Argosy Property Limited · NZX:ARG
Argosy Property — Argosy Property Trust — Non-Deal Roadshow (February 2012)
28 slides from Argosy Property's roadshow presentation, February 2012
Slide 1: Argosy Property Trust Investor Presentation Roadshow 2012
WWW.ARGOSYPROPERTYTRUST.CO.NZ ARGOSY PROPERTY TRUST INVESTOR PRESENTATION ROADSHOW 2012
Slide 2: Significant change since our last roadshow?
SIGNIFICANT CHANGE SINCE OUR LAST ROADSHOW? Last time the Manager of the Trust was owned by ANZ and the Trust paid them a management fee – now Unit Holders control the management company and immediate cost savings are being achieved. Net property income has been maintained in the first six months of
Slide 3: Introducing….
INTRODUCING…. Dave Fraser is our new Chief Financial Officer, and he is supported by our Financial Controller, Scott Lunny. Last time we visited, Stuart Harrison was our CFO who also looked after Vital Healthcare. Stuart now works full time for Vital. David Snelling has been appointed as Company Sec
Slide 4: Trust Basics
» Property Trust TRUST BASICS
Slide 5: Summary Statistics
SUMMARY STATISTICS As at 30 September 2011 Book value of properties $931.8m Number of properties 72 Average value of properties $12.94m Vacancy by rental 5.37% Vacancy by area 6.12% Weighted average lease term 4.84 years Number of tenants 250
Slide 6: Performance
Argosy PERFORMANCE Argosy Property Trust - 6 months to 30 September 2011 120 115 110 105 100 Gross Prices Indexed to 100 95 90 = = = . ~ ~ ~ 5 3 5 5 nl z Z z & 3 3 2 g 5 3 2 & — Argosy Property Trust ———NZ Property Gross Index NZX 50 Index
Slide 7: Argosy Property Trust - months to December 2011
Argosy Property Trust - 12 months to 31 December 2011 120 116 112 Gross Prices Indexed to 100 108 104 100 96 92 Oct-11 Dec-10 Mar-11 Nov-11 Dec-11 Jun-11 Jan-11 Feb-11 Apr-11 May-11 Jul-11 Aug-11 Sep-11 Argosy Property Trust NZ Property Gross Index
Slide 8: The winners and losers in a tough year
“THE WINNERS AND LOSERS IN A TOUGH YEAR” …….The retail sector performed particularly poorly, while the listed property entities performed particularly well. All six property entities in the NZX-50 Gross Index had positive returns, with Argosy Property the best on 8.2% and…. NZ Herald – Brian Gaynor
Slide 9: Financial Overview
» Property Trust FINANCIAL OVERVIEW
Slide 10: Financial Performance
FINANCIAL PERFORMANCE HY12 HY11 Change Net income $35.6m $35.6m - Finance income $0.1m $0.4m ($0.3m) Interest expense ($15.9m) ($13.4m) ($2.5m) Loss on derivatives ($11.4m) ($9.7m) ($1.7m) Other expenses ($4.1m) ($3.5m) ($0.6m) Profit before income tax from normal operating activities $4.3m $9.4m ($
Slide 11: Distributable Income
DISTRIBUTABLE INCOME HY12 HY11 (Loss)/profit before income tax ($23.8m) $8.7m Add back/(deduct): Investment disposal gains ($0.1m) - Loss on derivatives $11.4m $9.7m Amortisation of management contract $6.0m $ 0.6m Management rights buyout $20.0m - Management rights buyout – associated costs $1.6m -
Slide 12: Financial Position
FINANCIAL POSITION September 2011 March 2011 Change Securities on issue 554.5m 549.2m (5.3m) Unitholders’ funds $478.7m $511.7m ($33m) Net asset backing per unit (cents) 86.3c 93.2c (6.9c) Investment properties $924.9m $948.7m ($23.8m) Properties held for sale $6.9m $11.9m ($5.0m) Total assets $948.
