Rural Funds Group · ASX:RFF
Rural Funds — FY2015 Earnings Presentation
37 slides from Rural Funds's earnings presentation, Aug 27, 2015
Slide 1: Financial results presentation year ended 30 June 2015
For personal use only Rural Funds Group (RFF) Financial results presentation year ended 30 June 2015 27 August 2015
Slide 2: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (“RFM”) as the responsible entity of Rural Funds Group (“RFF”). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168
Slide 3: Agenda
Agenda For personal use only RFM attendees 1. Highlights David Bryant Managing Director 2. Results 3. Capital management Stuart Waight 4. Outlook Chief Operating Officer 5. Fund features Daniel Yap 6. Portfolio overview Financial Controller 7. Growth opportunities 8. Appendices James Powell Investor
Slide 4: Highlights
For personal use only Highlights
Slide 5: Highlights
Highlights For personal use only FY2015 highlights Further details Net profit before income tax of $9.4m Slide 10 Adjusted funds from operations of $11.0m in line Slide 11 with previous forecast Net Asset Value (NAV) of $1.15 per unit, Slide 33 adjusted NAV of $1.22 per unit Gearing 35.1% Slide 15 F
Slide 6: Results summary
Results summary For personal use only Metrics as at 30 June 2015 Income Net profit before income tax $9,441,000 AFFO $11.0m (pre-tax) and AFFO per Total comprehensive income $10,161,000 unit 9.1 cents in line with previous Adjusted funds from operations (AFFO) $11,009,000 forecast to 30 June 2015
Slide 7: Property revaluations
Property revaluations For personal use only Adjusted property assets reconciliation FY151 260,000,000 249,020,000 10,135,000 250,000,000 240,000,000 12,791,000 1,400,000 227,724,000 230,000,000 -3,030,000 220,000,000 Property assets 30 Poultry Almond orchard Vineyard Tocabil CAPEX Adjusted property
Slide 8: Adjusted net asset value
Adjusted net asset value For personal use only Portfolio by asset type1 RFF owns significant water entitlements, sufficient for the ongoing operation of each key asset 5% 15% Property and Water entitlements are regularly traded in infrastructure secondary markets and are independently valued by
Slide 9: Results
For personal use only Results
Slide 10: FY2015 results
FY2015 results For personal use only Summarised statement of comprehensive income Unrealised loss relating to interest rate 12 mths ended 12 mths ended swaps of $0.73m primary difference to 30 June 2015 30 June 2014 previous forecast of $10.75m $ $ Stapled Rural Funds Trust (RFT) to RF Property
Slide 11: FY2015 results: Composition of AFFO
FY2015 results For personal use only Composition of AFFO (pre-tax) AFFO is pre-tax and excludes fair 12 mths ended 12 mths ended value adjustments, depreciation and 30 June 2015 30 June 2014 impairment to represent RFF’s $ $ property rental business Property revenue 22,218,000 15,882,000 Propert
Slide 12: Capital management
For personal use only Capital management
Slide 13: Capital management
Capital management For personal use only Equity Debt 47% increase since listing from $0.75 to $1.10 at Renegotiated facility pricing during the year to Unit price Margins 30 June 2015 provide lower margins over remaining term Forecast FY16 8.93 cpu, up 4% on FY15 8.59 Facility expires December 2018,
Slide 14: Tocabil development update
Tocabil development update For personal use only Tocabil lease features and development update • Placement and Entitlement Offer completed April 2015 to fund the development of a 600 ha almond orchard leased to Olam Funding Orchards Australia Pty Ltd (Olam) • The property, Tocabil, is situated near
Slide 15: Debt facility
Debt facility For personal use only Debt metrics Key changes for FY15: 30 June 2015 30 June 2014 Negotiated lower debt cost, effective FY16 Term debt facility limit1, 2 $103.0m $97.5m Increased amount and tenor of interest Term debt drawn $89.7m $94.3m rate hedges to more closely align with we
Slide 16: Outlook
For personal use only Outlook
Slide 17: Forecast distributions
Forecast distributions For personal use only FY16 forecast distributions Each lease contains indexation clauses which provide RFF with annual increases in rent, and therefore Record date CPU additional free cash flow that can be distributed to 30 September 2015 2.23 Unitholders. In the coming year
Slide 18: Areas of focus for management
Areas of focus for management For personal use only 1. Managing the growth of funds from operations and therefore distributions per unit 2. Continue to address differential between trading price and adjusted NAV, through: a) Growth via accretive acquisitions b) Increase market awareness RFM continue
Slide 19: Investment criteria
Investment criteria RFF continues to operate in accordance with stated objectives For personal use only RFF’s stated long term objectives - FY15 result Increase net assets Growth in adjusted net assets to $161.5m Without diluting FFO AFFO 9.1 cents per unit in line with forecast Increase distributio
