Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — FY2019 Earnings Presentation
28 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 20, 2019
Slide 1: FY19 Results Presentation
FY19 RESULTS PRESENTATION 20 AUGUST 2019 www.apngroup.com.au ASX Code: AQR
Slide 2: Agenda
Agenda 01 Snapshot 02 Financial performance 03 Investment overview 04 Market update 05 Outlook and guidance Appendices 2
Slide 3: 01 Snapshot
01 SNAPSHOT Raceview Convenience Centre, QLD 3
Slide 4: APN Convenience Retail REIT
APN Convenience Retail REIT Our strategy The opportunity ▪ Investing in strategically located ▪ Secure and sustainable long-term income growth with 79% of portfolio income services station and convenience subject to fixed annual increases of 3% or more retail assets with long term leases to ▪ Strong
Slide 5: FY2019 snapshot
FY2019 snapshot Financial performance Portfolio performance Capital management 20.9c 11.7 years 32.3% DISTRIBUTION PER SECURITY WALE GEARING 5.8% on FY20181 21.5c 96.9% 60.3% FFO PER SECURITY OF INCOME FROM MAJOR DRAWN DEBT 6.4% on FY20181 SERVICE STATION TENANTS HEDGED $2.96 2.9% 4.2x NTA PER SECUR
Slide 6: 02 Financial Performance
02 FINANCIAL PERFORMANCE Puma Rutherford, NSW 6
Slide 7: FY2019 financial performance
FY2019 financial performance Transparent income streams and capital structure A$m FY2019 FY20181 ▪ FFO for the period of 21.5 cents per security Net property income 24.7 20.7 exceeded FY2018 annualised by 6.4% Straight lining of rental income 4.5 4.6 ▪ Net property income increased due to: Interest
Slide 8: Balance sheet
Balance sheet NTA per security increased by 9 cents (+3.1%) in FY2019 June June A$m 2019 2018 Change ▪ $17.9 million increase in investment properties from: Assets – Revaluation uplift of $10.6m Cash and cash equivalents 0.3 2.8 Large – Acquisition of Mount Larcom for $7.3m in August Investment Prop
Slide 9: Capital management
Capital management Healthy balance sheet position Key metric June 2019 ▪ Expanded finance syndicate following the introduction Gearing 32.3% of a new and third financier ICR – Facility limit remains unchanged at $125 million 4.2x (undrawn amount of $9.0 million) Average all-in cost of debt (includin
Slide 10: 03 Investment Overview
03 INVESTMENT OVERVIEW Caltex Woolworths Capalaba, QLD 10
Slide 11: Attractive convenience retail portfolio – long leases to quality tenants
Attractive convenience retail portfolio – long leases to quality tenants 6.5% 75.6% 32.3% 100% CASH DISTRIBUTION TAX GEARING OCCUPANCY YIELD1 DEFERRED 70 $358m 7.0% 11.7 PROPERTIES PORTFOLIO WACR WALE VALUE (YEARS) DIVERSIFIED AND DEFENSIVE LONG LEASE PORTFOLIO SUSTAINABLE AND GROWING INCOME ALIGNED
Slide 12: Diversified portfolio
Diversified portfolio Major tenants 90% of portfolio located in Australia’s 69% eastern seaboard states ~78% of Australia’s population live in the eastern seaboard states1 18% 9% Major tenants account for 1% 97% of portfolio income Complementary 3% retail 66% Portfolio by site classification 10% 16%
Slide 13: Sustainable and secure income through long dated leases
Sustainable and secure income through long dated leases Rent review type by income ▪ Attractive lease expiry profile – 77% of lease income expiring FY2030 and beyond 21% ▪ 79% of portfolio income subject to fixed annual increases of 3% or more ▪ Forecast average annual rental growth of 2.9% across t
Slide 14: Acquisition strategy
Acquisition strategy Maintaining patience and a disciplined approach ▪ AQR continues to actively review acquisition opportunities while maintaining a patient and focused approach, ensuring that they are attractively priced and the meet our strict investment criteria including: – Further portfolio di
