Rural Funds Group · ASX:RFF
Rural Funds — Non-Deal Roadshow (May 2017)
28 slides from Rural Funds's roadshow presentation, May 8, 2017
Slide 1: Asia Investor Roadshow May 2017
Managed by: For personal use only Asia Investor Roadshow May 2017 Managed by:
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).
Slide 3: Agenda
Managed by: Agenda For personal use only RFM presenter 1. The manager James Powell Investor Relations & Distribution Manager 2. Portfolio and performance jpowell@ruralfunds.com.au +61 4 2027 9374 3. Strategy 4. Portfolio updates and conclusion 5. Appendices 3
Slide 4: The manager
1 For personal use only Managed by: The manager Baled raw cotton on 'Lynora Downs' Queensland, ready for delivery to Qld Cotton for ginning, March 2017
Slide 5: Rural Funds Management
Managed by: Rural Funds Management RFM is a fund and farm manager with 20 years experience in Australian agriculture For personal use only Key information Board and management team contacts Established 1997 Assets under management $608m Ownership Directors & staff Rural Funds Group: $552m Guy Paynte
Slide 6: Portfolio and performance
2 For personal use only Managed by: Portfolio and performance Geier Vineyard, Barossa Valley, Dec 2016
Slide 7: Rural Funds Group (RFF)
Managed by: Rural Funds Group (RFF) RFF is an ASX-listed REIT which owns a diversified portfolio of high quality Australian agricultural assets For personal use only Key information as 31 December 2016 Forecasts Adjusted total assets1 $552.4m FY17 AFFO per unit 12.42 cents Adjusted net assets1 $311.
Slide 8: Portfolio snapshot
Managed by: Portfolio snapshot1 A growing, diversified portfolio of assets and lessees For personal use only Notes: 1 Shaded areas denote different climatic zones. Source: Bureau of Meteorology (BOM). Valuations at 31 December 2016 include water entitlements held at fair value, independent valuation
Slide 9: RFF trading performance
Managed by: RFF trading performance RFF’s trading price remained resilient through rises in interest rates in late 2016, and has outperformed the S&P/ASX A-REIT Index by 14% since the beginning of January 2016 For personal use only RFF trading price vs. S&P/ASX 300 A-REIT Index and 10 year Governmen
Slide 10: Strategy
3 For personal use only Strategy Managed by: Poultry Farm 67, Griffith, Dec 2016
Slide 11: Strategy
Managed by: Strategy Diligent management of existing assets and examination of growth opportunities For personal use only Sector diversification • RFM will continue to execute on strategy: – focusing on existing portfolio; and – expanding scale through selective acquisitions • The purpose of this st
Slide 12: Diversification
Managed by: Diversification RFM will continue to assess acquisition opportunities which improve diversification and scale For personal use only FY15: revenue $22.3m2 FY16: revenue $26.6m2 FY17f: revenue $41.7m2 Lessees: 6% 8% 2% 5% RFM Poultry (NSX: RFP) 7% 12% 25% Olam Orchards Australia 14% 2% RFM
Slide 13: Distribution growth target
Managed by: Distribution growth target RFF’s conservative AFFO payout ratio supports investment into growth assets, which are natural resource predominant, whilst maintaining the DPU growth target of 4% per annum For personal use only DPU and AFFO payout ratio 15.0 40% • Distribution growth of 4% pe
Slide 14: Portfolio updates and conclusion
4 For personal use only Managed by: Portfolio updates and conclusion Mooral almond orchard, Hillston, Dec 2016
Slide 15: Development and other capex
Managed by: Development and other capex Development and other capex attracts additional lease income1 For personal use only Development and capex timetable6 Total 1H17 2H17 FY18 FY19 FY20 ($m) Almonds: Kerarbury Development 2,500 ha orchard2 $23.7 $18.4 $31.1 $13.7 $26.9 $113.8 Almonds: Tocabil Deve
Slide 16: Almond developments
Managed by: Almond developments Tocabil and Kerarbury almond developments progressing, contributing to NAV and AFFO growth For personal use only 2015 Tocabil plantings 2016 Kerarbury plantings 600 ha planting complete CY16 (planted in two stages). Tree development is 1,218 ha of almond trees planted
Slide 17: Cattle capex
Managed by: Cattle capex RFF is funding capex with the aim of improving asset values and performance For personal use only Fig 1: Cattle property capex • Capex (forecast $1.5m) is being deployed for watering infrastructure and pasture Rewan, Central Qld Mutton Hole, Gulf improvements (Fig 1). Design
Slide 18: Other capex and investment
Managed by: Other capex and investment RFF is funding capex with the aim of improving asset values and performance For personal use only Lynora Downs (cotton property) • Cotton property - Stage 1 development (forecast capex $5.8m): – increase the water storage capacity and expand the area for irriga
Slide 19: Conclusion
Managed by: Conclusion For personal use only • RFF is an agricultural REIT designed to generate stable rental income and capital growth from a portfolio of quality agricultural assets • DPU growth target of 4% per annum, supported by a low AFFO payout ratio (forecast 78% FY17) and structured rental
Slide 20: Appendices
5 For personal use only Managed by: Appendices Tocabil almond orchard, Hillston, Dec 2016
Slide 21: HY17 results summary
Managed by: HY17 results summary Acquisitions, developments and rent indexation have improved key metrics Metrics as at 31 December 2016 For personal use only • Total comprehensive income $19.8m up Income Net profit before income tax 17,533,000 from $4.9m (at 31 Dec 15) primarily due to: Total compr
Slide 22: Key assets and counterparts
Managed by: Key assets and counterparts Counterparts include ASX listed agricultural companies and major food processors For personal use only Almond orchards Poultry farms Vineyards Cattle Assets Cotton Assets Brief 1,814 ha mature almond 154 sheds on 17 farms 666 ha mature vineyards Three cattle p
Slide 23: Key assets and leases further details
Managed by: Key assets and leases further details Property leases are largely triple net in nature For personal use only Almond orchards Poultry farms Vineyards Cattle assets Cotton assets Description: 1,814 ha across two mature 154 sheds on 17 farms Seven vineyards with 666 ha Three cattle properti
Slide 24: Agricultural REIT structure
Managed by: Agricultural REIT structure RFF’s REIT model benefits from trends supporting agriculture and has significant expansion potential in Australia For personal use only Australian property sectors estimates1 Macro economic trends supporting agriculture: $150b, est. up to 15% leased2 $280 b,
Slide 25: Sector diversification
Managed by: Sector diversification Acquiring natural resource predominant assets complements existing infrastructure predominant assets and aims to grow NAV, FFO and DPU over medium to long term For personal use only Spectrum of investment opportunities1 Note: 1 The income and growth figures present
Slide 26: Climate diversification strategy
Managed by: Climate diversification strategy Geographic diversification reduces lessee concentration in any one climatic zone and introduces new commodities and counterparts For personal use only The benefits of climatically diversifying RFF’s portfolio include1: Climatic zones and RFF assets2 ‒ M
Slide 27: Productivity capex
Managed by: Productivity capex Productivity capex aims to increase farm values, lease income and counterpart profitability For personal use only • Gains in farming productivity (e.g. via 125 yrs of agricultural returns (10yr moving avg of % price change)1 technology or science) have historically sup
Slide 28: Corporate information
Managed by: Corporate information For personal use only Rural Funds Management Ltd ACN 077 492 838 AFSL 226701 Head Office Level 2, 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: www.ruralfunds.com.au For further information: For media enquiries: For Inv