BWP Trust · ASX:BWP
BWP Trust — Bunnings Property Trust — H1 FY2004 Earnings Presentation
22 slides from BWP Trust's earnings presentation, February 2004
Slide 1: Interim Results 6 months to 31 Dec 03
Interim Results 6 months to 31 Dec 03 Investor Presentations - February 2004 www.bunningspropertytrust.com.au
Slide 2: Presentation format
Presentation format ¾ Presenters – Andrew Hopkins, Manager – Gene Tilbrook, Director ¾ Outline – Structure – Key events/results – The tenant – Portfolio – Acquisition/Development process – Capital management – Financial performance – Outlook February 2004 2 2
Slide 3: Structure
Structure ¾ Manager: Bunnings Property Management (BPML) – subsidiary of WES – independent board ¾ Bill Cairns (Chairman); AVR, ex GPT, FAL, WAN ¾ Robert McCuaig; Colliers, Multiplex, PAO ¾ Peter Mansell; Freehills, WAN, FAL, HPL, Zinifex ¾ Gene Tilbrook; WES, Gresham, ARG – independent property val
Slide 4: Events - highlights
Events - highlights ¾ Acquisitions/Developments – 1 development site acquired – 2 warehouses developed – 1 distribution centre developed ¾ 15% Market rent review uplift on 12 properties ¾ Revaluation of 6 properties up 25% on book value ¾ Successful $25.0m capital raising February 2004 4 4
Slide 5: Results - highlights
Results - highlights ¾ Interim distribution 5.51 cpu 7.0% on pcp ¾ Property assets $497m 29.8% on pcp ¾ NTA $1.18 per unit 5.4% on pcp ¾ Gearing 28% 35% on pcp ¾ Market capitalisation $439m 26.6% on pcp Note: all as at 31 Dec 2003 February 2004 5 5
Slide 6: Results – reconciliation against estimate
Results – reconciliation against estimate Estimate Actual Income $000 20,864 21,081 217 Expenses Management fee $000 1,415 1,425 10 Borrowing costs $000 4,308 4,237 (71) Other $000 470 480 10 Total $000 6,193 6,142 (51) Operating profit $000 14,671 14,939 268 Units eligible m 271 271 - DPU cpu 5.41
Slide 7: The Tenant – a strong performer with Warehouses
The Tenant – a strong performer with 122 Warehouses Sales from Warehouses drive Bunnings Revenue 3,500 400 3,000 350 SMI acquisition Operating Revenue ($m) 300 2,500 250 EBIT ($m) 2,000 200 BWP established 1,500 INTERIM 150 1,000 100 500 50 0 0 F95 F96 F97 F98 F99 F00 F01 F02 F03 H04 Revenue EBIT (p
Slide 8: The Tenant – recent activity and outlook
The Tenant – recent activity and outlook ¾ H2004 Trading – $2.0b revenue; ↑ 12% on pcp – Store on store cash sales ↑ 13%, trade sales ↓ 2% – $212m EBITA; ↑ 8% on pcp Series 3000 Warehouse – Ongoing Inventory management ¾ Network – 8 openings in H2004 Series 5000 Warehouse – Openings 8 to 12 pa (AUS
Slide 9: The Tenant – 100% occupancy; 11.3 yr ave. lease expiry
The Tenant – 100% occupancy; 11.3 yr ave. lease expiry 24 20 Number of leases 16 12 21 8 4 7 7 6 1 1 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Term to lease expiry (years) ¾ Typical lease features – 5 + 5 + 5 (plus 2 x 5 year options) – Annual CPI escalation – 5 year market reviews – Some ratchet clau
Slide 10: Acquisition/Development Process - greenfields
Acquisition/Development Process - greenfields ¾ Bunnings identifies site – Visible & accessible/usually industrial land – Typically 3 hectares/significant catchment area – Option to purchase ¾ Bunnings may offer to BPML – Full development proposal – BPML investment criteria applied – Not all propert
Slide 11: Acquisition/Development Process - other
Acquisition/Development Process - other ¾ Acquisition of developed properties – Ex Bunnings IPO properties, others – Ex BBC Hardware Ltd (18 acquired by WES via SMI) 4 purchased in Feb 03 Potential for more purchases by BWP – Ex third party vendors (approximately 65) One purchased (Fyshwick,
