Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — H1 FY2019 Earnings Presentation
28 slides from Dexus Convenience Retail Reit's earnings presentation, Feb 18, 2019
Slide 1: FY2019 Half Year Results
FY2019 HALF YEAR RESULTS 18 FEBRUARY 2019 www.apngroup.com.au ASX Code: AQR (formerly CRR)
Slide 2: Agenda
Agenda 01 HY2019 snapshot 02 Financial performance 03 Investment overview 04 Market update 05 Outlook and guidance Appendices 2
Slide 3: 01 HY2019 Snapshot
01 HY2019 SNAPSHOT | Property Group
Slide 4: Snapshot
Snapshot Financial performance Portfolio performance Capital management $2.95 12.1 years 32.5% NTA PER SECURITY WALE GEARING 2.8% since June 2018 10.72c 100% 2.6 years FFO PER SECURITY OCCUPANCY WEIGHTED AVERAGE 3.7% on PDS forecast DEBT MATURITY 10.45c $7.5m 4.4x DISTRIBUTION PER SECURITY VALUATION
Slide 5: 02 Financial Performance
02 FINANCIAL PERFORMANCE 5
Slide 6: HY2019 half year financial performance
HY2019 half year financial performance Transparent income streams and capital structure A$m 1H FY19 PDS Variance ▪ FFO for the period of 10.7 cents per security Net property income 12.3 11.6 6.0% exceeded PDS forecast by 3.7% Straight lining of rental income 2.3 2.0 15.0% ▪ Net property income above
Slide 7: Balance sheet
Balance sheet NTA per security increased by 8 cents (+2.8%) Dec June A$m 2018 2018 Variance ▪ $14.8 million increase in investment properties from: Assets – Acquisition of Mount Larcom for $7.3m in Cash and cash equivalents 1.0 2.8 Large August 2018 Investment Properties 355.2 340.4 4.3% – $7.5m rev
Slide 8: 03 Investment Overview
03 INVESTMENT OVERVIEW 2s Gateaded julbrices BEFORE Discount Unleaded
Slide 9: Attractive convenience retail portfolio – long leases to quality tenants
Attractive convenience retail portfolio – long leases to quality tenants 7.2% 79.1% 32.5% 100% CASH DISTRIBUTION FY19 TAX GEARING OCCUPANCY YIELD1 DEFERRED COMPONENT 70 $355m 7.0% 12.1 PROPERTIES PORTFOLIO WACR WALE VALUE (YEARS) DIVERSIFIED AND DEFENSIVE LONG LEASE PORTFOLIO SUSTAINABLE AND GROWING
Slide 10: Diversified portfolio
Diversified portfolio Major tenants 89% of portfolio located in Australia’s 69% eastern seaboard states ~78% of Australia’s population live in the eastern seaboard states1 18% 9% Major tenants account for 1% 97% of portfolio income Complementary 3% retail 65% Portfolio by site classification 11% 15.
