Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2019 Earnings Presentation
66 slides from Far East Consortium International's earnings presentation, June 2019
Slide 1: FY2019 Annual Results
FY2019 Annual Results June 2019 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by Far East Consortium International Limited (the “Company”) solely for information purposes. By accepting this document, you agree to maintain absolute confidentiality regarding the information disclosed in this document. This document does not constitute
Slide 3: Table of Contents
Table of Contents Page 1. FY2019 Annual Results Summary 4-20 2. Review of Operations 21-48 3. Prospects 49-55 4. Appendices 56-66 3
Slide 4: 1. FY2019 Annual Results Summary
1. FY2019 Annual Results Summary The Star Residences, Gold Coast 4
Slide 5: FY2019: Key Achievements
FY2019: Key Achievements FEC’s Strategic Positioning to Become a Pre-eminent International Real Estate Specialist with Strong Hospitality DNA Targeting the “Asian Wallet” Yielding Encouraging Results BC Group restructured with new funding resources. Synergistic Land resources to residential sales re
Slide 6: Long-term Growth Track Record Supported by Clear Strategy
Long-term Growth Track Record Supported by Clear Strategy 10-Year CAGR : Total revenue: 14.7% Net profit attr. to shareholders : 34.9% HK$’M 8,000 Property 6,842 development 7,000 5,831 Hotel operations and 6,000 Recurring management 5,110 5,005 cash 5,000 +26.3% flow Car park operations 4,066 3,995
Slide 7: FY2019: Resilient Performance with Defensive Growth
FY2019: Resilient Performance with Defensive Growth FY2019 FY2018 YoY Revenue (HK$’M) 6,842 5,831 +17.3% Gross profit (HK$’M) 2,610 2,634 -0.9% Net profit attributable to shareholders (HK$M) 1,714 1,567 +9.4% Core cash profit(1) 1,457 1,329 +9.6% EPS (HK cents) - Basic & Diluted 74.0 69.0 +7.2% DPS
Slide 8: High Quality Core Cash Profit
High Quality Core Cash Profit HK$’M FY2019 FY2018 % change Net profit attributable to shareholders 1,714 1,567 +9.4% Adjustments: Gain on investment property revaluation (post tax) (548) (267) Gain on bargain purchase of TWC (108) - Depreciation and amortization 399 349 Adjusted cash profit(1) 1,457
Slide 9: GP Margin Stays Healthy
GP Margin Stays Healthy FY2019 FY2018 Gross profit Gross profit Gross profit Gross profit Revenue Revenue (after depreciation) (before depreciation) (after depreciation) (before depreciation) HK$ M HK$ M Margin % HK$ M Margin % HK$ M HK$ M Margin % HK$ M Margin % Property development 3,811 1,356 35.
Slide 10: Consistent Dividend Policy Supported by Long Term NAV/Share Growth
Consistent Dividend Policy Supported by Long Term NAV/Share Growth 10-Year NAV CAGR : 10.9% 10 Year DPS CAGR: 22.0% 13.29 12.41 22.0 22.0 10.79 18.5 9.79 9.12 9.02 16.0 16.0 8.45 15.0 13.0 6.70 5.84 6.00 4.73 7.0 6.0 6.0 3.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FY09 FY10 FY11 FY12
Slide 11: Share Buyback
Share Buyback • Targeting up to HK$200M in FY2020 Total number of shares Total increase in shares Total number of shares buyback by the Group for Total value of shares buyback through scrip dividend by purchased by substantial by the Group for FY2019 substantial shareholder for FY2019 shareholder fo
Slide 12: Property Development: A Busy Year
Property Development: A Busy Year Manchester New Launch: MeadowSide (Plot 5) New Land: Victoria Riverside, Addington Street Obtained master planning of Northern Gateway Shanghai New Land: Baoshan District site London New Launch: Hornsey Town Hall Guangzhou Completed: Royal Riverside (Towers 1 – 4)#
Slide 13: Hotel: Encouraging Growth Driven by Overall RevPAR Growth and Room Additions
Hotel: Encouraging Growth Driven by Overall RevPAR Growth and Room Additions FY2019 Hotel Revenue: HK$1,818M Revenue HK$’M TWC Continental 133 Europe Hong Kong 8% 38% Dorsett Mainland Residences Sales China HK$498M 18% Self-owned Hotel Rooms Dorsett 1,785 as at 31.3.2019 1,685 Australia 1,454 1,285
