Stride Property Group · NZX:SPG
Stride Property — FY2017 Earnings Presentation
34 slides from Stride Property's earnings presentation, May 30, 2017
Slide 1: Stride Property Group Annual Results
Stride Property Group (NS) Annual Results For the year ended 31 March 2017 30 May 2017
Slide 2: Agenda & Contents
Agenda & Contents Page Welcome Tim Storey – Chairman Highlights Philip Littlewood – General Manager, Investment 3 Management Financial Performance 7 Jennifer Whooley – Chief Financial Officer Capital Management 12 Portfolio Overview 15 Development Projects 20 Philip Littlewood – General Manager, Inv
Slide 3: Highlights
Highlights Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 3
Slide 4: Highlights
Highlights Stride Property Group1 listed on the NZX Main Board on 12 July 2016 Demerger of Investore Property Limited and retention of 19.9% shareholding Growth of real estate investment management (REIM) business Restructure of Diversified NZ Property Trust and settlement of acquisition of two shop
Slide 5: Highlights (Compared to Prospective Financial Information)
Highlights (Compared to Prospective Financial Information for FY17 figures in brackets) On 10 June 2016, Stride issued an Explanatory Memorandum for the purposes of a special meeting of shareholders. The following is a comparison of the prospective financial information in the Explanatory Memorandum
Slide 6: Highlights (Portfolio, Developments and Divestments)
Highlights (Prior period FY16 for Stride Property Limited figures in brackets) Portfolio • Net 2.7% property portfolio valuation increase¹ • Stride loan to value ratio (LVR) 38.8%2 (41.7%) Net valuation increase • Net Tangible Assets (NTA) backing per share $1.67 • • 270 lease transactions over 246,
Slide 7: Financial Performance
Financial Performance Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 7
Slide 8: Financial Performance
Financial Performance Stride Property Group - Consolidated 2017 2017 Prospective Change Actual Base Case $m $m $m % Net rental income 63.6 63.3 0.3 0.4 Management fee income 8.5 9.2 (0.6) (6.8) Corporate expenses (15.6) (15.4) (0.1) (0.8) Profit before net finance expenses, other income and income t
Slide 9: Distributable Profit
Distributable Profit Stride Property Group - Consolidated 2017 Change 2017 Prospective Actual Base Case $m $m $m % Profit before income tax (from continuing and discontinued operations) 65.5 40.7 24.7 60.8 Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (2
Slide 10: AFFO Distributable Profit
AFFO Distributable Profit Stride Property Group - Consolidated 2017 Change 2017 Prospective Actual Base Case $m $m $m % Distributable profit after income tax 37.7 37.2 0.4 1.2 Adjustments to funds from operations: - Maintenance capital expenditure (5.8) (10.4) 4.6 44.0 Adjusted Funds From Operations
Slide 11: Financial Summary
Financial Summary Stride Property Group - Consolidated 2017 2016 Property value1 ($ millions) 895.32 1,274.8 Bank debt drawn ($ millions) 347.5 532.2 Bank loan to value ratio (LVR) 38.8%3 41.7% Equity ($ millions) 607.9 719.4 Shares on issue (millions) 364.9 364.4 NTA per share (refer Appendix 2) $1
Slide 12: Capital Management
Capital Management Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 12
Slide 13: Capital Management
Capital Management Stride Property Limited Bank Debt As at 31 Mar 2017 Covenant Key Transactions: Demerged Investore, including: Loan to Value Ratio (Bank Debt / • 38.8%1 ≤ 50% Property Values) o $160m of available banking facility $374m of investment properties Interest Cover Ratio (EBIT / o 2.922
Slide 14: Capital Management: Interest rate hedging
Capital Management Stride Property Limited Interest rate hedging Key Transactions: • Demerged $110m swaps to Investore, with rates of 3.1% - 3.2% • $40m swaps expired over FY17, with rates ranging from 4.0% - 5.1% • Replaced with additional hedging: • $25m current at 2.9% and remaining tenor of 4.75
Slide 15: Portfolio Overview
Portfolio Overview Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 15
Slide 16: Portfolio Summary
Portfolio Summary Stride Property Limited Top Ten Tenants2 by Contract Rental1 Lease Expiry Profile3 by Contract Rental1 As at 31 Mar 2017 As at 31 Mar 2017 As at As at % of Portfolio Contract Rental % of Portfolio Contract Rental Overview 31 Mar 2017 31 Mar 2016 0% 2% 4% 6% 8% 10% 0% 5% 10% 15% 20%
Slide 17: Major Lease Transactions Completed
Major Lease Transactions Completed Stride Property Limited Annual Contract Term Rental Tenant Property Commencement Area (m2) (years) ($000) Freedom Furniture 65 Chapel Street, Tauranga April 2017 889 3 1901 NZ Merchants 20 Rockridge Avenue, Auckland April 2017 10,239 3 8401 French Country Collectio
