Centuria Capital Group · ASX:CNI
Centuria Capital — H1 2019 Earnings Presentation
35 slides from Centuria Capital's earnings presentation, Feb 13, 2019
Slide 1: 1H19 Results
For personal use only Centuria Capital Group 1H19 RESULTS | ASX:CNI | 13 FEBRUARY 2019 CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 1
Slide 2: Contents
For personal use only Contents 1. Overview and Highlights 2. Financial Results 3. Divisional Overview 4. Strategy & Outlook 5. Appendices CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 2
Slide 3: Overview & Highlights
For personal use only SECTION ONE Overview & Highlights 201- 203 PACIFIC HIGHWAY, ST LEONARDS, NSW CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 3
Slide 4: Centuria Profile
ASX-LISTED SPECIALIST INVESTMENT MANAGER Centuria Profile For personal use only Centuria Capital Group $499m Market Capitalisation1 $5.6bn $0.5bn Assets Under Management (AUM) Co-Investments $4.8bn $0.8bn Centuria Metropolitan REIT (CMA) Centuria Industrial REIT (CIP) Propertylink Group (PLG) Proper
Slide 5: Centuria Capital Group Highlights
CENTURIA CAPITAL GROUP HIGHLIGHTS Delivering on key initiatives in 1H19 For personal use only • Strong 14.3% platform growth in 1H19 to $5.6bn Material AUM growth • Australia’s third largest real estate acquisition in CY18 ($645m1 Hines portfolio) • Investment Bonds new product “LifeGoals” launch po
Slide 6: Assets Under Management
ASSETS UNDER MANAGEMENT Strong AUM increase driven by real estate platform ASSETS UNDER MANAGEMENT ($BN) For personal use only Centuria Industrial REIT $5.6bn Centuria Metropolitan REIT Unlisted Wholesale • Total platform AUM growth of $0.7bn (14.3% in 1H19) Unlisted Retail 54.1% $4.9bn 1.2 Investme
Slide 7: Recurring Revenues
RECURRING REVENUES AUM growth and co-investments underpin recurring revenues For personal use only CNI REVENUE COMPOSITION Transactional revenue Belmont Rd • Greater proportion of recurring 120 Performance fees revenue from Property Funds Property transaction fees Management Fees and co- Recurring r
Slide 8: 1H19 Financial Results
For personal use only SECTION TWO 1H19 Financial Results 60 BROUGHAM STREET, GEELONG, VIC CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 8
Slide 9: Group Financial Highlights
GROUP FINANCIAL HIGHLIGHTS Delivering strong investor returns OPERATING EARNINGS PER SECURITY (CPS) • Delivered operating EPS 6.5cps1 in 1H19 For personal use only CENTS § Listed property acquisitions of $0.74bn in 1H19, Forecast continuing to assess unlisted acquisition opportunities 1H19 Actual 16
Slide 10: Operating Segment Results
OPERATING SEGMENT RESULTS Operating profit underpinned by property funds management and co-investments For personal use only Profit increased $2.8m half on half excluding 1H19 1H18 OPERATING PROFIT BY SEGMENT ($m) ($m) property transaction fees in 1H18 Property funds management1 10.9 10.9 1H19 adopt
Slide 11: Debt and Capital Management
DEBT AND CAPITAL MANAGEMENT Strengthened balance sheet supports growth opportunities For personal use only and increased co-investment OPERATING BALANCE SHEET 31 DEC 2018 ($m) 30 JUN 2018 ($m) ASSETS Cash and cash equivalents 45.9 76.4 • $100m equity raise and $80m corporate bond issuance Receivable
Slide 12: Co-Investments
CO-INVESTMENTS Delivering increased recurring revenues For personal use only CARRYING CARRYING VALUE DISTRIBUTION VALUE DISTRIBUTION CO-INVESTMENTS 31 DEC 2018 INCOME 1H19 31 DEC 2017 INCOME 1H18 ($m) ($m) ($m) ($m) Centuria Metropolitan REIT 178.8 4.4 66.1 2.1 (CMA)2,3,4 • Increase in size and scal
Slide 13: Divisional Overview
For personal use only SECTION THREE Divisional Overview 8 CENTRAL AVENUE, EVELEIGH, NSW CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 13
Slide 14: Centuria Property Platform
CENTURIA PROPERTY PLATFORM 20% growth to $4.8 billion1 property AUM For personal use only 11 properties valued at $424m (FY18: $400m) 18 properties valued at $890m (FY18: $638m) CMA: 2 properties CIP: 7 properties 2 Unlisted: 2 properties CMA: 6 properties CIP: 9 properties Unlisted: 3 properties NT
Slide 15: Unlisted Property Highlights
UNLISTED PROPERTY HIGHLIGHTS Creating value through active management For personal use only • 15.8% increase in 1H19 AUM underpinned by new management of 75% interest1 in 465 Victoria Avenue Chatswood, NSW • Active asset management initiatives repositioning several unlisted assets § 47 leasing trans
Slide 16: Centuria Diversified Property Fund
UNLISTED PROPERTY HIGHLIGHTS Centuria Diversified Property Fund (CDPF) For personal use only CDPF ASSETS UNDER MANAGEMENT 50.7m 37.8m 27.0m 13.2m 6.8m 0.7m FY16 1H17 FY17 1H18 FY18 1H19 Multi-asset open-ended unlisted fund with Limited monthly withdrawals1 limited monthly liquidity facility1 Diversi
Slide 17: Centuria Zenith Fund Major Leasing Success
UNLISTED PROPERTY CASE STUDY: CENTURIA ZENITH FUND MAJOR LEASING SUCESS Leasing success and active asset Completed over management creates significant value 40,700sqm, 56 deals since acquisition For personal use only Major renewal: • A Grade asset acquired in July 2016 for $279m, 50% JV with Blackro
Slide 18: Centuria Metropolitan REIT
CENTURIA METROPOLITAN REIT (ASX: CMA) Australia’s largest pure play office REIT PORTFOLIO SNAPSHOT 1H196 FY187 For personal use only Number of assets 20 19 Book value $m 1,376.4 930.5 • Increased AUM to $1.4bn underpinned by $520m1 Book value WACR $/sqm % 6,308 6.32 $5,818 6.68 portfolio acquisition
