of non impaired projects is 2.5 years – purchased consistent with current market assumptions • Pro-actively increasing the number of capital efficient projects: Projects controlled in capital efficie
Slide 9: Summary
summary For personal use only • FY13 EPS guidance of 10.7 to 10.8cpss is unchanged • Mirvac remains on track to achieve FY14 target of >10% ROIC using post provisioned EBIT and pre provisioned inventory balance • Balance Sheet gearing within the target range at 23.8% 1 • Mirvac remains compliant wit
Slide 10: Additional information
additional For personal use only information by mirvac by mirvac artist impression of Yarra’s Edge, docklands, development VIC projects update 7 february 2013 page 9
Slide 11: Net realisable value
net realisable value For personal use only • Mirvac undertakes comprehensive and regular reviews of the carrying value of Inventories and JV and Associates. Inventory is required to be carried at the lower of cost and Net Realisable Value (“NRV”). NRV for the purposes of inventories provision is the
Slide 12: Capitalised interest policy
capitalised interest policy For personal use only • Mirvac assesses and allocates capitalised interest on a stage-by-stage basis within a project and accounts for the stage separately (not project wide) • Mirvac allocates interest to stages by the gross value of WIP irrespective of whether the proje
Slide 13: Hypothetical profit making development project - treatment of capitalised costs
Hypothetical Profit Making Development Project — Treatment of Capitalised Costs For personal use only Project Metrics Total Sales revenue 120 Land (20) Cost of property development and construction (60) Sales & marketing expenses (10) Interest costs (10) Total project return 20 Cash Flow Year 1 Year
Slide 14: Hypothetical provisioned development project - treatment of capitalised costs
Hypothetical Provisioned Development Project — Treatment of Capitalised Costs For personal use only Project Metrics Total Sales revenue 100 Land (25) Cost of property development and construction (50) Sales & marketing expenses (10) Interest costs (25) Total project return (10) This is the same proj
Slide 15: Glossary
glossary Term Meaning For personal use only COGS Cost of Goods Sold CPSS Cents Per Stapled Security DPS Distribution Per Stapled Security EBIT In the current reporting period, Mirvac has revised its definition of Earnings Before Interest and Taxes (EBIT). Mirvac considers interest income from joint
Slide 16: Disclaimer and important notice
disclaimer and important notice For personal use only Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Mirvac Property Trust ARSN 086 780 645. This presentation (“Presentation”) has been prepared by Mirvac Limited and Mirvac Funds Limited (ABN 70 002 561 640, AFSL number 233121) as the r