Far East Consortium International Limited · HKEX:35
Far East Consortium International — H1 FY2017 Earnings Presentation
48 slides from Far East Consortium International's earnings presentation, November 2016
Slide 1: FY2017 Interim Results
FY2017 Interim Results November 2016
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 1. Key Achievements 2. FY2017 Interim Results Summary 3. Review of Operations 4. Prospects 3
Slide 4: 1. Key Achievements
1. Key Achievements Melbourne CBD 4
Slide 5: FY2017 Interim Results Highlights
FY2017 Interim Results Highlights Record High Half-year • Revenue: HK$3bn, +59.0% yoy Revenue and Profit • Net profit attributable to shareholders: HK$681mn, +158.9% yoy • Upper West Side Stage 4 Manhattan, Melbourne (641 apartments) Projects • King’s Manor, Shanghai (479 apartments 90 townhouses) C
Slide 6: FY2017 Interim Financial Highlights
FY2017 Interim Financial Highlights 1HFY2017 1HFY2016 YoY change Revenue (HK$ M) 2,953 1,857 +59.0% Gross profit (HK$ M) 1,109 629 +76.4% Net profit attributable to shareholders (HK$ M) 681 263 +158.9% EPS (HK cents) - Basic 32.0 13.7 +133.6% - Fully diluted 32.0 13.7 +133.6% Dividend per share (HK
Slide 7: Business Highlights
Business Highlights • Angel Meadow at NOMA, Manchester (600 apartments) New Residential/ • Perth City Link, Perth (350 apartments, 250 hotel rooms) Mixed-use Projects Acquired • Hornsey Town Hall re-development, London (Residential + Retail, preferred proponent) • Pyrmont, Sydney and Jupiters, Gold
Slide 8: New Residential/Mixed-use Pipeline
New Residential/Mixed-use Pipeline Perth City Link, Perth, Australia - 350 apartments and 250 hotel rooms Angel Meadow Site at NOMA, Manchester, the United Kingdom - 600 apartments Hornsey Town Hall redevelopment, London Perth City Link, Perth, Australia - Expected 96,000 sq. ft. net sellable
Slide 9: JV with the Star and CTF
JV with the Star and CTF New JV MOUs with The Star and CTF signed to develop The Star casino sites in Sydney and Gold Coast, with planning approval in progress Substantial residential development opportunities Hotel additions in prime locations will add to Pyrmont, Sydney recurring cashflow Ju
Slide 10: Sheraton Mirage – Gold Coast
Sheraton Mirage – Gold Coast Consortium partners (FEC, the Star & CTF) in process of acquiring Sheraton Mirage – Gold Coast Addition of this beach front property will add to tourism offering and complement Queen’s Wharf Brisbane as a satellite hotel Property facilities include 295 rooms and su
Slide 11: 2. FY 2017 Interim Results Summary
2. FY 2017 Interim Results Summary Melbourne night view, Australia 11
Slide 12: Well Balanced Diversified Portfolio
Well Balanced Diversified Portfolio Business diversification allows FEC to take advantage of property cycles in different countries Total Assets by Geographies(1) Total Assets by Business Segments(1) Treasury & United others(2) Car park Kingdom (located in operations & 5% Hong Kong) facilities Malay
Slide 13: GP Margin Expanded with Top Line Growth
GP Margin Expanded with Top Line Growth 1HFY2017 1HFY2016 Gross profit Gross profit Gross profit Gross profit Revenue (before (after Revenue (before (after depreciation) depreciation) depreciation) depreciation) HK$ M HK$ M % HK$ M % HK$ M HK$ M % HK$ M % Sales of properties 1,960 766 39.1% 766 39.1
Slide 14: Strong USD in Group's Favour during Expansion Phase