Slide 14: Car Park: Organic Growth and Regional Diversification
Car Park: Organic Growth and Regional Diversification Revenue Managed Car Parks HK$’M New Zealand 720 9,571 UK 2,475 666 494 car parks 641 99,143 car parking bays Malaysia 623 7,199 613 616 +10,275 bays YoY Hungary Australia 1,866 78,032 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 14
Slide 15: Gaming and Entertainment: New Income Contributor
Gaming and Entertainment: New Income Contributor • HK$259M (net of gaming tax) in total revenue derived from gaming operations QWB Integrated TWC The Star Resort • Completed acquisition • Completed 4.99% • Completed demolition of TWC equity subscription with site excavation substantially • HK$197M g
Slide 16: Well Balanced Portfolio
Well Balanced Portfolio Diversification allows FEC to take advantage of property cycles in different countries Total Assets by Geography(1) Total Assets by Business Segment(1) Singapore Hotel operations Car park operations Treasury & others 13% & management & facilities 11% UK & Continental 48% mana
Slide 17: Suitably Geared Up to Support Future Growth
Suitably Geared Up to Support Future Growth • Additional borrowing for land purchases and business acquisitions 31.3.2019 31.3.2018 HK$'M HK$'M Bank loans, notes and bonds 21,367 16,372 Investment securities 4,422 3,520 Bank and cash balances (1) 2,648 4,591 Liquidity position 7,070 8,111 Net debts(
Slide 18: Healthy Overall Credit Profile Despite Investment Phase in Certain Large Projects
Healthy Overall Credit Profile Despite Investment Phase in Certain Large Projects Liquidity Position and Total Assets(1) Net Gearing(2) HK$’M Cash & investment securities Total Assets 57,000 45.4% 50,082 41,754 31.5% 28.7% 5,628 8,111 7,070 31.3.2017 31.3.2018 31.3.2019 31.3.2017 31.3.2018 31.3.2019
Slide 19: Balanced Debt Profile Mix
Balanced Debt Profile Mix • Natural currency hedge • Over 27% of debt related to construction supported by pre-sales Currency profile of borrowings 0.4% 41.7% 14.9% 19.4% 2.6% 4.1% 16.4% 0.4% HKD AUD SGD RMB MYR GBP USD EUR Maturity profile of borrowings 19.9% 19.5% 59.9% 0.7% Due within 1 year Due
Slide 20: Substantial War Chest
Substantial War Chest • Existing war chest of Liquidity position 7,070 HK$16.1bn (cash position and Others 93 undrawn facilities) far exceeds the Pre-sales Land committed capex of 14,614 replenishment QWB HK$2.0bn 342 645 • Pre-sales provides a Undrawn banking clear vision of future facilities - cor
Slide 21: 2. Review of Operations: Property Development
2. Review of Operations Property Development The Towers at Elizabeth Quay, Perth, Australia 21
Slide 22: Strong Pipeline
Strong Pipeline Cumulative Attr. Pre-sales Expected Attr. GDV of Pipeline (HK$’M) (HK$’M) UK, 579 , Singapore, Hong Kong, 4% 1,165 , 8.0% 4,291 , 8.4% China, 1,813 , 3.5% Hong Kong, 1,057 , 7.2% UK, 14,141 , 27.6% Australia, Singapore, 6,467 , 12.6% Australia, 11,813 , 80.8% 24,429 , 47.7% Malaysia,
Slide 23: Total attributable GDV: HK$15.4bn
Expected New Launches Under Preparation Hong Kong Australia UK Singapore • Shatin Heights • The Star • Consort Place, • Holland Road Residences – London • Cuscaden Road Epsilon, Gold Coast# • Northern Gateway - • Queen’s Wharf Addington Street, Brisbane (Tower 4) Manchester • Bourke Street, Melbourn
Slide 24: Manchester: Northern Gateway Master Planning Approved
Manchester: Northern Gateway Master Planning Approved First Major Milestone Strategic Regeneration Framework (SRF) approved by the Council in February 2019 First Phases of the Scheme •530 family homes and first-time buyer apartments in the Collyhurst Village neighbourhood commencing in 2020 •More th
Slide 25: The Towers at Elizabeth Quay, Perth: Full Completion Soon
