Eureka Group Holdings Limited · ASX:EGH
Eureka — Investor Presentation (October 2024)
40 slides from Eureka's investor presentation, Oct 24, 2024
Slide 1: Step-change Acquisition and Growth Strategy
Step-change Acquisition and Growth Strategy Underwritten $70.4m Equity Raising October 2024
Slide 2: Contents
Contents Overview About Eureka Transaction Overview Equity Raising Appendix
Slide 3: Overview
Overview Increases Eureka’s units under management by 13.5% and provides capital for village expansions and Acquisitions • Eureka has entered into heads of agreement, is in due diligence or advanced discussions to acquire 441 units across 7 villages and has acquired or is in advanced discussions to
Slide 4: Strategic Rationale
Strategic Rationale Provides Eureka with the capital to quickly scale and execute on acquisition opportunities Consolidates market position and enhances 1 scale Step-change in growth profile 2 Compelling Acquisitions 3 Supportive market tailwinds and resilient 4 business Positive financial impact 5
Slide 5: Capital supports significant growth opportunities
Capital supports significant growth opportunities Demonstrates Eureka’s deep origination and execution capability Acquisitions under Heads of Agreement – 2 Villages Acquisitions in Due Diligence or Advanced Discussions – 5 Villages • Adelaide Hills – subject to exchange and completion of contracts •
Slide 6: About Eureka
About Eureka 6
Slide 7: Scalable affordable build-to-rent seniors living portfolio
Scalable affordable build-to-rent seniors living portfolio Eureka is the only ASX-listed pure play specialist in seniors’ rental accommodation NATIONAL FOOTPRINT (as at 30 June 2024) PORTFOLIO SNAPSHOT (as at 30 June 2024) 52 2,835 $328m Villages Units under management Assets under management QLD $1
Slide 8: Over 50s rental offers significant growth opportunities
Over 50s rental offers significant growth opportunities Housing market dynamics supports the need for affordable seniors’ rental accommodation HIGH LEVELS OF DEMAND CONSTRAINED SUPPLY MODULAR HOUSING SOLUTIONS • Consistently high occupancy rates of >96% • Deteriorating affordable housing project • R
Slide 9: Over 50s rental offers significant growth opportunities
Over 50s rental offers significant growth opportunities Shares many attributes with residential land lease communities 10 years ago TARGET KEY REGIONAL MARKETS GOVERNMENT-SUPPORTED REVENUE GOVERNMENT FUNDING SUPPORTS • Many seniors/downsizers moving to • Stable source of revenue as pension • State a
Slide 10: Cash flows backed by the Australian Government pension
Cash flows backed by the Australian Government pension Government backed age pension and rent assistance payments support Eureka’s revenue streams Commentary Payments backed by Government Age pension payments Rent assistance payments Rental payments Accommodation and catering services 1. Services Au
Slide 11: Seniors' rental offers compelling yields
Seniors’ rental offers compelling yields Eureka is trading at compelling yields with potential for significant capital valuation upside • Core Australian property sectors are characterised FY24 Eureka Cap Rate vs. Comparative Sector Yields by yields between 5.9% to 6.6% (excluding land lease and met
Slide 12: Eureka's pathway to growth
Eureka’s pathway to growth Building long term value via a disciplined growth plan, backed by a resident first philosophy INTERNAL EFFICIENCIES AND ORGANIC OPPORTUNITIES EXPAND EXTERNAL CAPITAL AND VILLAGE OPPORTUNITIES • Unwavering focus on resident experience and building community • Execute on ide
Slide 13: Building Blocks of EPS Growth over next three years
Building Blocks of EPS Growth over next three years EPS Growth driven by organic growth and external opportunities >95% of Eureka’s residents receive government support payments which are indexed bi-annually by >CPI rental growth Rent Growth at least CPI 70 unit pipeline of managed units to be acqui
Slide 14: Strong Management Team
Strong Management Team Eureka’s management are well positioned to deliver on future growth objectives Simon Owen Laura Fanning Michael Heffernan Andrew Hudson Chief Executive Officer Chief Financial Officer Head of Real Estate Head of Operations • Simon is a highly experienced and • 25 years’ financ
Slide 15: Trading Update
Trading Update Occupancy levels remain at 98% with macro tailwinds underpinning future demand • Occupancy presently tracking at 98% - near record high levels Eureka’s rental villages continuing to • Pension increase of 4.1% for six months to September 2024 – expect FY25 same unit rental growth of 5
Slide 16: Transaction Overview
Transaction Overview 16
Slide 17: Eureka Portfolio Impact
Eureka Portfolio Impact Acquisitions expected to deliver a material uplift in portfolio value Key Metrics 30 June 2024 Post Acquisitions Change Owned 28 33 17.9% 21.6% 13.5% Managed 13 11 (15.4%) Growth in Investment Properties Growth in units under Joint Venture 5 7 40.0% value management Managed F
Slide 18: Growing Eureka's Units Under Management
Growing Eureka’s Units Under Management Step-change growth strategy underpins material increase in units under management post transaction 2,147 2,191 2,507 2,551 2,835 3,217 Total Units Total Units Total Units Total Units Total Units Total Units 50 321 321 13.5% 363 254 Growth 254 254 473 254 254 7
Slide 19: Boutique Seniors Rental Village, Adelaide Hills SA
Boutique Seniors Rental Village, Adelaide Hills SA DESCRIPTION ACQUISITION OVERVIEW • Asset is located ~30km southeast of Adelaide CBD, in the Adelaide Hills district • Comprises 54 single bed units catering for both singles and couples spread across 7 separate single level buildings and a 3 bed man
Slide 20: Capital Management
Capital Management Robust balance sheet positioned for growth Pro Forma • Core $96m bank facility in place until 2026, with no Acquisitions principal repayments required until expiry. Key Metrics FY24 Change and Equity Additional $5m facility in place until October 2025 Raising • Domestic banks have