Strong USD in Group’s Favour during Expansion Phase Contributions from the Group’s non-Hong Kong operations were affected by the movement of foreign currencies against Hong Kong dollar The impact of such currency movement to the Group’s results for 1H FY2017 was less than that for 1H FY2016 Ne
Slide 15: Share Price Supported by Strong NAV Backing
Share Price Supported by Strong NAV Backing Net asset value per share As at 30.9.2016 As at 31.3.2016 (HK$M) (HK$M) Equity attributable to shareholders of the Company 10,291 10,140 Add: Hotel revaluation surplus 10,732 10,732 Adjusted net asset value 21,023 20,872 No. of shares issued (million) 2,13
Slide 16: Reliable Return to Shareholders
Reliable Return to Shareholders FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 CAGR 1HFY2017 Period-end NAV/share(1) (HK$) 4.73 5.84 6.00 6.70 8.45 9.12 9.02 9.79 11% 9.86 Basic EPS (HK cents) 5 18 21 23 50 51 51 37 33% 32 Diluted EPS (HK cents) 2 18 21 23 50 51 51 36 51% 32 Dividend Total
Slide 17: Substantial War Chest to Drive Future Growth
Substantial War Chest to Drive Future Growth Presales HK$9.8bn provides clear visibility of cash flow stream War chest can be enhanced by leveraging unencumbered hotels War chest HK$ M Group cash and liquidity @ 30.9.2016 5,422 Undrawn banking facilities - Corporate use 2,800 Undrawn banking fac
Slide 18: Solid Balance Sheet to Support Future Growth
Solid Balance Sheet to Support Future Growth Debt maturity profile Due more than 5 Due within 1 year years 10% As at As at 3% 30.9.2016 31.3.2016 Due 1- 2 years HK$ M HK$ M 14% (1) Bank loans, notes and bonds Due within 1 year 1,258 1,864 Due 2- 5 years Due 1-2 years 1,708 1,691 73% Due 2-5 years 8,
Slide 19: Strong Credit Matrix
Strong Credit Matrix Liquidity Position and Total Assets Net Gearing (2) HK$ million 26,161 26,893 22,216 37.7% 29.8% 31.6% 3,750 5,422 3,487 As at 31.3.2015 As at 31.3.2016 As at 30.9.2016 As at 31.3.2015 As at 31.3.2016 As at 30.9.2016 (1) Cash & investment securities Total Assets Secured and Unse
Slide 20: Proven Track Record
Proven Track Record As at and for the year/period ended 1H (In HK$m) FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 CAGR FY2017 Revenue 1,733 2,342 1,654 1,761 3,732 4,066 5,110 3,995 13% 2,953 Sales of properties 951 1,376 245 46 1,946 1,589 2,962 1,979 11% 1,960 Hotel operations and manag
Slide 21: 3. Review of Operations: Property Development
3. Review of Operations Property Development West Side Place & Upper West Side, Melbourne 21
Slide 22: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Expected Expected Cumulative attributable attributable Expected Cumulative presale Projects under presale Location presales SFA(1) GDV(1) completion(2) as % of GDV @30.9.2016 (HK$ M) (sq. ft.) (HK$ M) % 1 Aspen Crest Hong Kong 989 64,000 1,069 FY2019 93% 2 UWS
Slide 23: Casino License Granted in October 2016
Casino License Granted in October 2016 Investment Plan Residential Component (Approx., subject to planning) Total FEC Portion Expected SFA Expected GDV FEC’s Stake Component (A$ million) (A$ million) (sq.m.) (A$ million) Total investment of IR (100%) 1,930 n/a n/a Tower 4 48,200 480 Bank financing o
Slide 24: Details of Investment Properties
Details of Investment Properties Attributable Current Investment Properties GFA Pipeline Investment Properties GFA (sq. ft.) (sq. ft.) (1) The FIFTH, Melbourne 3,200 FEC Building, Central, Hong Kong 16,000 FEC Building, Nathan Road, Hong Kong(1) 38,000 West Side Place, Melbourne 84,000 Basement to 5
Slide 25: 3. Review of Operations: Hotel operations and management