The Towers at Elizabeth Quay, Perth: Full Completion Soon 25
Slide 26: West Side Place, Melbourne: One of Best-Selling Projects in Australia
West Side Place, Melbourne: One of Best-Selling Projects in Australia West Side Place, Tower 2 West Side Place West Side Place 26
Slide 27: The Star Residences, Gold Coast: Moving on to Tower 2
The Star Residences, Gold Coast: Moving on to Tower 2 27
Slide 28: Consort Place: A Mixed-use Development Site in London
Consort Place: A Mixed-use Development Site in London 28
Slide 29: Hong Kong Projects completing in FY2020
Hong Kong Projects completing in FY2020 Astoria Crest, Sham Shui Po The Garrison, Tai Wai Astoria Crest, Sham Shui Po The Garrison, Tai Wai 29
Slide 30: Artra – Construction Progressing as Planned
Artra – Construction Progressing as Planned 30
Slide 31: 2. Review of Operations: Hotel Operations & Management
2. Review of Operations Hotel Operations & Management 31 Dorsett City Hotel, London, United Kingdom
Slide 32: One of Asia’s Fastest-Growing Hotel Group
One of Asia’s Fastest-Growing Hotel Group (2) 114,000 + (1) 28 7,472 15 4 DORSETT – YOUR REWARDS LOYALTY PROGRAMME PROPERTIES TOTAL ROOMS CITIES WORLDWIDE CORE BRANDS MEMBERS (1) Includes Sheraton Mirage which is 25% owned (2) launched in 2018 Q4 and membership number as of 31 March 2019 Elizabeth Q
Slide 33: Dorsett: Strong Operating Performance with RevPAR Growth
Dorsett: Strong Operating Performance with RevPAR Growth Mainland China Dorsett Group Hotel Revenue United Kingdom 411 408 398 (HK$’M) 99 106 118 97 279 87 88 289 251 Mainland China, 263, 16% United Kingdom, 253, 15% FY2017 FY2018 FY2019 FY2017 FY2018 FY2019 Average room rate (RMB) Average room rate
Slide 34: Significant Hidden Value in Hotel Portfolio
Significant Hidden Value in Hotel Portfolio • HK$17.8bn of revaluation surplus not reflected on Balance Sheet HK$bn 30.0 26.3 25.0 22.8 20.0 20.4 18.3 18.2 18.2 17.9 17.0 16.3 17.8 15.0 15.6 11.7 13.4 11.0 7.7 11.0 11.0 10.7 9.5 10.0 10.4 6.0 5.0 5.0 9.3 7.2 7.3 7.2 7.2 7.3 8.5 6.9 7.1 5.4 5.7 - 200
Slide 35: Clear Hotel Pipeline Targeting “Asia Wallet”
Clear Hotel Pipeline Targeting “Asia Wallet” As at 31.3.2019 As at 31.3.2024 7,472 (1) 10,707 (1) owned hotel rooms owned hotel rooms Continental Continental Europe Europe 572 572 8% 5% Mainland China 1,366 Hong Kong Mainland China 13% 2,867 1,366 Hong Kong 27% 18% 2,867 38% Australia Australia 295
Slide 36: Hotel Growth Path
Hotel Growth Path 50:50 JV with Ritz-Carlton Melbourne, The Star Dorsett Shepherds in Sydney Bush London extension and Dorsett Gold Coast commenced New loyalty construction programme with>114,000 members Queen’s Wharf, Brisbane site works 28 well underway Hotels in operation + 15 Full year Pipeline
Slide 37: Ritz-Carlton Perth Scheduled to Open in 2H FY2020
Ritz-Carlton Perth Scheduled to Open in 2H FY2020 • 205 guest rooms together with 379 residential apartments • Located at Elizabeth Quay, a landmark waterfront development that connects Perth city with the Swan River to create a dynamic new entertainment and leisure precinct • FEC’s first developmen
Slide 38: New Hotels Under Construction
New Hotels Under Construction Ritz-Carlton, Melbourne Dorsett Hotel, Gold Coast Dorsett Shepherds Bush II, London Hornsey Town Hall, London 38
Slide 39: 2. Review of Operations: Car park operations & facilities management
2. Review of Operations Car park operations & facilities management 39
Slide 40: Growth Supported by Australian & Europe Regional Expansion
Growth Supported by Australian & Europe Regional Expansion As at 31/3/2019 As at 31/3/2018 No. of No. of No. of Bays No. of Bays Car Park Car Park Australia Owned and managed 22 4,038 23 4,073 Managed only 404 73,611 362 68,102 99,143 Joint Venture owned(1) 1 383 1 383 88,868 New Zealand Owned and m
