Aspen Group Limited · ASX:APZ
Aspen — Investor Presentation (May 2009)
30 slides from Aspen's investor presentation, May 19, 2009
Slide 1: Aspen Group $82.4M Equity Raising
For personal use only Aspen Group $82.4M Equity Raising Via Fully Underwritten Accelerated Pro Rata Entitlement Offer May 2009 “Creating wealth through intelligent property investment” Entitlement Offer, May 2009 1
Slide 2: Important Notices
Important Notices For personal use only This Presentation has been prepared by Aspen Group Limited and Aspen Funds Management Limited as responsible entity for the Aspen Property Trust (together, Aspen Group) in connection with a non- renounceable entitlement offer (Offer) of stapled securities in A
Slide 3: Contents
Contents For personal use only 1. Offer Overview 2. Impact of the Offer 3. Investment Rationale 4. Aspen Group Overview 5. Key Investment Risks Entitlement Offer, May 2009 3
Slide 4: Offer Overview: Key Details
Offer Overview Key Details For personal use only Aspen to raise $82.4 million of new equity as part of its capital management strategy to: ¾ Reduce bank borrowing and create additional headroom ¾ Strengthen balance sheet and reduce gearing ¾ Improve working capital flexibility and reduce risk ¾ Enha
Slide 5: Offer Overview: Key Details cont.
Offer Overview Key Details cont.. For personal use only ¾ The Offer is via an accelerated non-renounceable pro rata 1 for 1.1 entitlement offer Accelerated institution component to raise at least $40.0 million Retail entitlement offer to raise no more than $42.4 million Fully underwritten by E
Slide 6: Offer Overview: Key Benefits
Offer Overview Key Benefits For personal use only The capital raising strengthens Aspen’s balance sheet while creating the flexibility to pursue growth opportunities expected to arise out of the current market conditions Specific key benefits include: ¾ Enhanced bank facility terms agreed; loan to v
Slide 7: Offer Overview: Value Proposition
Offer Overview Value Proposition For personal use only Discount to 5-Day VWAP Discount to Pro-forma NTA $0.45 $0.80 $0.74 $0.40 $0.382 $0.70 21% 60% $0.35 $0.60 $0.300 $0.30 $0.50 $0.25 $0.40 $0.20 $0.30 $0.30 $0.15 $0.20 $0.10 $0.05 $0.10 $0.00 $0.00 5 day VWAP Offer Price Pro forma NTA Offer Price
Slide 8: Offer Overview: Indicative Timetable
Offer Overview Indicative Timetable For personal use only ASX announcement Tuesday, 19 May Institutional Offer and Institutional Bookbuild opens Institutional Offer and Institutional Bookbuild closes (12PM WST) Wednesday, 20 May Trading recommences Thursday, 21 May Record Date (5PM WST) Friday 22 Ma
Slide 9: Contents
Contents For personal use only 1. Offer Overview 2. Impact of the Offer 3. Investment Rationale 4. Aspen Group Overview 5. Key Investment Risks Entitlement Offer, May 2009 9
Slide 10: Impact of the Offer: Change in Issued Capital
Impact of the Offer Change in Issued Capital For personal use only No. Securities ('000) % Total No. Securities on issue 302,221 52.4% No. Securities issued pursuant this Entitlement Offer 274,746 47.6% No. Securities post-Offer 576,967 100.0% Entitlement Offer, May 2009 10
Slide 11: Attractive pro-forma earnings & distributions yield
Impact of the Offer Attractive pro-forma earnings & distributions yield For personal use only FY10 Guidance Range High Low EPS post-Offer (annualised)* (cents/Security) 7.58 6.77 EPS Yield on Offer price 25.3% 22.6% Post-Offer DPS Guidance (70% payout) (cents/Security) 5.31 4.74 Distribution yield o
Slide 12: Significant debt reduction and improved interest coverage
Impact of the Offer Significant debt reduction and improved interest coverage For personal use only Debt Profile Pre Offer Post Offer Debt as at 31 March 2009 $ 253.4 m $181.2 m LVR (% bank security pool1) 66.9% 47.6% LVR Covenant Note 2 65% Gearing3 38.7% 27.1% Interest Cover on total earnings 3.1
Slide 13: Strong pro forma financial position
Impact of the Offer Strong pro forma financial position For personal use only ($m) Pre Offer1 Post Offer +/- Change Gross Assets 647.0 654.2 7.2 Less Liabilities: Bank debt 253.4 181.2 - 72.2 Other Liabilities 37.2 37.2 - Net Assets 356.4 435.8 79.4 Net Tangible Assets 349.8 429.2 79.4 NTA ($/Securi
Slide 14: Contents
Contents For personal use only 1. Offer Overview 2. Impact of the Offer 3. Investment Rationale 4. Aspen Group Overview 5. Key Investment Risks Entitlement Offer, May 2009 14
Slide 15: Strong potential for value upside
Investment Rationale Strong potential for value upside For personal use only Potential for significant security value increase as oversold listed property market recovers ¾ 60% discount on NTA at Offer price of $0.30 ¾ Discount to NTA implies nominal value attributed to funds management fee stream (
Slide 16: Recent Asset Valuations Reduce Revaluation Risk