Slide 12: Portfolio – properties; geographic spread improving
Portfolio – 49 properties; geographic spread improving Jun 02 Jan 04 VIC 17 19 QLD 61 101 WA 9 9 NSW/ACT 3 9 ) 23 SA 2 2 TOTAL 37 49 ) 10 1 Includes distribution centres ) 17 )9 )4)2 ) 40 ) 8 .1 ) 122 Bunnings Warehouses ) 16 ) 32 . 3 )4 ) 43 BWP – owned stores )2 . 4 BWP development sites February
Slide 13: Portfolio – value now exceeds $500m
Portfolio – value now exceeds $500m $m 500 400 300 200 100 0 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 At cost Revaluations Note: does not include revaluations post Dec 03 February 2004 13 13
Slide 14: Portfolio – 3 yearly valuation cycle (minimum)
Portfolio – 3 yearly valuation cycle (minimum) Revaluations to Date Average BV No. reval. increment 2000/01 10 +13.7% +8.8% 2001/02 14 +16.1% +9.9% 2002/03 6 +11.3% +7.4% 2003/04 6 +24.9% ¾ Revaluation reserve now $37.6m (inc 3 revals post 31 Dec 03) ¾ Properties currently being revalued in VIC (4),
Slide 15: Portfolio - rent review task and process
Portfolio - rent review task and process ¾ Task – 20 properties in 2003/04 Vic (11), QLD (4), WA (3), NSW (1), ACT (1) – 7 properties in 2004/05 WA (2), QLD (2), SA (2), Vic (1) – Basis rent paid by lessee at other premises in same State rent paid by others in comparable premises in same Sta
Slide 16: Portfolio – rent review status
Portfolio – rent review status ¾ 20 notices issued for 2003/04 – QLD (3) – negotiated outcome – VIC (4), WA (3); determined Dec 03 – ACT (1), NSW (1); determined Feb 04 – Balance VIC (7), QLD (1) negotiate/determine February 2004 16 16
Slide 17: Portfolio – 15% uplift from rent reviews to date
Portfolio – 15% uplift from rent reviews to date Passing Rent ($ pa) Market Review ($ pa) Uplift Effective Date QLD Burleigh Heads 1,016,650 1,113,000 +9.5% 22 Oct 03 Southport 1,008,869 1,103,000 +9.3% 10 Nov 03 Underwood 952,532 1,023,000 +7.4% 22 Oct 03 +8.8% VIC Altona 722,005 866,000 +19.9% 24
Slide 18: Capital Management - overview
Capital Management - overview ¾ $156m equity raised post IPO – $25.0m underwritten UPP (Nov 03) – $33.7m placement (Nov 02) – $29.5m one for eight rights issue (Oct 01) – $23.9m placement (Sept 01) – $44.0m one for three rights issue (Jan 00) ¾ Borrowings – Preferred range of 20% to 40% (debt to tot
Slide 19: Capital Management – gearing on target
Capital Management – gearing on target 50% 40% Preferred range 30% 20% 10% 0% Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 February 2004 19 19
Slide 20: Capital Management – debt actively managed
Capital Management – debt actively managed BWP Hedge Book Overview Jun Jun Jun Jun Dec Jun Dec 1999 2000 2001 2002 2002 2003 2003 % Debt hedged1 87 86 77 90 100 86 98 Swap Rates (%) - Maximum 5.87 6.62 6.64 6.64 6.62 6.62 6.62 - Minimum 5.56 5.56 5.46 5.46 5.41 5.08 4.97 1 Interest bearing debt ¾ 31
Slide 21: Financial Performance – consistent DPU growth
Financial Performance – consistent DPU growth CPU End of concessional 6.00 management fee 5.51 5.35 5.15 4.97 5.00 4.68 4.80 4.50 4.00 3.00 2.00 1.00 0.00 De c-98 Jun-99 De c-99 Jun-00 De c-00 Jun-01 De c-01 Jun-02 De c-02 Jun-03 De c-03 February 2004 21 21
Slide 22: Outlook
Outlook ¾ Acquisition opportunities - ex BBS rollout (8 to 12 pa) - ex BBC properties - ex third party owners - New Zealand rollout (target 25) - 3000 Series rollout 4 pa (target) ¾ Rent reviews - 8 more results due in 2003/04 - 7 properties in 2004/05 ¾ Revaluations – each property at least every 3
Bunnings Property Trust — H1 FY2004 Earnings Presentation on 6ix