Cromwell Property Group · ASX:CMW
Cromwell Property — H1 2013 Earnings Presentation
33 slides from Cromwell Property's earnings presentation, Feb 14, 2013
Slide 1: 1H13 Results Presentation
For personal use only 1H13 Results Presentation 14 February 2013 Cromwell Property Group – 1H13 Results 1
Slide 2: Important Information & Disclaimer
Important Information & Disclaimer For personal use only This presentation including its appendices (“Presentation”) is advice as they deem necessary or consider appropriate for in respect of Cromwell Property Group stapled securities is dated 14 February 2013 and has been prepared by the their part
Slide 3: Section 1: 1H13 Financial Results
For personal use only Section 1 1H13 Financial Results Cromwell Property Group – 1H13 Results 3
Slide 4: Key Financial Results
1H13 RESULTS Key Financial Results For personal use only Statutory accounting profit of $29.5m Significant improvement from 1H12 loss Operating profit1 increased by 24% to $45.9m (3.8 cps) Derived 98% from property portfolio Increase in like for like property income of 3.8%2 over 1H12 Av
Slide 5: Statutory Financial Results
1H13 RESULTS Statutory Financial Results For personal use only Fair value decrease of investment properties of $11.5m CPF adjustment of $2.7m related to increase in Cromwell security price prior to financial close of merger Underlying decrease in value1 of 0.4% of portfolio Key underlying va
Slide 6: Financial Position
FY13 1H RESULTS Financial Position For personal use only Growth in asset base from acquisition Jun-12 Dec-12 Dec-12 of CPF Portfolio ($168.4m) Actual Actual Pro-forma2 ($’000) ($’000) ($’000) NTA increased from $0.67 at June Assets 2012 to $0.68 per security Cash and Cash Equivalents 59,153 140,
Slide 7: Debt Facilities
CAPITAL MANAGEMENT Debt Facilities For personal use only Diversified across 7 facilities with varying maturity dates Preliminary discussions to extend the May 2014 maturing debt facility have commenced Lenders comprise major Australian banks and one offshore bank Cromwell is actively perusin
Slide 8: Interest Rate Hedging Extended
CAPITAL MANAGEMENT Interest Rate Hedging Extended For personal use only Took advantage of recent market lows to extend swap profile and Weighted average swap term of 2.9 years lower cost of debt High degree of certainty over interest 94% hedged for FY13 at 4.4% plus margins expense in 2H13 a
Slide 9: Placement and SPP provide capacity for growth
OUTLOOK Placement and SPP provide capacity for growth For personal use only Completed $143m Institutional Placement in December 2012 Materially oversubscribed Redefine maintained holding of approximately 27% Completed Security Purchase Plan in February 2013 Significant demand with $39m iss
Slide 10: Property Portfolio
For personal use only Section 2 Property Portfolio Cromwell Property Group – 1H13 Results 10
Slide 11: Property Portfolio
INVESTMENT PORTFOLIO Property Portfolio1 For personal use only Geographic Diversification2 Sector Diversification2 Tenant Classification2 4.5% 4.1% 15.6% 39.3% 23.4% 25.0% VIC TAS Retail Government Authority SA 1.4% Commercial 1.6% QLD Listed Industrial Company/Subsidiary NSW 20.4% ACT Private Compa
Slide 12: Continuing Portfolio Improvement
INVESTMENT PORTFOLIO Continuing Portfolio Improvement For personal use only WALE of 6.0 years one of the longest in the sector Weighted Average Cap Rate (WACR) by Sector WACR increased slightly to 8.39% from 8.28% Sector Jun-12 Dec-122 15 bps expansion due to CPF acquisition Commercial 8.22% 8
Slide 13: Attractive Lease Expiry Profile
INVESTMENT PORTFOLIO Attractive Lease Expiry Profile Average of only 8.8% lease expiry FY14 – FY16 For personal use only Minimal exposure to current soft leasing market 100 Waymouth Street $12m refurbishment to be completed by March 2013 Agreement for lease signed for 15 years over 25% of th
Slide 14: Funds Management
For personal use only Section 3 Funds Management Cromwell Property Group – 1H13 Results 14
Slide 15: Funds Management – Organic Growth
GROWTH Funds Management – Organic Growth Funds Management Summary For personal use only Number of Fund Investors Total Assets Properties Ongoing Fees Cromwell Box Hill Trust1 Retail $117m 1 0.60% Cromwell Riverpark Trust Retail $197m 1 0.60% Cromwell Ipswich City Heart Trust1 Retail $93m 1 0.60% Cro
Slide 16: Cromwell Box Hill Trust
GROWTH Cromwell Box Hill Trust For personal use only The unlisted Box Hill Trust is building on the momentum of the Ipswich City Heart Trust, which closed early and oversubscribed $67m unlisted equity raise from retail investors launched in December 2012 Attractive offering given initial yield
Slide 17: Strategy & Outlook
For personal use only Section 4 Strategy & Outlook Cromwell Property Group – 1H13 Results 17
Slide 18: Strategy