Slide 21: Equity Raising
Equity Raising 21
Slide 22: Equity Raising Summary
Equity Raising Summary $70.4m fully underwritten Equity Raising • Fully underwritten institutional Placement of New Shares to raise $15.0m (“Placement”)1 • Fully underwritten 1 for 3.4 accelerated non-renounceable pro-rata entitlement offer of New Shares to raise $55.4m (“Entitlement Offer”) compris
Slide 23: Sources and Uses of Proceeds
Sources and Uses of Proceeds Sources of Proceeds $m • Equity Raising will raise approximately $70.4 million Placement 15.0 • The Equity Raising will fund the acquisition of $19.6 million of villages under Entitlement Offer 55.4 heads of agreement, $30.3 million of villages in due diligence or advanc
Slide 24: Pro Forma Balance Sheet
Pro Forma Balance Sheet Strong balance sheet with capacity to undertake future acquisitions and development opportunities Shares issued post Equity Raising and [$m] 30-Jun-24 Pro forma Pro forma balance date1 Acquisitions Cash 2.3 2.3 2.3 Investment Properties and JV interests 251.6 251.6 57.4 309.0
Slide 25: Equity Raising Indicative Timetable
Equity Raising Indicative Timetable Key Event Date 2024 Trading halt and announcement of the Acquisitions and Equity Raising Thursday, 24 October Institutional Entitlement Offer and institutional Placement conducted Thursday, 24 October Trading halt lifted and trading re-commences on an ex-entitleme
Slide 26: Guidance and Outlook
Guidance and Outlook • Eureka has entered into heads of agreement, is in due diligence or advanced discussions to acquire 441 units across 7 villages and has acquired or is in advanced discussions to acquire 38 single units across 4 managed villages with a total expected investment of $49.9m and has
Slide 27: Appendix
Appendix 27
Slide 28: Key Risks
Key Risks General Risks This section discusses some of the key risks associated with an investment in Eureka. A number of risks and uncertainties may adversely affect the operating and financial performance or position of Eureka and in turn affect the value of Eureka shares. These include specific r
Slide 29: Key Risks
Key Risks Eureka’s properties are subject to environmental risks including loss of property and profits due to bushfires, floods, cyclones, erosion of waterways and other Environmental and events. These risks and potential losses may increase in the future if the climate continues to change. Eureka
Slide 30: Key Risks
Key Risks Eureka undertakes property development. Such projects have a number of risks including (but not limited to): delays or issues around planning, application and regulatory approvals; development cost overruns; environmental costs; project delays; issues with building and supply contracts; ex
Slide 31: Key Risks
Key Risks Eureka currently has bank debt which contains certain financial and operational covenants. Any breach of these covenants could result in the early enforced repayment of debt. Such repayment could incur capital losses if assets need to be sold in a short period or shareholders may be dilute
Slide 32: International Restrictions
International Restrictions This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). The New Shares are not being offered to the public within New Zealand other than to existing shareholders of th
Slide 33: Key terms of Underwriting Agreement
Key terms of Underwriting Agreement Eureka has entered into an underwriting agreement (“Underwriting Agreement”) with MA Moelis Australia Advisory Pty Ltd ACN 142 008 446 and Morgans Corporate Limited ACN 010 539 607 (together, the “Joint Lead Managers”) who have agreed to act as joint lead managers
Slide 34: Key terms of Underwriting Agreement
Key terms of Underwriting Agreement • (Unable to issue shares) Eureka is prevented from allotting and issuing the shares to be allotted or issued under the Equity Raising within the times required. • (ASIC modification or ASX approval) Any ASIC modification, ASX approval, or other regulatory approva
Slide 35: Key terms of Underwriting Agreement
Key terms of Underwriting Agreement • * (Representations and warranties) A representation, warranty or undertaking or obligation contained the Underwriting Agreement on the part of Eureka is breached, becomes not true or correct or is not performed. • * (Change in law) There are changes in applicabl
Slide 36: Key terms of Underwriting Agreement
Key terms of Underwriting Agreement • (New circumstance): • An obligation arises on Eureka to give ASX a notice in accordance with section 708AA(12) of the Corporations Act (as notionally inserted by Instrument 2016/84); or • * An event or circumstance occurs or becomes known that would, in the reas
Slide 37: Definitions
Definitions Balance sheet gearing Calculated as net debt (being interest-bearing drawn debt net of cash) divided by net debt plus equity Underlying EBITDA An unaudited non-IFRS measure that represents the operating performance EBITDA of the Group and excludes valuation adjustments, asset disposals a
Slide 38: Disclaimer
Disclaimer Purpose Accuracy of projections and forecasts This presentation (Presentation) is dated 24 October 2024 and has been prepared by Eureka Group This Presentation includes certain statements, opinions, estimates, projections and forward- Holdings Limited (ABN 15 097 241 159) (Eureka). This P
Slide 39: Disclaimer (continued)
Disclaimer (continued) Joint Lead Managers The Joint Lead Managers and their respective affiliates and related bodies corporate may purchase, Eureka has engaged the Joint Lead Managers to act as sole bookrunners, joint lead managers and sell or hold a broad array of investments (including holding se
Slide 40: Contact details
Contact details Eureka Group Holdings Limited ABN 15 097 241 159 REGISTERED OFFICE Level 5, 120 Edward Street Brisbane QLD 4000 POSTAL ADDRESS GPO Box 2245 Brisbane QLD 4000 07 2145 6322 info@eurekagroupholdings.com.au eurekagroupholdings.com.au ENQUIRIES Simon Owen, Chief Executive Officer Laura Fa
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