Slide 41: Care Assist – Deploying Car Park Management Technology
Care Assist – Deploying Car Park Management Technology 41
Slide 42: Steadily Growing Facilities Management Services
Steadily Growing Facilities Management Services OWNERS STUDENT SERVICES SHOPPING CENTRE BUILDING CORPORATION ACCOMODATION MANAGEMENT MANAGEMENT MANAGEMENT RESIDENTIAL PROJECT PROPERTY MANAGEMENT APM PROPERTY MANAGEMENT PROPERTY SETTLEMENT SERVICES CLEANING SERVICES SERVICES CONCIERGE SERVICE PROPERT
Slide 43: 2. Review of Operations: Gaming and Entertainment
2. Review of Operations Gaming and Entertainment Queen’s Wharf Brisbane, Australia 43
Slide 44: New Contribution from TWC
New Contribution from TWC • Growth expected with new 11 months ended/as at 31 March 2019 initiatives Revenue(1) (HK$’M) 197 Revenue per slot machine per day (HK$) 1,219 • Introduction of baccarat rolling program and Poker Table game win rate(2) 17.2% No. of slot machines 513 • Asian premium customer
Slide 45: Strategic Alliance with The Star
Strategic Alliance with The Star Existing co-operations: Queen’s Wharf, Brisbane The Star Gold Coast Precinct The Star Sydney Sheraton Grand Mirage, Gold Coast Two residential and hotel towers One landmark residential World-class integrated resort and three additional new towers and hotel tower adja
Slide 46: Queen’s Wharf Brisbane Casino Expected to Open in Late 2022
Queen’s Wharf Brisbane Casino Expected to Open in Late 2022 Queen’s Wharf, Brisbane FEC’s stake: 25% Hotels/Retail/Casino 3Q 2019 2021 2Q 2019 2020 Complete Commence Late 2022 2023 Commence Construction excavation Casino opening Full foundations progresses above internal fit-out of Commence Integrat
Slide 47: 2. Review of Operations: Mortgage Platform
2. Review of Operations Mortgage Platform 47 Queen’s Wharf Brisbane
Slide 48: BC Group: Mortgage Finance Platform
BC Group: Mortgage Finance Platform • Fast growing international mortgage lending platform • Synergistic to the Group’s property development business Specialist ➢ An Australian Credit Licence holder to provide in non- Australian regulated loans to residential property residents buyers mortgage • Imp
Slide 49: 3. Prospects
3. Prospects Concept of the Ritz-Carlton Sydney, Australia 49
Slide 50: Positioning for the Next Growth Phase
Positioning for the Next Growth Phase • Total residential pipeline for sale of over HK$50 billion • Additional recurring revenue growth from new hotels Clear • Car Park organic growth Visibility • Gaming synergetic growth • New business contribution (Queens Wharf Brisbane, BC Group, etc.) Clear Busi
Slide 51: Our Strategy
Our Strategy Pursue “Asian Wallet” strategy Deepen regional LEADER in providing diversification/local execution overseas property investment, hospitality and Focus on cities with strong entertainment population growth services to the Asia’s middle class Extract synergies from operations Prudent fina
Slide 52: Driving higher return on equity / return to shareholders
Driving higher return on equity / return to shareholders Options: Reallocate capital resources to Suitably gearing up drive higher return Unlocking Setting trust platform for income significant generating asset class such as car surpluses in Share buyback parks /hotels property portfolio Outright mo
Slide 53: FY2020 Outlook
FY2020 Outlook • Total pre-sales of HK$14.6 billion to be booked in coming 3 to 4 years • 15 hotels under construction • 8 new planned launches with total • Ritz-Carlton Perth opening in 2H attributable GDV of HK$15.4 billion 2020 • long term rental operating Property Hotel business in Shanghai Deve
Slide 54: Strengthen Sustainable Development Governance
Strengthen Sustainable Development Governance Our core strengths： • Property Development: Incorporate • Ensured service quality waste management considerations • Strong governance mechanism and green building design into development project • Engage a diverse workplace • Positive social impacts • Ho