Slide 20: Fund features
For personal use only Fund features
Slide 21: RFF overview
RFF overview RFF is the only pure-play diversified agricultural REIT listed on the ASX For personal use only Asset locations Listed February 2014 $0.75, 52 week high $1.15 Specialised REIT: agricultural assets Quality portfolio of 27 properties deriving revenue New South Wales from 3 primary a
Slide 22: RFF snapshot
RFF snapshot RFF has an attractive forecast distribution supported by a lengthy WALE For personal use only Key statistics 30 June 2015 Key forecasts FY16 Total assets $252.7m Distributions per unit FY16 8.93 cents Net Asset Value (NAV) $151.9m Distribution growth rate 4% Units on issue 132.1m Distri
Slide 23: RFF market price performance
RFF market price performance Total return of RFF compared to S&P/ASX 300 A-REIT and All Ordinaries1 For personal use only RFF total return from 14 February 2014 (listing date) to 30 June 2015 80% Increase for Increase since 70% result period listing 62% 29% 60% 50% Total return 40% 30% 20% 10% 0% -1
Slide 24: Portfolio overview
For personal use only Portfolio overview
Slide 25: Assets and lessees overview
Assets and lessees overview Rural Funds Group (ASX: RFF) is a stapled security For personal use only Rural Funds Trust RF Active Poultry Almond Vineyards Other Assets farms orchards • RFM Poultry (NSX: • Select Harvests • Treasury Wine • 70+ Livestock RFP) (ASX: SHV) Estates (ASX: TWE) Operators (le
Slide 26: Key assets further details
Key assets further details For personal use only Poultry farms Almond orchards Vineyards 13 poultry farms consisting of 134 sheds located Two almond orchards located near Hillston NSW Seven vineyards with 666 ha planted to vines in Griffith, NSW and 20 sheds on 4 farms in of which 1,221 ha leased to
Slide 27: Diversified assets and counterparts
Diversified assets and counterparts For personal use only Portfolio diversification by adjusted asset values1 FY16 forecast revenue by lessee2 3% 3% 6% 15% 14% 36% 44% 4% 17% 39% 14% 5% Poultry farms Almond orchards RFM Poultry (NSX: RFP) Olam Orchards Australia Almond orchards under development Vin
Slide 28: Growth opportunities
For personal use only Growth opportunities
Slide 29: Spectrum of investment opportunities
Spectrum of investment opportunities RFF will pursue acquisitions of additional assets to grow the quantum and diversity of its earnings For personal use only The investment strategy is to invest across the full range of the asset continuum shown below, with the objective of ensuring the asset mix
Slide 30: Appendices
For personal use only Appendices
Slide 31: Reconciliation of net profit after tax to AFFO
FY2015 results For personal use only Reconciliation of net profit after tax to AFFO Table adds back non cash items to 12 mths ended 12 mths ended reconcile net profit after tax to AFFO 30 June 2015 30 June 2014 Major items for FY2015 $ $ Net profit before tax 9,441,000 3,402,000 – $0.73m unreali
Slide 32: Summarised balance sheet
FY2015 results For personal use only Summarised balance sheet Net assets $151.9m As at As at NAV per unit $1.15 30 June 2015 30 June 2014 $ $ Adjusted NAV per unit $1.22 refer to Cash 712,000 2,723,000 slide 33 for reconciliation Property investments 239,445,000 227,724,000 Equity raising to
Slide 33: Adjusted balance sheet
FY2015 results For personal use only Adjusted balance sheet Water entitlements are held at cost Statutory Adjusted based on ASIC guidance and balance sheet Revaluation of balance sheet accounting standards at water at 30 June 2015 entitlements 30 June 2015 External valuations at 30 June 2015 As
Slide 34: Property investment reconciliation
FY2015 results For personal use only Property investment reconciliation Investment Biological Intangible Financial Total property assets assets1 assets2 $ $ $ $ $ Balance as at 30 June 2014 138,108,000 65,506,000 23,590,000 520,000 227,724,000 Acquisition – Tocabil Station 3,525,000 2,114,000 - 5,63
Slide 35: About RFM
About RFM RFM is one of the oldest and most experienced agricultural funds management organisations in For personal use only Australia Rural Funds Management Limited (RFM) is an experienced fund and asset manager that specialises in Australian agriculture Established in 1997, RFM has historicall
Slide 36: RFM board and management team
RFM board and management team RFF is externally managed and governed by a highly experienced management team and board For personal use only Board of directors Contact • Joined RFM in 2003 • RFM Company Secretary • Former director of broking firm JBWere with more than • Responsible for reviewing and
Slide 37: Corporate information
Corporate information For personal use only Rural Funds Management Limited ACN 077 492 838 AFSL 226701 Canberra Office Level 2 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 Website: www.ruralfunds.com.au For further information: For media enquiries: Investor rel