Investment Rationale Recent Asset Valuations Reduce Revaluation Risk For personal use only Reduced valuation downside risk through: All direct property assets independently revalued at 31 December 2008 Current valuations reflect market softening Conservative market rental and growth assumption
Slide 17: Summary - Robust and Disciplined Business Model
Investment Rationale Summary - Robust and Disciplined Business Model For personal use only Aspen has responded strongly to the challenges presented by the difficult and uncertain operating environment facing the Australian property sector ¾ Strong Management Management team with strong track recor
Slide 18: Contents
Contents For personal use only 1. Offer Overview 2. Impact of the Offer 3. Investment Rationale 4. Aspen Group Overview 5. Key Investment Risks Entitlement Offer, May 2009 18
Slide 19: Location of Properties owned by Aspen & its Funds
Aspen Group Overview For personal use only Location of Properties owned by Aspen & its Funds Aspen is a major Australian property owner and funds manager: ¾ Aspen owns a diversified portfolio of commercial properties ▲ ¾ Aspen manages funds of property investments in specific asset classes for ▲ ext
Slide 20: Stable Direct Property & Management Fee Income Streams
Aspen Group Overview Stable Direct Property & Management Fee Income Streams For personal use only Assets Owned Assets Managed Property Funds Co- Portfolio Management Investments • 11 commercial properties • 7 Divisions (assets of $970M) • 8 investments ($63M) Description ($375M*) • Manages property
Slide 21: Aspen's Revenue is largely recurring
Aspen Group Overview Aspen’s Revenue is largely recurring… For personal use only Revenue and Other Income - by source 40 35 30 25 $ million 20 15 10 5 0 Rental income from Management Fees Management Fees Financial & other income TOTAL REVENUE investment properties - Recurring - Establishment Fees &
Slide 22: Strong Tenants, Medium Term Lease Maturities
Aspen Group Overview Strong Tenants, Medium Term Lease Maturities For personal use only Highlights ¾ Government and blue chip companies account for 75% of the portfolio’s income Income by Type of Tenant ¾ Growth in rental income locked in for FY09 and FY10 (completion of Karratha Village in Dec-08)
Slide 23: Lease Expiry Profile
Aspen Group Overview Lease Expiry Profile For personal use only Lease Expiry Profile by Financial Year Key Tenant Expiry 35% Financial % of % Rental Tenant Year Income Income 30% Centrelink 2011 7% Elders* 2012 13% 25% Minister for Works 2014 3% Woodside** 2014 21% 20% Alcoa 2014 3% DIMIA 2015 6% 15
Slide 24: Funds Management Division
Aspen Group Overview Funds Management Division For personal use only ¾ Leverages Aspen’s core asset management expertise ¾ Gross assets under management $970M ¾ Growing and maturing fee income base across multiple sectors and asset types ¾ In-house skill sets across all property sectors Aspen Aspen
Slide 25: Contents
Contents For personal use only 1. Offer Overview 2. Impact of the Offer 3. Investment Rationale 4. Aspen Group Overview 5. Key Investment Risks Entitlement Offer, May 2009 25
Slide 26: Investment Considerations and Risks
Key Investment Risks For personal use only Investment Considerations and Risks Business activities undertaken by Aspen are subject to a number of risks and other factors which may impact its future performance. Some of these risks can be mitigated by the use of safeguards and appropriate controls, h
Slide 27: Risks Specific to Investing in Aspen (continued)
Key Investment Risks For personal use only Risks Specific to Investing in Aspen (continued) Physical Works In the event that any property requires structural repairs or major works which are not of a capital nature, additional charges may have to be made against the rental income from the respective
Slide 28: Risks Specific to Investing in Aspen (continued)
Key Investment Risks For personal use only Risks Specific to Investing in Aspen (continued) Contractual Risk Aspen has provided debt funding to the Aspen Diversified Property Fund, the Aspen Parks Property Fund, Aspen Communities Property Fund, Aspen Villages Property Fund, other associated entities
Slide 29: Risks Specific to Investing in Aspen (continued)
Key Investment Risks For personal use only Risks Specific to Investing in Aspen (continued) Distributions Securityholders in Aspen are entitled to participate in distributions of Aspen from time to time but the amount of future distributions or whether a distribution will be made in any given quarte
Slide 30: Risks Specific to Investing in the Stock Market Generally
Key Investment Risks For personal use only Risks Specific to Investing in the Stock Market Generally Market Conditions A number of factors outside Aspen’s control may significantly impact on the Group, its performance and the price of its Stapled Securities. These factors include economic conditions