Hmc Capital Limited · ASX:HMC
Hmc Capital — H1 FY23 Earnings Presentation
32 slides from Hmc Capital's earnings presentation, Feb 23, 2023
Slide 1: H1 FY23 Results Presentation
H1 FY23 RESULTS PRESENTATION PROGRESSING EVOLUTION INTO A HIGH ROE ALTERNATIVE ASSET MANAGER 23 February 2023 0
Slide 2: Acknowledgement of Country
ACKNOWLEDGEMENT OF COUNTRY HMC Capital acknowledges the Traditional Custodians of country throughout Australia and celebrates their diverse culture and connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Str
Slide 3: Agenda
Agenda David Di Pilla Group Managing Director & CEO Page 4 H1 FY23 Result Highlights Page 6 Funds Management Will McMicking Group CFO Page 16 Financial Results Page 21 Outlook & Guidance Page 24 Appendices Misha Mohl Group Head of Strategy, Research & IR 2 2
Slide 4: HMC Capital Overview
HMC Capital Overview ASX-listed alternative asset manager led by experienced and aligned management team Overview of HMC Capital Funds Management Platform $6.2bn 91% 78% TSR AUM CAGR External AUM1 (since IPO)2 (since IPO)3 Leading ASX-listed alternative asset manager S&P/ASX 200 diversified alternat
Slide 5: H1 FY23 Result Highlights
HMCopital H1 FY23 RESULT HIGHLIGHTS
Slide 6: H1 FY23 Result Highlights
H1 FY23 Result Highlights Strong growth in recurring income streams driven by increased FUM base and diversification Balance sheet Funds Management Operating earnings External FUM gearing Revenue 8.3cps $28.4m $6.2bn 9.5% $24.9m (post-tax) +129% on H1 FY221 $200m+ available +54% on H1 FY22 liquidity
Slide 7: Funds Management
HMCopital FUNDS MANAGEMENT
Slide 8: Funds Management Strategy
Funds Management Strategy Strategy is to create a sophisticated and diversified business with multiple growth levers HMC Today HMC Tomorrow ORGANICALLY GROWN FUNDS PLATFORM HIGH RETURN ON EQUITY ALTERNATIVE ASSET MANAGER 20%+ target return on equity Group Existing products: $5.7bn FUM Listed REITs
Slide 9: AUM Growth Strategy
AUM Growth Strategy Well positioned to grow AUM beyond $10bn by the end of CY 2024 via identified growth strategies Institutional HNW & Retail $10bn FUM target (end of CY2024) Exploring high ROE strategic growth opportunities in Fund II (2024) private credit and $1.5bn target equity energy transitio
Slide 10: Fund Raising Strategy – evolving & more sophisticated
Fund Raising Strategy – evolving & more sophisticated Matching diverse capital sources with high conviction alternative investment opportunities HMC Capital Product Suite LML Healthcare Fund & Life HMC-CP Series Sciences First First institutional. Charities / Close Close Institutional Insurance, Lis
Slide 11: A-REITs | HomeCo Daily Needs REIT
1 A-REITs | HomeCo Daily Needs REIT HDN is Australia’s leading daily needs REIT with a $4.8bn portfolio concentrated in densely populated metropolitan markets focused on essential retail and services HDN AUM growth ($bn) Model Portfolio targets tenant income split of 50% Investment strategy neighb
Slide 12: A-REITs | HealthCo Healthcare & Wellness REIT
2 A-REITs | HealthCo Healthcare & Wellness REIT HCW is Australia’s only diversified healthcare REIT focused on ownership and development of critical healthcare and education infrastructure Portfolio subsector mix Model Portfolio targets balanced weighting to key property Investment strategy subsec
Slide 13: Private Equity | HMC Capital Partners Fund I
3 Private Equity | HMC Capital Partners Fund I HMC-CP is actively building high conviction strategic stakes in listed entities where we have identified significant value which can be unlocked through portfolio and capital management initiatives High conviction strategy targeting real asset investm
Slide 14: Unlisted Real Estate | Last Mile Logistics (LML) Fund
4 Unlisted Real Estate | Last Mile Logistics (LML) Fund Proposed $1bn LML unlisted fund on-track to be established in 2H FY23 Yield spread versus industrial2 Target core plus transition assets (sub regional, 10% 2.0% Investment strategy neighbourhood & LFR assets) with upside via repositioning int
Slide 15: HMC Capital’s Sustainability Framework
HMC Capital’s Sustainability Framework We are committed to sustainable practices that drive long term value creation and achieve a positive impact on the communities in which we operate Sustainability Framework Environmental Social Governance Net Zero target and baseline set 50% gender diversity
Slide 16: HMC Capital’s Sustainability Framework
HMC Capital’s Sustainability Framework Net-Zero Roadmap for HMC Capital REITs - Scope 1 & 2 emissions reduction roadmap Net Zero Progress Baseline Formed Advancing towards a green, low carbon economy & FY22 Net Zero by 2028 FY23 Solar Baseline Net Zero Target Formed Solar 50% EV Charging Solar