Slide 13: Interest Rate Management
INTEREST RATE MANAGEMENT The Trust current interest rate hedge is 90% of debt Margin and line fee savings of 30bps under new facility from 31 August (approx $1.2m). Five blend and extend transactions saving $1.15 million per annum from prior rates. 130 million in new swaps from December roll at betw
Slide 14: Bank Covenants
BANK COVENANTS HY12 FY11 Loan to valuation ratio Fair market value of properties (incl. held for sale) $ 931.8m $ 960.6m Total borrowings $ 413.5m $ 412.4m Not to exceed 50% 44.4% 42.9% Interest cover ratio - equal or exceed 1.80 times 2.01x 2.15 x (March 2011: 2.00 times) Weighted Average Lease Ter
Slide 15: Net Tangible Assets
NET TANGIBLE ASSETS 95.0 -2.8 92.1 -0.1 -1.9 90.0 -0.8 -0.2 86.3 85.0 80.0 75.0 70.0 65.0 60.0 NTA at 31 March 2011 excludes opening management fee buyout intangible.
Slide 16: Portfolio Overview
» Property Trust PORTFOLIO OVERVIEW
Slide 17: Diversification by Sector and Location
DIVERSIFICATION BY SECTOR AND LOCATION 10% 28% 38% 15% Office Auckland Industrial Wellington Retail Regional 75% 34%
Slide 18: Lease Maturity (30 Sept)
LEASE MATURITY (30 SEPT) 16% 15% 40 14% 13% 15 Percentage of portfolio (by income) 26 12% 11% 10% 12 9% 22 8% 13 14.9% 34 7% 55 37 6% 12.4% 6 11.9% 9.0% 5% 8 4% 8.7% 6.9% 7.0% 7.5% 4.2% 3% 6.7% 5.4% 2% 1% 0% Vacant Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 The numb
Slide 19: Commercial/Office
COMMERCIAL/OFFICE • Reduction in proposed new supply in Auckland • Net absorption is positive but remains weak • Activity is typically “shifting the deck chairs” • Fringe demand remains relatively soft • Tenants remain conservative • Beginning to see increase in demand for increased areas • Demand i
Slide 20: Retail
RETAIL Enquiry levels improved Tenant rental expectations soft Tenant quality focus Block E Albany Lifestyle Centre leases have been restructured Waitakere MegaCentre now fully let and performing well Albany MegaCentre demand exceeds supply Investor demand has improved Turnover levels remain challen
Slide 21: Industrial
INDUSTRIAL Solid net absorption in Auckland market Owner occupier activity increasing Investor demand for well leased property is strong Manufacturing enquiry remains light New supply proposals in the market Has shown some growth but this appears to have flattened.
Slide 22: Valuations
VALUATIONS No evidence of significant movement in values Following assessment of markets and property details no interim valuations were commissioned Revaluations will be completed by 31 March 2012 for year-end results as normal Capitalisation rate and rate of return largely flat Management consider
Slide 23: Strategy
STRATEGY Risk mitigation Debt reduction (medium term target of under 40% debt to total assets ratio) Portfolio positioning for the future 38 lease transactions 14 lease renewals and extensions 24 new leases Sales of vacant property Sale of higher risk property New 6-year leases for both
Slide 24: Issues for Focus
ISSUES FOR FOCUS Occupancy remains a key focus as values are fundamentally affected by weighted average lease term and projected incentive levels Rental reviews – ensuring that the Trust is well positioned to gain rental increases when these become available. Stock selection - increased focus on new
Slide 25: Internalisation – Progress Update
INTERNALISATION – PROGRESS UPDATE Transaction completed on 30 August 15 staff transferred on 31 August. Three new staff hired since including CFO and Company Secretary Moved to 39 Market Place in December (Trust building) IT systems outsourced Significant savings achieved through internalisation
Slide 26: Manawatu Business Park
MANAWATU BUSINESS PARK Asset remains sound Joint venture partner has been removed in swap of debt and obligations for equity $25.7m under either contract for sale or option($9.9m settles 2012 with the remainder progressively over three years) Subdivision works complete – titles expected before mid y
Slide 27: Thank You
» Property Trust THANK YOU
Slide 28: Disclaimer
DISCLAIMER This presentation has been prepared by Argosy Property Management Limited on behalf of Argosy Property Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain inde
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