Slide 55: Corporate Governance and Corporate Social Responsibility
Corporate Governance and Corporate Social Responsibility Organization Winning awards Name of awards Best use of multimedia for IR IR Magazine IR Magazine Awards – Greater China 2018 Best in sector: real estate The Asset The Asset Corporate Awards 2018 Platinum Award The Asian Excellence Award 8th As
Slide 56: 4. Appendices
4. Appendices 56 Pool View of The Star Residences, Gold Coast
Slide 57: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Projects under presale Location Cumulative presales Expected attr. SFA(1) Expected attr. GDV(1) Expected Cumulative presale @31.3.2019 (HK$ M) (sq. ft.) (HK$ M) Completion(2) as % of GDV Notes 1 The Towers at Elizabeth Quay (3) Perth 1,619 306,000 2,224 FY2020
Slide 58: Pre-sales Hit A Record High
Pre-sales Hit A Record High HK$5.8bn of pre-sales recorded HK$M Cumulative attributable contracted pre-sales as at 31.3.2018 13,374 Adjustment to opening balance as a result of accounting rule change (292) During FY2019: - Pre-sales contracted during the year 5,796 - Pre-sales contracted for complet
Slide 59: Strong Revenue Growth Across All Divisions
Strong Revenue Growth Across All Divisions Supported by recent acquisitions / investments and organic growth HK$M FY2019 FY2018 YoY change Recurring revenue Hotel operations 1,818 1,538 +18.2% - Dorsett Group 1,685 1,538 +9.5% - TWC Hotel Group 133 - N/A Car park operations 720 666 +8.1% Gaming oper
Slide 60: Strong Hotel Operating Performance
Strong Hotel Operating Performance Dorsett Group FY2019 FY2018 YoY change Hong Kong Occupancy rate 95.3% 93.8% +1.5 ppts Average room rate (HK$) 802 739 +8.5% RevPAR (HK$) 764 693 +10.2% Malaysia Occupancy rate 74.7% 73.9% +0.8ppts Average room rate (MYR) 194 193 +0.5% RevPAR (MYR) 145 142 +2.1% Mai
Slide 61: Significant Hidden Value in Hotel Portfolio
Significant Hidden Value in Hotel Portfolio Capital Value Book Value Revaluation City / Country Description Rooms (1) Acquisition completed @ 31.3.2019 @ 31.3.2019 Surplus Hong Kong on 30.4.2018 1 Dorsett Wanchai Hong Kong Near Wanchai and Causeway Bay 454 4,000 316 3,684 2 Cosmo Hotel Hong Kong Hon
Slide 62: Track Record of Extracting Value from Hotel Development
Track Record of Extracting Value from Hotel Development Flexible Capital Deployment Provide additional cash flows to enable the Group to redeploy its resources to FY 2018 Silka West Kowloon other investment opportunities Disposal Date: May 2017 Sold Price: HK$450 million 141 Rooms Return On Investme
Slide 63: Details of Investment Properties
Details of Investment Properties Current Investment Properties Total Pipeline Investment Properties Total GFA (sq. ft.) GFA (sq. ft.) (1) FEC Building, Central, Hong Kong 3,000 West Side Place, Melbourne 69,300 FEC Building, Nathan Road, Hong Kong(1) 38,200 Queen’s Wharf Brisbane - residential (2) 3
Slide 64: Foreign Exchange Movement Analysis
Foreign Exchange Movement Analysis Rates 31-Mar-19 31-Mar-18 Change Average FY2019 FY2018 Change rates for HKD/AUD 5.56 5.99 -7.2% HKD/AUD 5.78 5.96 -3.0% HKD/RMB 1.17 1.25 -6.4% HKD/RMB 1.21 1.19 1.7% HKD/MYR 1.92 2.03 -5.4% HKD/MYR 1.98 1.89 4.8% HKD/GBP 10.20 11.02 -7.4% HKD/GBP 10.61 10.35 2.5%
Slide 65: Australian Casinos Comparison
Australian Casinos Comparison City Sydney Melbourne Brisbane Gold Coast Perth Adelaide Darwin City population(‘000)(2018 June) 5,230 (+1.8% yoy) 4,963 (+2.5% yoy) 2,463 (+2.1% yoy) 622 (+2.6% yoy) 2,059 (+1.1% yoy) 1,346 (+1.0%) 149 (-0.2% yoy) State/territory New South Wales Victoria Queensland Que
Slide 66: Thank You
Thank You Questions & Answers FEC Official WeChat 66
Far East Consortium International — FY2019 Earnings Presentation on 6ix