Cromwell Property Group · ASX:CMW
Cromwell Property — HY25 Earnings Presentation
37 slides from Cromwell Property's earnings presentation, Feb 27, 2025
Slide 1: Cromwell Property Group HY25 Results Presentation ASX cover letter
Thursday 27 February 2025 ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 To whom it may concern Cromwell Property Group (ASX:CMW) HY25 Results Presentation I attach a copy of Cromwell Property Group’s HY25 Results Presentation. Yours faithfully CROMWELL PROPERTY GRO
Slide 2: Cromwell Property Group HY25 results presentation
Cromwell Property Group HY25 results presentation 27 February 2025 C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 1
Slide 3: Important information & disclaimer
Important information & disclaimer C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 2
Slide 4: Agenda and Acknowledgement of Country
Agenda Introduction and overview Jonathan Callaghan, CEO Financial results and capital management Michelle Dance, CFO Acknowledgement of Country Segment performance Cromwell Property Group acknowledges and pays respects to past, present, and future Traditional Custodians of Australia and their Elder
Slide 5: Half year result
Half year result 31 December 2024 C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S Third space at 207 Kent Street, Sydney 4
Slide 6: Key achievements
Key achievements Strategic business simplification programme complete with $1.6b of non-core assets sold since 2022 Net debt reduced by Gearing reduced to Sale of European platform Now positioned to deploy completed in December 66% 29.1% capital to drive earnings 2024 since 2022, Group net debt now
Slide 7: Strategic simplification programme complete; platform set for growth
Strategic simplification programme complete; platform set for growth Asset sales since 2022 • Sale of the European platform complete, in line with Cromwell’s strategy $1,800 to simplify the business and pay down debt. $1,600 $457 $1,572 • Focus shifts to local growth opportunities and continued tran
Slide 8: Strong locally focused platform
Strong locally focused platform Group assets under management: $4.5 billion1 Australia New Zealand Investment Portfolio Funds Management Oyster $2.3 billion $1.4 billion $0.8 billion Total AUM1 Total AUM Total AUM AUSTRALIA Townsville 1 113+ 103+ $3.7 billion 370+ 3 tenant-customers tenant-customers
Slide 9: Financial results and capital management
Financial results and capital management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S Office fitout at 207 Kent Street, Sydney 8
Slide 10: HY25 financial summary
HY25 financial summary Overview Financial position Statutory loss1 Underlying operating profit1 NTA per unit Liquidity3 $28.6 million $55.1 million $0.57 $538.5 million (equivalent to loss of 1.09 cps) (equivalent to 2.10 cps) (FY24: $0.61) (FY24: $292.3 million) Distributions AFFO Gearing4 Weighted
Slide 11: HY25 headline results
HY25 headline results • Statutory loss for the half-year to 31 December 2024 of $28.6 million, driven by: HY25 HY24 Change • Valuation decline of assets in the Investment Portfolio of $99.0 million1 on a like-for-like basis, based primarily on expanding cap rates. Statutory loss ($m)2 (28.6) (271.4)
Slide 12: HY25 earnings overview
HY25 earnings overview Change Operating profit HY25 ($’M) HY24 ($’M) (%) Despite asset sales throughout FY24 the Investment (millions) Portfolio has delivered a consistent result through Australian Investment Portfolio EBIT 78.0 78.0 0.0% lease negotiations and rental increases. 83.7 -0.8 Funds and
Slide 13: Debt levels significantly reduced
Debt levels significantly reduced Group net debt and gearing • Group net debt significantly reduced by $425.0 million to $645.7 million, down ~66% since asset sale programme $2,500 60% commenced in 2022. Millions • Gearing now at 29.1% following the completion of the sale of 50% $2,000 the European
Slide 14: Low debt supports growth strategy
Low debt supports growth strategy Debt expiry on drawn facilities • Cromwell retains a high level of interest at 10 January 2025 Hedge Profile rate hedging, while using option 100% 7% $900 contracts as part of the hedge portfolio, Millions to allow the Group to benefit from 90% $800 6% interest rate
Slide 15: Investment Portfolio
Investment Portfolio C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 400 George Street, Brisbane 14 14
Slide 16: Strong portfolio fundamentals
Strong portfolio fundamentals • Valuations at 31 December 2024 reflect a like-for-like decline of $99.0 million or 4.5% Portfolio value Core assets across key East Coast markets $2.1 billion over the 6 months. • Portfolio cap rate expanded 40 bps to 7.0%, with rate of expansion slowing. • Portfolio
Slide 17: Tenant profile remains robust
Tenant profile remains robust Diversification by occupier • Leasing over the period of 16,000 sqm reflects stable market conditions, with ongoing activity in key markets. (Income) • Tenant profile remains high quality, with stable occupancy, securing income streams, with top 5 tenants accounting for
Slide 18: Overview of portfolio activities and active asset management
Overview of portfolio activities and active asset management • Active asset management remains key to drive ongoing strong portfolio performance, Lease expiry profile derisking income through strategic lease management. (by NLA) • Key strategic asset upgrades add value to the portfolio and continue
Slide 19: Case study: CoLab at Kent Street, Sydney
Case study: CoLab at Kent Street, Sydney Kitchen and break out space CoLab, a third space at 207 Kent Street, Sydney, provides tenants access to larger meeting and conference space, supporting the leasing of smaller suites. The CoLab is run in partnership with Accor, who also provide concierge servi
Slide 20: Funds and asset management
Funds and asset management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S Office fitout at 95 Grenfell Street, Adelaide 19
Slide 21: Australia / New Zealand funds management
Australia / New Zealand funds management Key activities Australian funds management Product breakdown by value (M) • $2.2 billion of third-party funds under management across 8 directly managed products. • Total assets under management remain largely flat, with inflows and valuation increases in Cro
Slide 22: Growth strategy
Growth strategy C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 400 George Street, Brisbane 21
Slide 23: Group's strategic direction
Group’s strategic direction We will be an Serving specialising in Australian capital retail, wholesale and traditional light investment strategic institutional Australian property manager investors sectors C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 22
Slide 24: Pathway to execution
Pathway to execution Organic growth Existing product growth Platform acquisitions • Targeted asset acquisition for new • Partnering with like-minded capital • Growth through portfolio or platform product launches, focused in the unlisted partners to facilitate growth of existing acquisitions, merged
Slide 25: Sector opportunities
Sector opportunities Office Industrial Retail Pricing dislocation Onshoring Preferred by core capital Market sector recovery Limited infill supply Inflation tailwinds Liquidity constraints Fragmented ownership Consumer recovery • Negative sentiment has impacted markets and assets • Demand drivers ar
Slide 26: Key priorities
Key priorities • Organic and inorganic funds management growth opportunities are key to take advantage of Cromwell’s strong capital position, and the current market cycle. • Active asset management supports strong tenant engagement and retention to continue to drive maximum income from the investmen
Slide 27: For more information, please contact:
For more information, please contact: Jonathan Callaghan Chief Executive Officer jonathan.callaghan@cromwell.com.au Phone: +61 7 3225 7777 Michelle Dance Chief Financial Officer michelle.dance@cromwell.com.au Phone: +61 7 3225 7777 Libby Langtry Investor Relations Manager libby.langtry@cromwell.com.