3. Review of Operations Hotel operations and management Dorsett Shepherds Bush, London 25
Slide 26: Steady Overall with Hong Kong Bottoming Out
Steady Overall with Hong Kong Bottoming Out 1HFY2017 1HFY2016 Hong Kong • Hong Kong operation stablising with signs of Occupancy rate (i) 87.2% 85.7% recovery (i) Average room rate (HK$) 632 679 RevPAR (HK$) (i) 551 582 • Hotel performance in Malaysia and Malaysia Singapore were stable Occupancy rat
Slide 27: Clear Pipeline for Mid-term Room Growth
Clear Pipeline for Mid-term Room Growth No. of rooms 10,000 Approximately 6,000 rooms as at 30 September 2016 9,000 9,316 7,567 7,830 7,363 7,567 13(1) owned hotels in the development pipeline in next 8,000 6,722 7,000 6,043 6,043 6 years 6,000 5,429 5,000 4,894 Approx. 700 new rooms expected
Slide 28: Continuous Improvements to Hotels with Proactive Marketing Initiatives
Continuous Improvements to Hotels with Proactive Marketing Initiatives Hotel upgrades to prepare for expected upturn in HK tourism - Cosmopolitan Hotel, Hong Kong rebranded as Dorsett Wanchai Hong Kong - Silka Far East Hong Kong, with all 240 guest rooms fully renovated Diversify customer source
Slide 29: Silka Tsuen Wan, Hong Kong – Opening Soon
Silka Tsuen Wan, Hong Kong – Opening Soon - A new build hotel development in Tsuen Wan, Hong Kong - 157,066 sq.ft. with 409 bedroom 3-star business hotel 29
Slide 30: Dorsett City – A New Pearl in the City of London
Dorsett City – A New Pearl in the City of London - A new build hotel development in Aldgate, City of London - 103,000 sq. ft. 13-storey (basement + 12 storey) 270 bedroom 4-star business hotel - 253 guests rooms, 17 guest suites - Restaurants, executive lounge, fitness centre, meeting rooms, and a r
Slide 31: Substantial Development Profit Not Yet Recognised
Substantial Development Profit Not Yet Recognised Capital Value Book Value Revaluation City Description Rooms @ 31.3.2016 @ 31.3.2016 Surplus (HK$ M) (HK$ M) (HK$ M) Hotels in operation Hong Kong 1 Dorsett Wanchai Hong Kong Near Wanchai and Causeway Bay 454 2,543 348 2,195 2 Silka West Kowloon Hong
Slide 32: 3. Review of Operations: Car park operations and facilities management
3. Review of Operations Car park operations and facilities management Festival Car Park, Brisbane 32
Slide 33: Steady Cash Flow with Constant Growth
Steady Cash Flow with Constant Growth Steady growth of portfolio continued with approx. 5,200 car park bays added in 1HFY17 Regional expansion envisaged, with UK and SE Asia the next frontier Upgrade of central monitoring system enables better control of day-to-day operations, bringing in effi
Slide 34: Regional Expansion On Track with Latest Additions in Brisbane
Regional Expansion On Track with Latest Additions in Brisbane Festival Car Park – 45 Charlotte Street, Brisbane - Acquired in April 2016 - Partnership with the Star and CTF where FEC owned 25% stake - 400 parking spaces over 8 levels and Festival Car Park, Brisbane ground level retail space and ga
Slide 35: Care Assist – Infrastructure Support Ready for Global Expansion
Care Assist – Infrastructure Support Ready for Global Expansion Care Assist is the newly constructed facility in the heart of Care Park’s Head Office in Melbourne Specifically designed to enhance control room operations from just being an intercom help point to being a fully functional customer
Slide 36: Steadily Growing Facilities Management Services
