Rural Funds Group · ASX:RFF
Rural Funds — H1 FY2018 Earnings Presentation
26 slides from Rural Funds's earnings presentation, Feb 21, 2018
Slide 1: Financial results presentation, half year ended 31 December 2017
Managed by: For personal use only Financial results presentation Half year ended 31 December 2017 Managed by: 21 February 2018
Slide 2: Disclaimer
Managed by: Disclaimer For personal use only This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (RFM) as the responsible entity of Rural Funds Group (RFF). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (
Slide 3: Agenda
Managed by: Agenda For personal use only RFM attendees 1. Financial results David Bryant Managing Director 2. Capital management 3. Portfolio update Stuart Waight Chief Operating Officer 4. Acquisition strategy and outlook Daniel Yap 5. Appendices Financial Controller – Glossary and table of abbrevi
Slide 4: Financial results
1 For personal use only Managed by: Financial results Natal, northern Queensland, October 2017
Slide 5: Half yearly financial results FY18: income and earnings metrics
Managed by: Half yearly financial results FY18 For personal use only Income and earnings metrics • Property revenue 23% higher due to rent on 6mths ended 6mths ended 31 Dec 2017 31 Dec 2016 development capital expenditure, rent from new acquisitions and lease indexation Property revenue 24,141,000 1
Slide 6: Half yearly financial results FY18: balance sheet metrics
Managed by: Half yearly financial results FY18 For personal use only Balance sheet metrics As at As at • Increase in total assets predominantly due to 31 Dec 2017 30 Jun 2017 Natal acquisition, almond capital expenditure Total assets 641,118,000 543,003,000 and revaluations (see slide 7) Adjustment
Slide 7: Adjusted property assets movements
Managed by: Half yearly financial results FY18 Adjusted property assets movements ($m)1 For personal use only • Cattle acquisition includes Natal transaction ($63m) settled 8 Dec 2017 and Cattle JV breeder acquisitions ($3m) • Rewan valuation 17% higher than acquisition price plus deployed capital e
Slide 8: Capital management
2 For personal use only Managed by: Capital management New water storage on Natal, constructed as part of program to increase the number of stock water points. Natal, northern Queensland, January 2018
Slide 9: Debt facility
Managed by: Debt facility Debt metrics For personal use only 31 Dec 2017 30 Jun 2017 • Debt facility increased to $275m following (6 mths) (12 mths) Natal acquisition; a further $50m remains Term debt facility limit 1,2 275.0m 250.0m approved for future acquisitions Term debt drawn 253.5m 164.5m • D
Slide 10: Portfolio update
3 For personal use only Managed by: Portfolio update Almond trees, one year after planting at Kerarbury, Darlington Point, New South Wales, October 2017
Slide 11: Development and capital expenditure update
Managed by: Development and capital expenditure update For personal use only Lease term 1H18 2H18 FY19 FY20 Total Development update remaining & ($m) ($m) ($m) ($m) ($m) indexation 2,500 ha land and irrigation development complete. 300 ha of Kerarbury (almonds) 20.2 9.1 19.4 18.3 67.0 trees to be pl
Slide 12: Portfolio assets and lessees
Managed by: Portfolio assets and lessees1,2 For personal use only Notes: 1. Shaded areas denote climatic zones differentiated by rainfall seasonality. Source: Bureau of Meteorology. Climatic diversification reduces lessee concentration in any one climatic zone and introduces new commodities and coun
Slide 13: Portfolio diversification by FY18 revenue
Managed by: Portfolio diversification by FY18 revenue Lessees Lease indexation mechanisms1 For personal use only Climatic zone Sector type2 Notes: 1. CPI linked indexation refers to RFM Poultry which is 65% of CPI, capped at 2% 2. Sector type assumes poultry is infrastructure predominant, vineyards,
Slide 14: Acquisition strategy and outlook