Slide 17: Financial Results
FINANCIAL RESULTS HMCopital 16
Slide 18: Earnings summary
Earnings summary H1 FY23 operating earnings of $24.9m $ million H1 FY22 H1 FY23 INVESTMENT INCOME Direct property earnings & other income 6.4 0.2 Reduction in direct property earnings reflects sell down of remaining income producing properties in FY22 Share of associate profit (FFO) 1 8.9 14.7 $
Slide 19: Funds management
Funds management $9.9m growth in funds management revenue in H1 FY23 $ million H1 FY22 H1 FY23 INVESTMENT MANAGEMENT Base management fees 6.8 11.5 $4.7m increase in base management fees is predominately due to HDN’s acquisition of the Aventus portfolio in Mar-22 plus 6 months of fees Acquisition /
Slide 20: Balance sheet
Balance sheet Underlying NTA of $2.30 per share flat vs. Jun-22 HMC Standalone $ million Jun-22 Dec-22 HMC-CP Dec-22 BALANCE SHEET Consolidated Assets Cash and cash equivalents 57.6 32.9 142.0 174.9 HMC Capital consolidated the HMC Capital Partners Fund I Equity accounted investments 608.7 591.3 -
Slide 21: Capital management
Capital management Well positioned to support future funds management activities HMC Standalone Dec-22 CAPITAL MANAGEMENT & LIQUIDITY $ million Jun-22 Dec-22 consolidated Bank debt HMC Capital Maturity Nov-23 Jan-24 N/A HMC has access to $200.9m of cash and undrawn debt as at 31 Dec 22 Limit 275.0
Slide 22: Outlook and Guidance
OUTLOOK AND GUIDANCE HMCopital 21
Slide 23: Outlook and Guidance
Outlook and Guidance Reaffirming DPS guidance of 12cps which supports high ROE growth strategy FY23 Outlook & Guidance In FY22 HMC Capital delivered operating EPS of 31.0 cps pre-tax (+126%) which included 10.4 cents of transactional income and 9.5 cents of trading profits from the sale of investm
Slide 24: Summary and Key Messages
Summary and Key Messages Significant investment in funds management capability during period of disciplined capital deployment STRATEGIC PRIORITIES EXPAND & DIVERSIFY GROW AND RETAIN SCALE EXISTING SOURCES OF CAPITAL ELITE TEAM PLATFORM Scalable new product development initiatives Significant in
Slide 25: Appendix A
Appendix A SUPPLEMENTARY INFORMATION 24 24
Slide 26: Funds Management Platform
Funds Management Platform Scalable growth platforms underpinned by permanent capital sources and powerful megatrends 1 2 3 4 LAST MILE Partners LOGISTICS FUND Fund I H2 FY23 Established Nov-20 Sep-21 Aug-22 (expected) Healthcare & wellness High conviction strategic Daily needs transition Sector focu
Slide 27: HMC Capital Track Record
HMC Capital Track Record Execution capability has accelerated evolution to a capital light alternative asset manager $7.2bn $4.3bn >500,000 sqm 4 Funds including proposed Gross transactions1 Capital Raised2 GLA re-developed establishment of LML Fund 2016 2017 - 2019 OCT 19 JUL 20 NOV 20 DEC 20 Acqui
Slide 28: Additional financial information
Additional financial information FFO reconciliation to net profit/(loss) after tax $ million H1 FY22 H1 FY23 Net profit after tax 78.3 25.1 Non-controlling interest - (5.4) Deferred income tax expense 2.3 (3.4) Straight-lining of rental income 0.3 - Amortisation of borrowing costs 1.6 0.2 Acquisitio
Slide 29: Real estate gross transactions and equity flows
Real estate gross transactions and equity flows H1 FY23 Gross transactions1 Daily Needs Retail Healthcare & Wellness Last Mile Logistics Total Acquisitions ($bn) $0.1bn $0.1bn $0.2bn $0.4bn Disposals ($bn) $0.1bn - - $0.1bn Net transactions ($bn) $0.0bn $0.1bn $0.2bn $0.2bn Gross transactions ($bn)
Slide 30: Sustainability Progress at HMC Capital
Sustainability Progress at HMC Capital Delivering on HMC Capital’s Sustainability Commitments Environment Social Governance Climate Action Green Future Connection Respect Alignment Accountability ~$33m FY22 COMPLETIONS HDN is advancing toward Net Zero by 2028 50% gender diversity achieved Organi
Slide 31: Further Information
Further Information Investors and analysts Media Misha Mohl Will McMicking John Frey Group Head of Strategy, Research & IR Group Chief Financial Officer Corporate communications HMC Capital HMC Capital +61 422 371 575 +61 451 634 991 +61 411 361 361 misha.mohl@hmccapital.com.au william.mcmicking@hmc
Slide 32: Disclaimer
Disclaimer This presentation (Presentation) has been prepared by HMC Capital Limited (ACN 138 990 593) (“HMC Capital”) Summary information This Presentation contains summary information about the current activities of HMC Capital and its subsidiaries as at the date of this Presentation. The informat