Slide 1: FY13 Financial Year Results Presentation
For personal use only Welcome to the 2013 Financial Year results presentation. This is Clem Salwin, chief executive of Aspen. Also on the call, I am joined by Brett Fullarton our CFO, Adam Marrs Ekamper, our group financial controller and other members of the management team. 1
Slide 2: Topics to cover
For personal use only Today, I would like to cover off 4 topics. I would like to share my analysis of our business since commencing last month, and outline our strategy to restore value. I will then review the financial results over 2013 and provide an update on our business lines. I will conclude w
Slide 3: FY13 performance key points
For personal use only The last financial year has been one of major change for the business. Importantly, the business is clearly on a path of simplification, focus and de‐leveraging. There have been substantial areas of progress on the strategic initiatives announced at the 2012 AGM. The business h
Slide 4: Analysis of the business and strategy to restore value
For personal use only Turning now to our analysis of the business and the strategy of restoring value. An apt descriptor of the Aspen business historically has been “complexity”; especially for a business of this size size. It has been complex in the breadth of its property segments: office office,
Slide 5: Business areas and strategy
For personal use only Aspen has 3 business areas: • accommodation; • commercial property; and • non‐core assets. These first two were together what was designated at the time of the 2012 equity raising as “core”. To summarise our strategy to restore value with these business areas: ‐ for our accommo
Slide 6: Accommodation business
For personal use only Our accommodation business comprises two activities: ‐ the ownership of the Aspen Karratha Village, a transient (or FIFO) worker accommodation facility; ‐ the management and 9% co‐investment in the Aspen Parks Property Fund. The accommodation industry generally has strong long
Slide 7: Commercial property portfolio strategy
For personal use only Our commercial property portfolio comprises interests in 4 office and industrial properties, with a value of $311 million. Our value strategy here is to look to dispose of the entire portfolio. The rationale for looking to dispose of the portfolio is as follows: ‐ there is a ve
Slide 8: Disposal process and use of proceeds
For personal use only We expect to commence the disposal process shortly. The current expectation of use of proceeds is to: ‐ pay down of debt; ‐ return capital to shareowners; and ‐ potential investment for other business purposes. To this end, we will be seeking shareowner approval at the upcoming
Slide 9: Business value build to assessed NTA
For personal use only This next chart illustrates the business value proposition in these three areas. This builds to the assessed NTA per share of 22 cents. As Aspen is quite complex, I would like to spend a bit of time to clearly go through this NTA build. In the interests of clarity and transpare
Slide 10: Financial results for FY13
For personal use only I turn now to the financial results for FY13. The year has seen major changes to the Group financial position, including the equity raising conducted in September 2012. 10
Slide 11: Core earnings
For personal use only Core earnings here are as defined at the time of the equity raising and comprise earnings from what are now designated the commercial property portfolio and the accommodation business. The Group’s core operating result for FY13 was $23.4 million or 2.0 cents per share. This exc
Slide 12: Group financial result
For personal use only Moving to the overall Group financial result. Non‐core operating profit relates to the non‐core assets that were described previously. This generated an operating loss of $7.0 million or 0.6 cents per share over the year. Below the operating line, there were non‐cash valuation
Slide 13: Statutory balance sheet
For personal use only Turning now to the statutory balance sheet. We have covered off the balance sheet in the build of value in quite some detail a few moments ago. The key observation I would make on the balance sheet is the decline in gearing achieved over the year, from 46% to 40%. 13
Slide 14: Assessed NTA
For personal use only Moving to the assessed NTA. The Group’s statutory NAV per share as at 31 December 2012 was 26 cents per shareshare. This was down from NAV of 41 cents per share as at 30 June, largely due to the impact of the entitlement offer. Since 31 December, the changes in NAV have been sm
Slide 15: Debt structure
For personal use only Turning now to our debt structure. As I just mentioned, gearing has fallen over the last 12 months from over 46% to currently 40%. During the year, the core debt facility was extended by one and a half years to August 2015. 5 year term debt was also put in place with respect to
Slide 16: Overheads and restructuring
For personal use only As I said at the outset, a key consequence of complexity is that it is both difficult to manage and expensive to manage. This has been reflected in Aspen’s overhead which has historically been very high. Now that we are now simplifying the business, we are now accelerating the
Slide 17: Operational performance of business lines
For personal use only I will now turn to a brief examination of the operational performance of our business lines, commencing with the accommodation business. This is a strong business, albeit one which is currently experiencing the impact of the very significant downturn in mining related capital e
Slide 18: Aspen Karratha Village
For personal use only Aspen Karratha Village is a 180 room Transient Worker Accommodation (or TWA) facility, designed for FIFO (Fly‐in, Fly‐out) workers for the resources/mining services industry. In terms of market positioning, the property is at the upper end of specification for TWAs and it is a
Slide 19: Aspen Parks Property Fund
For personal use only Aspen Parks Property Fund is an unlisted property fund managed by Aspen. As at 30 June, there were 21 parks in the portfolio with a total value of $311 million. Gearing, net of cash, stood at 36%. Distributions per/security for the FY13 year were 10.9 cents per security. Given
Slide 20: Aspen Parks Fund priorities
For personal use only Our priorities for the fund are essentially three fold. Firstly, the performance of the mining related parks. These are not TWA facilities like Aspen Karratha, but have been providing accommodation to mining services users. These assets (three in the northwest of WA and a fourt
Slide 21: Commercial property portfolio
For personal use only Turning now to the commercial property portfolio. The portfolio comprises interests in 4 properties, with a total value of $311 million. The weighted average cap rate was 8.8% and WALE was 5.6 years. All these are 100% freehold interests, save for the interest in the ATO Buildi
Slide 22: Non-core assets
For personal use only We remain focussed on the disposal of all non‐core assets, realising value in an orderly manner, at the same time minimisingg costs and cash requirements. q During the year, $203 million of non‐core assets were sold, including the assets in the Diversified Fund that settled pos
Slide 23: Action steps for FY14
For personal use only To sum up, with our action steps for FY14 23
Slide 24: FY14 priorities
For personal use only As I mentioned at the outset, FY13 was a year of making progress on business focus and ssimplification. p cat o In FY14 wee will cocontinue t ue with t tthiss goal. goa The immediate priorities of action in our strategy to restore value are as follows: ‐ commence the disposal p
Slide 25: Closing remarks
For personal use only There are no doubt challenges within both our operating environment and Aspen itself. However, we are very committed to a strategy of restoring value. This strategic process is accelerating. Looking to dispose of the commercial property portfolio is a major new step in this str
Slide 26: Disclaimer
Disclaimer aspen This presentation has been prepared by Aspen Group (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anything in it shall