4 For personal use only Managed by: Acquisition strategy and outlook Elevating scrappers working on the construction of the now complete 4,142 ML water storage at Lynora Downs, Emerald, Queensland, July 2017
Slide 15: Acquisition opportunities
Managed by: Acquisition opportunities For personal use only Spectrum of investment opportunities1 Note: 1. The income and growth figures presented in the figure above have been provided to differentiate the profile of income and growth that can be derived from different assets. They are based on RFM
Slide 16: Inflation and farmland values
Managed by: Inflation and farmland values For personal use only CPI, commodities and farm land values (1890 to 2016) – 10 yr rolling average % price change1,2 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 US CPI US Farm Land Aus CPI A
Slide 17: Outlook and conclusion
Managed by: Outlook and conclusion Farms by size and average age of farmers1 For personal use only • RFM’s focus is on the ongoing management of the existing portfolio and expansion through acquisitions with the aim of increasing: – earnings/distribution growth; – diversification; – liquidity; and –
Slide 18: Appendices
5 For personal use only Managed by: Appendices RFM management at Mooral almond orchard, Hillston, NSW, December 2016
Slide 19: Glossary and table of abbreviations
Managed by: Glossary and table of abbreviations TERM DEFINITION Adjusted NAV Net Asset Value (NAV) adjusted for the independent valuation of water entitlements Adjusted total assets Total assets adjusted for the independent valuation of water entitlements For personal use only ASX Australian Securit
Slide 20: HY18 results – comprehensive income
Managed by: HY18 results – comprehensive income For personal use only Summarised statement of comprehensive income 6 mths ended 6 mths ended • Property revenue has increased primarily as 31 Dec 2017 31 Dec 2016 a result of deployment of almond $ $ development capital expenditure, cattle and cotton a
Slide 21: HY18 results – AFFO
Managed by: HY18 results – AFFO For personal use only Composition of AFFO (pre-tax) 6 mths ended 6 mths ended • AFFO is pre-tax and excludes fair value 31 Dec 2017 31 Dec 2016 adjustments, depreciation and $ $ impairment to represent RFF’s property Property revenue 24,141,000 19,642,000 rental busin
Slide 22: HY18 results - reconciliation of net profit
Managed by: HY18 results - reconciliation of net profit For personal use only Reconciliation of net profit after tax to AFFO 6 mths ended 6 mths ended • Non cash items added back to reconcile 31 Dec 2017 31 Dec 2016 net profit after tax to AFFO $ $ • Major items for HY18: Net profit after income tax
Slide 23: HY18 results - summarised balance sheet
Managed by: HY18 results - summarised balance sheet For personal use only Summarised balance sheet • External borrowings $256.8m As at As at 31 Dec 2017 30 Jun 2017 • Gearing 37.4% $ $ Cash 2,553,000 3,838,000 • Accounting standards and ASIC guidance Property investments 624,262,000 527,398,000 requ
Slide 24: HY18 results - total assets reconciliation
Managed by: HY18 results - total assets reconciliation Total assets reconciliation For personal use only Adjustment Financial for water Investment Bearer Intangible Other Adjusted assets - Total entitlements property plants assets1,3 assets total assets property2,3 at fair values1,3 $ $ $ $ $ $ $ $
Slide 25: Rural Funds Management
Managed by: For personal use only Rural Funds Management Key information Board and management team contacts and tenure Established 1997 Total $743m Assets under Rural Funds Group: $687m Guy Paynter David Bryant Michael Carroll Julian Widdup management RFM Poultry: $9m Non-Executive Managing Non-Exec
Slide 26: Corporate information
Managed by: Corporate information For personal use only ACN 077 492 838 AFSL 226701 Canberra Office Level 2, 2 King Street Deakin ACT 2600 Telephone: +61 2 6203 9700 Facsimile: +61 2 6281 5077 managing good assets with good people Website: www.ruralfunds.com.au Further information: Media enquiries: