Investore Property Ltd. · NZX:IPL
Investore Property — FY2018 Earnings Presentation
27 slides from Investore Property's earnings presentation, May 28, 2018
Slide 1: Annual Results for the Year Ended 31 March 2018
ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2018
Slide 2: Agenda & Contents
AGENDA & CONTENTS Page Welcome Philip Littlewood – SIML Chief Executive Officer Highlights 3 Financial Performance 7 Jennifer Whooley – SIML Chief Financial Officer Capital Management 11 Portfolio Strategy and Overview 14 Development and Acquisitions 19 Philip Littlewood – SIML Chief Executive Offic
Slide 3: Highlights
HIGHLIGHTS
Slide 4: Highlights: Financial Performance
HIGHLIGHTS (Prospective Financial Information forecast figures in brackets) FINANCIAL PERFORMANCE Profit after income tax • Net rental income of $44.5m ($44.0m) up $0.6m • Corporate expenses of $5.8m ($5.5m) up $0.3m $46.2m, up $27.0m on • Profit before other income and income tax of $26.8m ($25.8m)
Slide 5: Highlights: Portfolio, Transactions, Capital Management
HIGHLIGHTS (Prior year FY17 figures in brackets) PORTFOLIO NTA per share • Total portfolio value $738.3m ($660.4m), a net valuation gain1 of 3.3%. • • Net Tangible Assets (NTA) backing per share of $1.64 ($1.55) Weighted average lease term (WALT) 13.1 years (14.3 years) $1.64 • FY19 expiries at 2.9%
Slide 6: Delivery of Strategy
DELIVERY OF STRATEGY 2015 2016 2017 2018 2019 Phase 1 Strategy: Portfolio Establishment Phase 2 Strategy: Portfolio Optimisation & Capital Management APR Mitre 10 Mega OCT Investore FEB Animates FEB Acquired three established Acquired 6 Invercargill Bunnings operated Botany by Stride Property large
Slide 7: Financial Performance
FINANCIAL PERFORMANCE
Slide 8: Financial Performance
FINANCIAL PERFORMANCE 2018 2018 Prospective Change Actual Base Case $m $m $m % Net rental income 44.5 44.0 +0.6 +1.4 Corporate expenses (5.8) (5.5) (0.3) (5.9) Profit before net finance expenses, other income/(expenses) and income tax 38.7 38.4 +0.3 +0.7 Net finance expenses (11.9) (12.7) +0.7 +5.7
Slide 9: Distributable Profit
DISTRIBUTABLE PROFIT1 2018 2018 Prospective Change Actual Base Case $m $m $m % Profit before income tax 52.9 25.2 +27.6 +109.7 Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (23.1) 0.6 (23.7) (4,081.9) - Gain on disposal of investment properties (2.9) - (
Slide 10: Financial Summary
FINANCIAL SUMMARY As at As at 31 Mar 2018 31 Mar 2017 Actual Actual Property value ($m) 738.3 660.4 Bank debt drawn ($m) 307.4 261.0 Bank loan to value ratio 41.6% 39.5% Equity ($m) 429.1 405.0 Shares on issue (millions) 261.8 261.8 NTA per share $1.64 $1.55 Adjusted NTA¹ per share $1.64 $1.54 1. Ex
Slide 11: Capital Management
CAPITAL MANAGEMENT
Slide 12: Capital Management – Debt Facilities
CAPITAL MANAGEMENT – DEBT FACILITIES Key transactions Post As at As at Debt facilities Bond 31 Mar 31 Mar ▪ Net debt movement +$46m resulting from five property acquisitions and two disposals issue2 2018 2017 ▪ Approximately $63m of banking facility headroom Debt facility limit (ANZ, BNZ, $370m $370
Slide 13: Capital Management – Cost of Debt
CAPITAL MANAGEMENT – COST OF DEBT Key transactions Post As at As at Cost of debt Bond 31 Mar 31 Mar ▪ $100m fixed rate six year bonds issued 18 April 2018 at a rate of issue1 2018 2017 4.40% p.a. Weighted average cost of debt ▪ $25m six year forward, fixed-to-floating interest rate swap entered (inc