Slide 18: Remaining Lease Expiries FY18 & FY19
Remaining Lease Expiries FY18 & FY19 Stride Property Limited FY18 Net Lettable % of Property Tenant Area (m2) Contract Rental 11 Springs Road, Auckland Lion-Beer, Spirits & Wine 21,349 3.18 Johnsonville Shopping Centre (50%), Wellington Various 4,551 2.45 15 Ride Way, Auckland New Zealand Post 6,027
Slide 19: Portfolio Occupancy 96.8% (by area)
Portfolio Occupancy 96.8% (by area) Stride Property Limited Occupancy (%) Vacancy (m2) Total Area (m2) Occupancy (%) Property 31 Mar 2017 31 Mar 2017 31 Mar 2017 31 Mar 2016 21-25 Teed Street, Auckland 97.9 86 4,071 100.0 22 The Terrace, Wellington 100.0 0 4,780 91.1 Other 100.0 0 39,795 100.0 Offic
Slide 20: Development Projects
Development Projects Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 20
Slide 21: NorthWest Two
NorthWest Two • Opened in October 2016 • Comprises four separate buildings with 7,700m2 of office, dining and retail space • The combination of NorthWest Shopping Centre and NorthWest Two now provides a wide range of options for shopping, relaxing and dining Stride Property Group — Annual Results Pr
Slide 22: Rockridge Avenue, Auckland
Rockridge Avenue, Auckland • $16.5m development is underway at Rockridge Avenue, Penrose, the heart of Auckland’s prime industrial and commercial real estate • Excellent access to the main arterial routes • Project includes buildings with 8,100m2 of space on a site of 1.23ha • Anticipated completion
Slide 23: REIM Business
REIM Business Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 23
Slide 24: Dividend per share growth
Dividend per share growth 2016 2017 2018 Actual Actual Forecast (cps) (cps) (cps) Dividend per share – Stride Property Group 10.75 9.96 9.91 Dividend per share – Investore1 - 5.35 7.46 Total dividend per share2 10.75 11.30 11.78 Dividend per share growth p.a. n/a 0.55 0.48 Dividend per share growth
Slide 25: Portfolio Valuation: Owned and Managed properties
Portfolio Valuation: Owned and Managed properties 1 Valuations as at 31 March 2017. 2 Includes NorthWest Two, Auckland, which is classified as inventory in the financial statements. 3 Includes Johnsonville Shopping Centre, Wellington, which is owned 50/50 by Stride and Diversified Trust. Stride Prop
Slide 26: Portfolio Composition (by Contract Rental)
Portfolio Composition (by Contract Rental¹) 1 Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to Stride by that tenant under the terms of the relevant lease as at 31 March 2017, annualised for the12 month period on the basis of the occupancy level for the rel
Slide 27: REIM Fee Income (FY11-FY18)
REIM Fee Income (FY11-FY18) ($m) 1 Represents total SIML management fee income including Stride, which is eliminated on consolidation in the Consolidated Financial Statements for FY17 and Prospective Financial Information. Values may not sum accurately due to rounding. Stride Property Group — Annual
Slide 28: Conclusion
Conclusion Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 28
Slide 29: Conclusion
Conclusion Execution of Strategy • Stride Property Group listed on the NZX Main Board on 12 July 2016 • Stapled structure of Stride Property Group provides ability to grow REIM business • Demerged Investore, the specialist large format retail property investment company, and SIML remains the manager
Slide 30: Appendices
Appendices Stride Property Group — Annual Results Presentation for the year ended 31 March 2017 - 30 May 2017 30
Slide 31: Appendix 1: Valuation Movement
Appendix 1 31 Mar 17 Revaluation Revaluation Market Cap Market Cap Stride Property Limited Valuation Movement¹ Movement¹ Rate 2017 Rate 2016 Address City $m % $m % % 33 Corinthian Drive Auckland 46.1 6.2 2.5 6.30 6.38 7-9 Fanshawe Street Auckland 9.5 (24.2) (2.9) 10.50 9.75 80 Greys Avenue Auckland
Slide 32: Appendix 2: Profit before Other Income and Income Tax
Appendix 2 Profit before Other Income and Income Tax (refer note 28: Explanatory Memorandum Financial Information of the consolidated financial statements for FY17) 47.0 $3.5m $6.7m $44.7m 45.0 ($1,668,000.0m) 43.0 41.0 $0.8m ($3,817,000.0m) 39.0 $37.5m ($9,241,000.0m) 37.0 ($3,510,000.0m) 35.0 33.0
Slide 33: Appendix 2: Investment Properties and NTA
Appendix 2 1,300 Investment Properties (excludes the value of inventory of $36.2m) $1,216.7m 1,200 1,100 1,000 900 $859.0m $22.3m $5.3m 800 ($374.0m) ($11.3m) 700 31 Mar Demerger Disposals Capex & Revaluation 31 Mar 2016 lease incentives 2017 NTA $2.20 $0.07 $2.10 $0.10 ($0.02) $0.01 $ 0.01 $2.00 $1
Slide 34: Thank you
Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the year ended 31 Marc