Dexus Convenience Retail REIT · ASX:DXC
Dexus Convenience Retail REIT — APN Property Group — HY2020 Earnings Presentation
29 slides from Dexus Convenience Retail REIT's earnings presentation, Feb 20, 2020
Slide 1: HY2020 Results Presentation
HY2020 RESULTS PRESENTATION 20 FEBRUARY 2020 www.apngroup.com.au ASX Code: APD
Slide 2: APN Property Group Overview
APN Property Group Overview Specialist real estate investment manager – ‘Property for income’ focus As at 31 December 2019 APN PROPERTY GROUP FUNDS UNDER MANAGEMENT CO-INVESTMENTS & CASH $3,067 MILLION $138 MILLION NET TANGIBLE ASSETS APN CONVENIENCE REAL ESTATE APN INDUSTRIA REIT RETAIL REIT DIRECT
Slide 3: HY2020 financial highlights
HY2020 financial highlights With strong continuing growth FUM now exceeds $3 billion $6.4 million ▲33% pcp, 2.03 cents per security (cps) OPERATING EARNINGS1 98% operating income from recurring sources Statutory NPAT: $17.4 million (5.61 cps) FUM $3.1 billion ▲$138 million 4.7% on June 20192 Forecas
Slide 4: Continuing FUM, profit and distribution growth
Continuing FUM, profit and distribution growth Recurring Income Growth Total Securityholder Return $4,000 $3,403 $3,000
Slide 5: Strong operating earnings growth
Strong operating earnings growth Reflects additional assets acquired by APN Industria Income Statement ($000s) HY2020 HY2019 Change REIT part way through period and higher average FUM Funds management fees 7,963 7,616 ▲ 5% for the period in the real estate securities division Performance & transacti
Slide 6: Well capitalised for continuing growth
Well capitalised for continuing growth Balance Sheet ($000s) Dec 2019 Jun 2019 Change Comprises: ▪ $83.6 million in ADI at $2.91 per security (NTA at $2.83, Cash1 15,576 15,672 ▼ 1% weighted average cap rate of 6.4%) ▪ $33.6 million in AQR at $3.49 per security (NTA at Co-investments 129,310 127,472
Slide 7: Real Estate Securities
Real Estate Securities ‘Property for income’ investment products continue to be attractive in a low interest rate environment ▪ Continued strong income focused returns as a result of our active Division FUM growth management approach $1,668m $1,684m $1,673m ▪ Benchmark unaware, lower risk, income fo
Slide 8: APN Asian REIT Fund
APN Asian REIT Fund Gaining momentum and increasing scale supported by strong fundamentals ▪ Asian REIT Fund $58 million of FUM at 31 Dec 2019, up 30% ▪ Delivers APN’s Property for Income investment process into growing Asian commercial property markets – Singapore, Hong Kong, Tokyo ▪ Substantial, m
Slide 9: APN Industria REIT (ASX: ADI)
APN Industria REIT (ASX: ADI) Strong and active period for the portfolio, focused on providing long term sustainable income ▪ Attractively positioned office and industrial portfolio delivering strong and growing distributions ▪ HY2020 earnings (FFO) increased 8.5% to 10.2 cents per security ▪ Low ge
Slide 10: ADI – allocating capital to income and value generating opportunities
ADI – allocating capital to income and value generating opportunities Over $120m of acquisitions at average cap rate of 6.7% | ~24,000 square metres leased | Improved occupancy from 95% to 98% $3.60 13 Ricky Way and 1 Westpark Drive, Knoxfield and Kilsyth 60 Grindle Road, 10 Brandl St, 350-356 Coope
Slide 11: APN Convenience Retail REIT (ASX: AQR)
APN Convenience Retail REIT (ASX: AQR) Long lease term, non-discretionary retail focus delivering reliable and growing income ▪ HY2020 earnings (FFO) of $9.0m (10.8 cps) – up 6.8% (0.5%) ▪ NTA per security increased by 17 cps to $3.13, up 5.7% ▪ $78.7 million of acquisitions announced taking total p
Slide 12: AQR – secure and growing income streams
AQR – secure and growing income streams Over $100 million of acquisitions announced 7-Eleven Coles Ayr ($4.7) 13 service station Puma Moree Puma Mount Larcom Maroochydore Sale of three Puma sites portfolio ($10.4m) ($7.3m) ($6.9m) ($9.8m) ($74.6m) $4.25 $4.02 $3.75 $3.25 $3.13 Chevron announced $2.7
Slide 13: Direct Property
Direct Property ▪ All six residential projects completed within the APN Steller Fund FUM ($ million) Development Fund, providing a successful outcome for investors having returned $1.35 per unit and delivered an IRR of 17.7% APN Regional Property Fund $55 ▪ Excellent leasing progress on APN Regional
Slide 14: Direct property platform with scale and multiple capabilities
Direct property platform with scale and multiple capabilities Attractive underlying property sectors Portfolio summary metrics Size $1.4 billion Weighted Average Cap Rate 6.6% $419m $459m Weighted Average Lease Expiry 7.4 years Office Industrial Occupancy 98% $389m $46m Convenience Other Retail Reta
Slide 15: Direct Property – active but disciplined in HY2020