Steadily Growing Facilities Management Services Asset-light business model with steady growth expected 58 active contracts as at 30 September 2016 (added 12 contracts compared with 31 March 2016) Case Study - Acquired Pacifica Student Accommodation services contract in September 2016 - 67 unit
Slide 37: 4. Prospects
4. Prospects The Towers at Elizabeth Quay, Perth
Slide 38: Company Outlook – Solid Foundation for Growth
Company Outlook – Solid Foundation for Growth • Continue to invest globally leveraging on local expertise and taking advantage of property cycles Chinese Wallet Strategy • Weak sterling provides good timing for UK expansion: Angel Meadow Manchester and Hornsey Town Hall, London redevelopment • Oppor
Slide 39: Company Awards Demonstrate Recognitions
Company Awards Demonstrate Recognitions Euromoney Best Managed Company in Asia in the Real‐Estate Category Silver Award (Traditional Annual Report) - Real Estate 30th International Integrated Development & Investment ARC Awards Bronze Award (Written Text) - Real Estate Integrated Development & Inves
Slide 40: Thank You
Thank You Questions & Answers FEC Official WeChat
Slide 41: Appendix: West Side Place, Melbourne – Strong Response
Appendix: West Side Place, Melbourne – Strong Response 4 Residential Towers, Feature Ritz Carlton Hotel and commercial area SFA Approx. 2,000,000 sq.ft. Net lettable area Approx. 65,000 sq.ft. Number of 2,500+ apartments Number of hotel 263 (Ritz Carlton Hotel) rooms Launch time Tower 1 and 2: June
Slide 42: Appendix: Other Projects in Australia – Balanced Pipeline in Portfolio
Appendix: Other Projects in Australia – Balanced Pipeline in Portfolio The FIFTH, Melbourne The Towers at Elizabeth Quay, Perth 284,000 sq. ft. SFA 320,000 sq. ft. SFA 402 apartments 379 apartments Queen’s Wharf, Brisbane 706,000 sq.ft. attributable SFA Perth City Link, Perth ~2,000 residential apar
Slide 43: Appendix: Alpha Square, London
Appendix: Alpha Square, London – Entrance into UK Residential Market Planning obtained in May 2016 Features Residential and hotel component SFA 388,000 sq.ft. 221,000 sq.ft. Net lettable area (incl. retail and other facilities) Number of hotel rooms 231 43
Slide 44: Appendix: Royal Riverside, Guangzhou
Appendix: Royal Riverside, Guangzhou Feature 5 Residential Towers SFA 728,000 sq.ft. Number of apartments 607 Tower 2: Jan 2016 Launch time Tower 1 & 4: 1HFY2017 Tower 3 & 5: TBC 44
Slide 45: Appendix: California Garden, Shanghai
Appendix: California Garden, Shanghai King’s Manor 712,000 sq.ft. SFA 479 apartments and 90 townhouses Royal Crest II 259,000 sq.ft. SFA 180 apartments and 42 townhouses 45
Slide 46: Appendix: Projects in Hong Kong
Appendix: Projects in Hong Kong Aspen Crest Tai Wai Shatin Heights 64,000 sq.ft. SFA 33,000 sq.ft. SFA 70,000 sq.ft. SFA 234 apartments 118 apartments 60 apartments + 3 townhouses Sham Shui Po Sha Tau Kok Tan Kwai Tsuen 28,000 sq.ft., SFA 99,000 sq.ft. SFA 51,000 sq.ft. SFA 72 apartments 263 apartme
Slide 47: Appendix: Projects in Singapore / Malaysia
Appendix: Projects in Singapore / Malaysia Alexandra View, Singapore Dorsett Bukit Bintang, Kuala Lumpur 290,000 sq. ft. attributable SFA (70% stake) 215,000 sq. ft. SFA 400 apartments 252 apartments 47
Slide 48: Appendix: Australian Casino Comparison
Appendix: Australian Casino Comparison City Sydney Melbourne Brisbane Gold Coast Perth Adelaide Darwin City population(‘000)(2015 June) 4,904 (+1.7% yoy) 4,513 (+2.1% yoy) 2,345 (+2.3% yoy) 614 (+1.6% yoy) 2,112 (+3.4% yoy) 1,277 (+1.0%) 123 (+1.7% yoy) State/territory New South Wales Victoria Queen
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