OUTLOOK Strategy For personal use only Provide defensive, superior risk adjusted returns from a 100% Australian portfolio CROMWELL’S Invest in high quality office assets in predominantly CBD / core fringe markets STRATEGY Seek assets which offer the potential for superior returns through activ
Slide 19: Peer Comparison
OUTLOOK Peer Comparison For personal use only Cromwell offers superior yields and growth compared to its peer group 110bps premium to average FY13 EPS yield of peer group 200bps premium to average FY13 DPS yield of peer group Focus on long-term leases and quality tenants represents best risk-a
Slide 20: Funds management distribution base growing
OUTLOOK Funds management distribution base growing Cromwell securityholders For personal use only Over 13,000 retail investors, many of whom invested in our products Retail Direct Property Trusts originally and continue to do so Retail investor database Over 22,000 prequalified potential inv
Slide 21: Future Growth Drivers
OUTLOOK Future Growth Drivers For personal use only Cromwell is set to benefit significantly from a number of organic growth factors Average fixed property rental growth of 3.8% for FY13 Underpins property income in current soft market Growth in earnings from increased activity in funds manage
Slide 22: Property Portfolio
OUTLOOK Property Portfolio For personal use only Yield is in demand – and property yield premiums to bond rates are at historic highs Australian 10 year bonds are currently near historic lows despite the relatively strong underlying economy Australian interest rates are also near all time lows
Slide 23: Earnings and Capital Management
OUTLOOK Earnings and Capital Management Operating earnings expected to be at least 7.5 cps in FY13, 8.3% yield1 For personal use only Growth in property income in FY13 partially offset by 100 Waymouth Street refurbishment Increase in funds management income expected Continued focus on maximi
Slide 24: Contacts
Contacts For personal use only Paul Weightman Cromwell Property Group Chief Executive Officer Level 19, 200 Mary Street Ph: +61 7 3225 7720 Brisbane QLD paul.weightman@cromwell.com.au Phone: +61 7 3225 7777 Facsimile: +61 7 3225 7788 Daryl Wilson WWW.CROMWELL.COM.AU Director – Finance & Funds Manage
Slide 25: Appendix: Additional Information
For personal use only Appendix Additional Information Cromwell Property Group – 1H13 Results 25
Slide 26: Cromwell Property Portfolio
Cromwell Property Portfolio For personal use only Collins St, VIC Exhibition St, VIC Qantas HQ, NSW HQ North, QLD 475 Victoria Avenue, NSW Synergy, QLD Cromwell Property Group – 1H13 Results 26
Slide 27: Qantas Global Headquarters, Mascot, NSW
Qantas Global Headquarters, Mascot, NSW For personal use only Since acquisition Cromwell has agreed with Qantas Lease extension to 2032 A $131m refurbishment and expansion programme Average return on cost of 8.7% expected in first financial year after completion Debt facility in place to f
Slide 28: Property Portfolio – Key Assets
Property Portfolio – Key Assets1 For personal use only Top 10 assets account for 75% of portfolio with occupancy of 99% and a WALE of 6.4 years CMW Top 10 Property Assets Asset State Class Book Value Cap Rate Occupancy WALE Major Tenants Review Qantas Global Headquarters NSW Office $232.0 M 7.25%
Slide 29: Property Portfolio – Top tenants
Property Portfolio – Top 20 tenants For personal use only Top 20 tenants account for 73.5% of our portfolio rental income CMW Top 20 Tenants % of Total Portfolio Tenant Building Tenant Classification Rental Income Commonwealth of Australia Dept of FaHCSIA Tuggeranong Office Park Government 11.1% O
Slide 30: Property Portfolio – Net Property Income
Property Portfolio – Net Property Income For personal use only Like for like income growth 1H12 1H13 Sales, Purchases and Other 1H12 1H13 ($’000) ($’000) Variance ($’000) ($’000) Variance Office1 Tuggeranong Office Park, Greenway ACT 9,552 9,991 4.6% Purchases HQ North Fortitude Valley QLD2 406 8,49
Slide 31: Reconciliation Operating and Statutory Profit
1H13 Reconciliation Operating and Statutory Profit For personal use only 1H12 1H12 1H13 1H13 (cents per (cents per ($’000) security) ($’000) security) Profit from operations 36,978 3.8 45,924 3.8 Fair value adjustments/write-downs: Investment properties (14,225) (1.4) (11,529) (1.0) Interest rate de
Slide 32: Balance Sheet
Balance Sheet For personal use only Jun-12 Dec-12 Dec-12 A$m Actual Actual Adjustments Pro-Forma Assets Cash and Cash Equivalents 59.2 140.5 57.2 197.7 Loans Receivable - Associates 36.6 19.6 - 19.6 Investment Properties 1,724.4 1,938.7 (42.5) 1,896.2 Other Assets 17.4 18.8 - 18.8 Total Assets 1,837
Slide 33: For personal use only
For personal use only well versed well timed well considered Cromwell Property Group – 1H13 Results 33
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