Slide 19: Centuria Industrial REIT
CENTURIA INDUSTRIAL REIT (ASX: CIP) Australia’s largest income focused industrial REIT PORTFOLIO SNAPSHOT 1H19 FY188 For personal use only Number of assets 41 37 Book value $m 1,154.7 999.0 AUM uplift to $1.2 billion in 1H19 Book value $/sqm 1,455 1,358 % • Transaction initiatives improve portfolio
Slide 20: Investment Bonds
INVESTMENT BONDS Scalable platform well positioned to benefit from increased market interest For personal use only • New, contemporary product Centuria ‘LifeGoals’ launched January 2019 • Centuria Life: five investment options (excluding Centuria LifeGoals) • Guardian Friendly Society: Invests pre-p
Slide 21: Centuria LifeGoals – new product
INVESTMENT BONDS Centuria LifeGoals – new product launched January 2019 For personal use only CENTURIA MANAGER SELECTION PROCESS • Partner with high quality fund managers across Unique range of investment styles and asset classes “active” manager selection process • Ongoing monitoring of fund manage
Slide 22: LifeGoals product launch positions business for growth
INVESTMENT BONDS Centuria LifeGoals product launch in January 2019 positions business for For personal use only growth opportunities ”As successive legislative changes impact superannuation and trust structures for investors, Recognised an opportunity investment bonds are becoming increasingly to de
Slide 23: Strategy
For personal use only SECTION FOUR Strategy 1231 SANDGATE ROAD, NUNDAH, QLD CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 23
Slide 24: Strategy & Outlook: Market commentary and capital management
STRATEGY & OUTLOOK Market commentary and capital management For personal use only MARKET COMMENTARY CAPITAL MANAGEMENT • Low interest rate environment continues to support Centuria has a considerable 19.5% shareholding in Propertylink attractive spreads to property yields (ASX code PLG). • Vacancy r
Slide 25: Strategic outlook
STRATEGY & OUTLOOK Strategic outlook For personal use only STRATEGIC OUTLOOK SPECIFIC AREAS OF FOCUS • Remain focused on securityholder returns and earnings • We are enthusiastic regarding the roll out of the “LifeGoals” growth, supported by stable recurring revenues investment bond product • Assess
Slide 26: Appendices
For personal use only SECTION FIVE Appendices ATP 13 GARDEN STREET EVELEIGH, NSW CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 26
Slide 27: Reconciliation of statutory profit to operating profit
APPENDIX 1 Reconciliation of statutory profit to operating profit For personal use only 1H19 ($m) 1H18 ($m) Statutory net profit after tax 22.2 36.3 Statutory EPS (cents)1 6.4 13.4 Less non-operating items: Unrealised loss/(gain) on fair value movements in derivatives, property and investments (0.9)
Slide 28: Operating segment balance sheet
APPENDIX 2 Operating segment balance sheet For personal use only PROPERTY FUNDS INVESTMENT BONDS MANAGEMENT MANAGEMENT CO-INVESTMENTS CORPORATE 31 DEC 2018 30 JUN 2018 OPERATING BALANCE SHEET ($m) ($m) ($m) ($m) ($m) ($m) ASSETS Cash and cash equivalents 17.8 6.3 10.5 11.3 45.9 76.4 Receivables 20.9
Slide 29: New revenue accounting standard's impact on performance fees
APPENDIX 3 New revenue accounting standard’s impact on performance fees For personal use only AASB 15 Revenue from customers applies to all and rewards have transferred. There is no transitional contracts with customers to deliver goods or services impact from adoption of AASB 15, however future as
Slide 30: Property assets under management movement
APPENDIX 4 Property assets under management movement For personal use only ($) BILLIONS 0.74 0.16 4.80 (0.10) 4.00 30-Jun-18 Acquisitions Divestments Revaluations1 31-Dec-18 1. Based on 100% equity ownership CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 30
Slide 31: Centuria's integrated property platform
APPENDIX 5 Centuria’s Integrated property platform enhances group scalability For personal use only Capital Funds Asset/Property Facilities Property Origination Sources Management Management Management value add Asset Identification Unlisted Fund Direct Tenant Direct Tenant Opportunity Return Analys
Slide 32: Investment bond attributes
APPENDIX 6 Investment bond attributes For personal use only Changing market dynamics present opportunities for investment bonds to supplement investment options Potential for market growth following changes to regulatory and political landscapes ATTRACTIVE INVESTMENT ALTERNATIVES • Tax effective str
Slide 33: Definitions
APPENDIX 7 Definitions Operating Segments: Group has five reportable operating segments. These reportable AUM: Assets under management For personal use only operating segments are the divisions which report to the Group’s Chief Executive Officer and Board of Directors for the purpose of resource all
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by Centuria Capital Limited and Centuria Funds Management Limited as This presentation is provided for general information purposes only. It is not a prospectus, product disclosure For personal use only responsible entity of Centuria Capital Fund (toget
Slide 35: Thank you
For personal use only Thank you CENTURIA CAPITAL GROUP ASX:CNI 1H19 RESULTS 35
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