Slide 15: APN Property Group – aligned and experienced manager
APN Property Group – aligned and experienced manager Strong investor Focused and Governance Manager with long alignment dedicated overseen by an track record and ▪ APN is strongly aligned to management team independent Board deep relationships delivering investor returns – owning a $30 million co- ▪
Slide 16: 04 Market Update
04 MARKET UPDATE Puma Kempsey South, NSW 16
Slide 17: Market overview
Market overview Consumer demand for a broader range of convenience products is as important as the fuel offering ▪ Convenience retail sales (excluding fuel) grew by 2.4% to $8.6 billion in 20181. – Hot Beverages remain the fastest growing category, up 14.6% – Take Home Food category up 10.1% – On-th
Slide 18: 05 Outlook and Guidance
05 OUTLOOK AND GUIDANCE Caltex Woolworths Mitchelton, QLD 18
Slide 19: FY2020 earnings guidance
FY2020 earnings guidance Ideally positioned to deliver sustainable long-term income growth for securityholders DPS guidance1 FFO guidance1 ~98% payout ratio of 21.8 cps of 22.3 – 22.5 cps of FFO 4.3% on FY2019 4.0% – 4.8% on FY2019 Raceview Convenience Centre, QLD 1. Subject to current market condit
Slide 20: Appendices
APPENDICES | Property Group
Slide 21: Profit and Loss statement
Profit and Loss statement FY2019 FY20181 $’000 $’000 Income Net property income 24,732 20,721 Straight lining of rental income 4,473 4,612 Interest income 22 55 Total income 29,227 25,388 Expenses Management fees (2,295) (1,876) Corporate costs (684) (644) Finance costs (5,186) (4,223) Total expense
Slide 22: Reconciliation to FFO
Reconciliation to FFO FY2019 FY20181 $’000 $’000 Statutory net profit 24,001 15,437 Adjusted for: Straight line lease revenue recognition (4,473) (4,612) Fair value gain on investment properties (5,341) (951) Fair value loss on derivatives 2,402 142 Add back IPO and liquidity offer transaction costs
Slide 23: Portfolio revaluations
Portfolio revaluations 3.0% revaluation uplift in FY2019 Valuation change ▪ $10.6 million or 3.0% revaluation uplift No. of Valuation Cap Site type ▪ Valuation gains driven by a combination of annual rent properties ($m) rate ($m) % increases and cap rate compression Metropolitan 50 $227.0 6.9% $6.5
Slide 24: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) 440 Roadhouse WA Puma Regional $4.7 8.25% 15.1 100% 11,372 Aeroglen QLD Puma Metropolitan $3.7 7.00% 14.5 100% 3,224 Atherton QLD Puma Metropolitan $1.9 7.25% 15.5
Slide 25: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Hamilton Hill WA Puma Metropolitan $4.6 7.00% 14.1 100% 1,998 Kedron QLD Puma Metropolitan $3.4 6.75% 16.1 100% 1,604 Kempsey South Service Centre NSW Puma Highway
Slide 26: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Rutherford NSW Puma Metropolitan $5.4 6.75% 15.5 100% 2,609 Sarina QLD Puma Regional $1.9 7.50% 15.5 100% 1,679 Slacks Creek QLD EG Australia Metropolitan $4.0 7.2
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by APN Funds Management Limited (ACN 080 647 479, AFSL No. 237500) (the "Responsible Entity") as the responsible entity and issuer of the financial products in respect of Convenience Retail REIT No. 1 (ARSN 101 227 614), Convenience Retail REIT No. 2 (A
Slide 28: Contact
Contact Chris Brockett Fund Manager, APN Convenience Retail REIT Ph: (03) 8656 1000 : cbrockett@apngroup.com.au ASX Code: AQR Follow us… @apngroup APN Property Group Limited APN Property Group Limited apnpropertygroup Level 30,101 Collins Street, apngroup.blog Melbourne, Vic 3000 apngroup.com.au ap
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