Slide 11: Sustainable and secure income through long dated leases
Sustainable and secure income through long dated leases ▪ Attractive lease expiry profile Rent review type by income – Over 76% of lease income expiring FY30 and beyond – Only 0.7% of income expiring before FY22 22% ▪ Contracted average annual rental growth of 2.9% across the portfolio1 ▪ 78% of por
Slide 12: APN Property Group – aligned and experienced manager
APN Property Group – aligned and experienced manager Strong investor Focused and Governance Manager with long alignment dedicated overseen by majority track record and ▪ APN is strongly aligned to management team independent Board deep relationships delivering investor returns – owning a $27 million
Slide 13: 04 Market Update
= Lk — me ——— APN | Property Group
Slide 14: Market update
Market update ▪ On average, there are 770 vehicles per 1,000 people in Australia, with 98% of vehicles on the road powered by either petrol or diesel1, ensuring that the market for these energy sources continues long into the future ▪ Demand for Diesel continues to increase, reporting a 5.5% CAGR si
Slide 15: Sale of Woolworths fuel business
Sale of Woolworths fuel business ▪ On 9 November 2018, Woolworths Ltd announced that it had entered into a binding agreement to sell its fuel business to EG Group for $1.725 billion, after the sale to BP for $1.8 billion was rejected by the ACCC ▪ EG Group, founded in 2001, is a global leader in fue
Slide 16: 05 Outlook and Guidance
- 05 OUTLOOK AND GUIDANCE | Prope
Slide 17: Outlook
Outlook Secure and growing income profile backed by long term leases to quality tenants Passive income stream Long-term leases Healthy balance sheet with organic rental increases providing with 97% of income derived directly with low level of debt and sustainable income growth from the major service
Slide 18: Guidance
Guidance FY19 guidance remains unchanged FFO guidance1 DPS guidance1 97.5% payout ratio of 21.3 – 21.7 cps of 20.9 cps – above PDS of FFO 5.4 – 7.4% on FY18 annualised forecast of 20.3 3.4 – 5.3% on PDS forecast Raceview Convenience Centre, QLD 1. Subject to current market conditions continuing and
Slide 19: Appendices
APPENDICES | Property Group
Slide 20: Profit and Loss statement
Profit and Loss statement Financial period ended HY2019 $’000 Income Net property income 12,318 Straight lining of rental income 2,340 Interest income 14 Total income 14,672 Expenses Management fees (1,143) Corporate costs (348) Finance costs (2,594) Total expenses (4,085) Net profit 10,587 Fair val
Slide 21: Reconciliation to FFO
Reconciliation to FFO Financial period ended HY2019 $’000 Statutory net profit 14,461 Adjusted for: Straight line lease revenue recognition (2,340) Fair value gain on investment properties (4,452) Fair value loss on derivatives 578 Amortisation of borrowing costs 208 Amortisation of leasing costs an
Slide 22: Capital management
Capital management Healthy balance sheet position Key metric Dec 2018 ▪ Expanded finance syndicate following the introduction Gearing 32.5% of a new and third financier ICR 4.4x – Facility limit remains unchanged at $125 million Average all-in cost of debt (including line, margin, (undrawn amount of
Slide 23: Portfolio revaluations
Portfolio revaluations 2.2% revaluation uplift Valuation change ▪ $7.5 million or 2.2% revaluation uplift versus No. of Valuation Cap Site type properties ($m) rate unchanged portfolio weighted average cap rate of ($m) % 7.0% Metropolitan 50 $224.7 6.9% $4.2 +1.9% ▪ Valuation gains driven by annual
Slide 24: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) 440 Roadhouse WA Puma Regional $4.7 8.25% 15.6 100% 11,372 Aeroglen QLD Puma Metropolitan $3.7 7.00% 15.0 100% 3,224 Atherton QLD Puma Metropolitan $1.9 7.25% 16.0 100
Slide 25: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) Hamilton Hill WA Puma Metropolitan $4.6 7.00% 14.6 100% 1,998 Kedron QLD Puma Metropolitan $3.2 7.00% 16.6 100% 1,604 Kempsey South Service Centre NSW Puma Highway $19
Slide 26: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) Rutherford NSW Puma Metropolitan $5.4 6.75% 16.0 100% 2,609 Sarina QLD Puma Regional $1.9 7.50% 16.0 100% 1,679 Slacks Creek QLD Woolworths Metropolitan $4.0 7.25% 2.8
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by APN Funds Management Limited (ACN 080 647 479, AFSL No. 237500) (the "Responsible Entity") as the responsible entity and issuer of the financial products in respect of Convenience Retail REIT No. 1 (ARSN 101 227 614), Convenience Retail REIT No. 2 (A
Slide 28: Contact
Contact Chris Brockett Fund Manager, APN Convenience Retail REIT Ph: (03) 8656 1044 : cbrockett@apngroup.com.au ASX Code: AQR Follow us… @apngroup APN Property Group Limited Level 30,101 Collins Street, APN Property Group Limited Melbourne, Vic 3000 apnpropertygroup apngroup.com.au http://blog.apng
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