Direct Property – active but disciplined in HY2020 72 properties reviewed $1.8 billion $975 million $147 million and conducted value of property value of offers transactions preliminary due opportunities assessed submitted executed diligence 15
Slide 16: Stapling transactions completed
Stapling transactions completed ▪ APN announced on 16 December 2019 that it had completed the stapling of shares in APD to units in APD trust ▪ Implementation of the stapling included a non-cash capital Listed Stapled Security Process return (6.3 cps) and fully franked special dividend (1.2 cps) APN
Slide 17: Outlook – APN remains well positioned for future growth
Outlook – APN remains well positioned for future growth Quality income streams from commercial real estate continue to be attractive to investors ✓ Established commercial real estate investment management platform – significant barriers to entry and difficult to replicate ✓ Fully independent ✓ Indep
Slide 18: FY2020 distribution guidance reaffirmed
FY2020 distribution guidance reaffirmed Subject to continuation of current market conditions Original Guidance Reaffirmed Guidance Full Year FY2020 Interim FY2020 (Actual) Final FY2020 (Guidance) Full Year FY2020 3.15 cps 1.60 cps 1.55 cps 3.15 cps Dividend Distribution 1.13 cps 0.47 cps (fully fran
Slide 19: Implied Funds Management platform valuation
Implied Funds Management platform valuation1 Market implied value of funds management platform of $60.6m 70 based on $3.1bn FUM = 1.98% 60 Total co-investments of $129.3m 19.1 50 A$ cents per security 40 4.9 3.8 (0.2) 62.5 30 10.6 20 24.4 10 0 2 ADI AQR Other co-investments Other NTA adjustments Cas
Slide 20: Exceptionally strong start in CY2020
Exceptionally strong start in CY2020 ▪ Strong start across APN’s business in CY2020 ▪ Adjusting FUM for post balance date movements in securities funds and contracted property completions, over $100 million in growth over December 2019 ▪ Significant increases in APN’s two largest co-investments (AQR
Slide 21: Appendices
APPENDICES DAR NG ANN ha We pet tal APN | Property Group
Slide 22: Overview
Overview Summary Security Price and Volume ▪ Listed on ASX (Code: APD) $0.65 Volume (RHS) Price (LHS) 20.0k Volume (daily shares traded) ▪ Melbourne-based specialist real estate investment manager $0.60 $0.55 15.0k ▪ Established 1996, listed 2005 Security price $0.50 ▪ $3.1 billion in Funds under Ma
Slide 23: Funds Under Management Summary
Funds Under Management Summary Fee Basis APN Co-investment FUM Funds Sector Investors Manage- Perfor- $m Other $m % ment mance APN AREIT Fund Property Securities Retail & Institutional 1,247 ✓ − − APN AREIT Mandates Property Securities Institutional 200 ✓ − − APN AREIT PIE Fund Property Securities R
Slide 24: Profit to operating cash flow reconciliation
Profit to operating cash flow reconciliation $’000s 20,000 18,000 17,404 16,000 Cashflow Reconciliation ($’000s) Dec 2019 Dec 2018 14,000 Statutory profit after tax 17,404 6,010 (4,074) 12,000 (489) Add/(deduct): 10,000 Mark to market revaluations (4,074) (2,016) 8,000 Non-cash expense items (489) 5
Slide 25: Operating Profit After Tax Reconciliation
Operating Profit After Tax Reconciliation $‘000s 7,000 749 6,418 6,000 732 432 (637) 347 (99) 60 9 5,000 4,825 4,000 3,000 2,000 1,000 - Operating earnings Increase in funds Decrease in Increase in Increase in Increase in co- Decrease in rent Decrease in Decrease in tax Operating earnings after tax
Slide 26: Debt facility summary
Debt facility summary Facility Limit1 $9.0 million Drawn at 31 December 2019 $6.0 million Loan to Value Ratio (LVR) 8.2% LVR Covenant < 35.0% Distribution Cover Ratio (DCR) 12.6x DCR Covenant > 2.0x Cost of debt 5.0% pa Expiry1 September 2021 Security Mortgage over specified assets 1. Facility limit
Slide 27: Important notice
Important notice Disclaimer This investor presentation (Presentation) has been prepared by APN Property Group (ASX:APD) comprising APN Property Group Limited (ACN 109 846 068) and APN RE Limited (ACN 627 612 202, AFSL No. 510685 ) as responsible entity for APD Trust (ARSN 629 330 007), (APN). This P
Slide 28: Important notice
Important notice Third party ratings The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036 for the APN AREIT Fund as at September 2019 and APN Asian REIT Fund as at June 2019. SQM Research is an investment research firm that undertakes research on investment prod
Slide 29: Contact details
Contact details Tim Slattery Joseph De Rango Chief Executive Officer Chief Financial Officer +613 8656 1000 +613 8656 1000 +61400 444 864 tim.slattery@apngroup.com.au jderango@apngroup.com.au Follow us… @apngroup APN Property Group Limited APN Property Group apnpropertygroup Level 30,101 Collins