Slide 14: Portfolio Overview
PORTFOLIO OVERVIEW
Slide 15: Portfolio Strategy and Overview
PORTFOLIO STRATEGY AND OVERVIEW As at Portfolio strategy Overview 31 Mar 2018 ✓ Acquisition of properties adjacent to existing Investore properties Number of properties 40 to allow opportunities for future development, or development of Number of tenants 78 existing properties at a tenant’s request
Slide 16: Lease Expiry Profile
LEASE EXPIRY PROFILE PORTFOLIO LEASE EXPIRY PROFILE¹ BY CONTRACT RENTAL2 As at 31 March 2018 FY19 • 2.9% of contract rental expiring in FY19 81% OF PORTFOLIO CONTRACT • Major expiry - Countdown, corner Anglesea & RENTAL > 10 YEARS EXPIRY Liverpool Streets, Hamilton, equating to 1.8% of contract rent
Slide 17: Portfolio Occupancy
PORTFOLIO OCCUPANCY1 99.9% As at 31 Mar 2018 Property Occupancy (%) Vacancy (m2) Total area (m2) 3 - 7 Mill Lane, Warkworth 98.0 76 3,815 Corner Hanson Street, John Street & Adelaide Road, Wellington 98.7 64 4,881 Other 100.0 0 201,284 Total 99.9 140 209,980 1. Calculated as the leased area as a pro
Slide 18: Portfolio Diversification
PORTFOLIO DIVERSIFICATION DIVERSIFICATION IMPROVING WITH Tenant diversification by Contract Rental1 As at 31 March 2018 ACTIVE MANAGEMENT Tenant diversification • Acquisition of three Bunnings operated properties and divestment of two supermarkets enabled Investore to improve its tenant diversificat
Slide 19: Development and Acquisitions
DEVELOPMENT AND ACQUISITIONS
Slide 20: Development Project
DEVELOPMENT PROJECT MITRE 10 MEGA, CORNER TE IRIRANGI DRIVE & BISHOP DUNN PLACE, AUCKLAND • $2.76m premises extension for tenant Mitre 10 Mega, with anticipated completion late 2018 • Additional 1,300m² of net lettable area consisting of an extension to the trade warehouse, new inwards goods area an
Slide 21: Acquisitions
Corner Tremaine Avenue ACQUISITIONS and Railway Road, Palmerston North BUNNINGS HAMILTON, ROTORUA AND PALMERSTON NORTH, PURCHASED FOR $78.5M AT AN INITIAL YIELD OF 6.13% • 100% occupancy • Long WALT of 11.7 years as at 31 March 2018 • Dependable income streams, with net rental of $4.81m pa with a fi
Slide 22: Asset Management Initiative
ASSET MANAGEMENT INITIATIVE ADJOINING PROPERTIES ACQUISITIONS • 12 Heaton Street, Timaru, for $0.4m • 6 & 8 Heaton Street, Timaru, for $1.0m • Properties located immediately adjacent to existing Countdown property • Opportunity to develop further complementary retailers, increasing overall customer
Slide 23: Conclusion
CONCLUSION
Slide 24: Conclusion
CONCLUSION EXECUTION OF STRATEGY Three Bunnings operated Completion of Investore’s foundational phases properties acquired 1. Portfolio establishment • Investore listed on NZX as a specialised large format retail portfolio, $185m capital $78.5m raised 2. Portfolio optimisation and capital management
Slide 25: Appendix
APPENDIX
Slide 26: Appendix: Net Contract Rental and Investment Properties
APPENDIX Net Contract Rental Investment Properties $0.5m $0.1m $3.7m $1.0m $0.2m $79.4m $23.1m $738.3m $4.9m ($0.4m)1 $46.9m ($29.3m) ($1.8m) $660.4m $43.4m As at 31-Mar-17 Acquisitions Developments Rent Building Other Divestments As at 31-Mar-18 As at 31-Mar-17 Acquisitions Capital Stepped Rental D
Slide 27: 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 Investore for the year ended 31 March 2018. Please refer t