Slide 28: Appendices
Appendices 28 Operating profit and statutory loss reconciliation 29 Segment results - operating earnings detail 30 Balance sheet 31 Investment Portfolio summary 32 Net property income 33 Movement in book value 34 Balance sheet debt details 35 Interest rate hedge C R O M W E L L P R O P E R T Y G R O
Slide 29: Operating Profit and Statutory Loss Reconciliation
Operating Profit and Statutory Loss Reconciliation HY25 ($M) HY24 ($M) Profit from Operations 55.1 83.7 Operating EPS 2.10 cps 3.20 cps Fair value gains / (losses) Investment properties (103.3) (195.7) Derivative financial instruments (31.6) (24.4) Campbell Park Rights cost - 15.2 Lease cost and inc
Slide 30: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail Funds and asset Investment portfolio management Co-investments Cromwell 31 December 2024 $M $M $M $M Segment revenue Rental income and recoverable outgoings 95.9 - 0.8 96.7 Operating profit of equity accounted investments - 0.7 17.9 18.6 Development income
Slide 31: Balance Sheet
Balance Sheet HY25 ($M) FY24 ($M) Assets Cash and cash equivalents 641.0 292.3 Investment property 2,113.0 2,212.0 Disposal group assets held for sale - 439.2 Equity accounted investments 20.8 20.1 Receivables 19.0 25.8 Intangibles 0.3 0.3 Derivative financial assets 22.7 46.7 Investments at fair va
Slide 32: Investment Portfolio summary
Investment Portfolio summary WALE by area from external Property Value ($M) Cap rate Occupancy valuation NLA (sqm) Major tenants Nabers Energy 400 George St, Brisbane, QLD 352.0 7.50% 98.5% 2.60 43,251 QLD State Government 5.5 HQ North Tower, Fortitude Valley, QLD 211.0 7.38% 99.3% 5.91 29,183 AECOM
Slide 33: Net Property Income
Net Property Income HELD PROPERTIES HY25 ($M) HY24 ($M) Variance ($M) Variance (%) 400 George Street, Brisbane, QLD 17.2 16.1 1.1 6.8% HQ North Tower, Fortitude Valley, QLD 8.5 7.9 0.6 7.5% 203 Coward Street, Mascot, NSW 16.1 17.2 (1.1) (6.4%) 2-4 Rawson Place, Sydney, NSW 7.8 7.9 (0.1) (1.3%) 207 K
Slide 34: Movement In Book Value
Movement In Book Value HY25 FY24 FY23 FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 $M $M $M $M $M $M $M $M $M $M $M $M $M $M $M $M Opening Balance 2,212.0 3,098.2 3,740.0 3,863.5 3,752.3 2,520.9 2,451.1 2,357.8 2,274.0 2,101.0 2,249.5 2,396.0 1,724.4 1,444.9 1,064.1 1,117.2 Acqui
Slide 35: Balance Sheet Debt Details
Balance Sheet Debt Details Drawn Facility Limit Drawn Facility Limit Maturity Fin Yr Years Facility 31 –Dec-24 31-Dec-24 10-Jan-2025 10-Jan-2025 Covenants Date Expiry Remaining (AUD $M) (AUD $M) (AUD $M) (AUD $M) Bank 1 - 5 Year Facility 152.5 250.0 - 175.0 Nov-2026 2027 1.9 yrs Bank 2 - 5 Year Faci
Slide 36: Interest Rate Hedge
Interest Rate Hedge Sector 31-Dec-24 30-Jun-25 31-Dec-25 30-Jun-26 31-Dec-26 30-Jun-27 31-Dec-27 30-Jun-28 31-Dec-28 Hedged Amount ($M)1 814.4 682.4 476.4 416.4 416.4 416.4 200.0 200.0 200.0 Average fixed rate on Derivatives2 2.62% 2.67% 3.24% 3.24% 3.24% 3.24% 3.89% 3.89% 3.89% 3 Forecast WACD incl
Slide 37: L T S
C R O M W E L L P R O P E R T Y G R O U P | H Y 2 5 R E S U L T S 36