€ 20,000,000 6.2% Bonds 2017 – 2020 with an option to increase up to € 25million
The Tumas Group – Privately owned Group tracing its origins to the 60s. The Group was founded by the late Tumas Fenech as a real estate business – Within four decades, the Group revolutionised the property business in Malta, enabling a life style that fuses accommodation, hospitality, entertainment and leisure – In the early 80 ’ s, the Group moved into the hospitality sector and also introduced timeshare to the Island. The Group owns 3 hotels in Malta and a 5 star hotel in France, on the banks of lake Gen è ve. – In the last 10-15 years the Group further diversified itself, yet retained its core competencies, and has grown into other segments mainly gaming and port operations 3 Presentation to financial intermediaries – 31 May 2010
The Tumas Group – Key numbers Employment – Circa 1,300 direct full time equivalents Turnover and results – Group turnover € 92million (audited) in 2008 – Profit before tax € 4.1millon (audited) in 2008 4 Presentation to financial intermediaries – 31 May 2010
The Tumas Group today Some 40 companies form the Tumas Group, operating both locally and overseas Tumas Group Property development, Retailing and Port Hospitality & Leisure Management Services management and leasing operations - Hilton Malta - Corporate back office - Easysell KIA - Portomaso complex - Dolmen Resort - Timeshare - Valletta Gateway Terminal - Hilton Evian - In house finance - Eurojet - Tas Sellum residences - Oracle Casino companies - Ta ’ Monita estates - Portomaso Casino - Office space development - Condominium management - Halland Developments - Hotel Leasing - Various property holdings 5 Presentation to financial intermediaries – 31 May 2010
Tumas Group bond issues and private placements Tumas Investments plc issued a (Lm7 million) € 16.3million public 2002: guaranteed bond maturing in 2010-2012 In October, the (Lm4.2 million) € 9.7million private placement was 2002: listed on the MSE and since fully repaid Dolmen Properties plc issued a (Lm4.7 million) € 10.9million public 2003: secured bond maturing 2010-2013 2004: Spinola Development Company Limited issued a (Lm5.5 million) € 12.8million Floating Rate Note privately placed with financial institutions Tumas Investments plc issued a € 25million public unsecured bond 2009: maturing in 2014-2016 6 Presentation to financial intermediaries – 31 May 2010
The Issuer and Guarantor Issuer Spinola Development Co. Ltd. Guarantor 7 Presentation to financial intermediaries – 31 May 2010
Organisational structure related to the Bond issue 8 Presentation to financial intermediaries – 31 May 2010
Tumas Investments plc – The issuer – Incorporated in 1999 as an SPV – Sole aim to raise financing from the general public and financial institutions for the SDC sub-group – This is the third public security issued by the company in 10 years – All its financial instruments and related finance costs are secured or guaranteed by Spinola Development Company Limited 9 Presentation to financial intermediaries – 31 May 2010
Spinola Development Company Limited – The Guarantor Incorporated in 1966 to develop the Hilton Malta International – – Purchased by Tumas Group in 1986 – In 1996 it commenced the development of the Portomaso project in St. Julians – Today the company: • employs circa 500 full time equivalents, in addition to subcontractors and indirectly employed staff • has substantially completed and delivered most of its up market residential properties • synonymous with a mature development providing a life style that combines real estate with hospitality and leisure 10 Presentation to financial intermediaries – 31 May 2010
Organisational structure 11 Presentation to financial intermediaries – 31 May 2010
The Portomaso Development elements Marina Hilton Malta & Conference Centre Apartments Blocks 10 to 29 Office & Commercial Areas Apartments Club Blocks 31/A 22 Cark park 12 Presentation to financial intermediaries – 31 May 2010
Key Financials – Guarantor ’ s reported performance 2009 2008 2007 2006 € '000 € '000 € '000 € '000 Actual Actual Actual Actual Revenue 33,208 35,287 33,242 38,079 Development and operational costs (22,866) (24,934) (23,514) (25,671) Profit before interest, tax and deprecation 10,342 10,353 9,728 12,408 Analyised between: Sale of apartments & office space 2,241 2,751 3,678 6,886 Ongoing operations 8,101 7,602 6,050 5,522 Net finance costs (3,128) (2,918) (2,524) (2,931) Cash profits 7,214 7,435 7,204 9,477 Interest cover 3.31 3.55 3.85 4.23 13 Presentation to financial intermediaries – 31 May 2010
Hilton Malta benchmarked against other 5 star hotels Source: Deloitte MHRA survey 2009, Hilton Malta GOP per available room GOP% Overheads PAR Payroll PAR revPOR revPAR AARR Occupancy - 50 100 150 200 Hilton 2009 Hilton 2008 Five star average = 100 14 Presentation to financial intermediaries – 31 May 2010
Hilton Hotel and Ancillary Operations - EBITDA 30,000 7,000 6,000 25,000 5,000 20,000 4,000 15,000 3,000 10,000 2,000 5,000 1,000 - 0 2003 2004 2005 2006 2007 2008 2009 Revenue Hotel & ancillary operations 15 Presentation to financial intermediaries – 31 May 2010
Hotel key success factors in 2009 – Leading the market in rate and occupancy – Maintaining number 1 position in fair market share – Flexibility to diversify from traditional markets – Increased productivity while maintaining standards – High revenue conversion rate 16 Presentation to financial intermediaries – 31 May 2010
The Portomaso residential apartments Expected future sales of € 43 million, of which Sold 359 € 22.4million are under a promise of sale Promise of Sale 67 agreement (67 units) Held for sale 31 Total apartments 457 17 Presentation to financial intermediaries – 31 May 2010
The Business Tower offices – A prestigious business address – Rentable space fully committed and still enjoying continued demand – Many tenants linked to financial services, an industry set to continue to grow 18 Presentation to financial intermediaries – 31 May 2010
Portomaso commercial elements – A mature, fully rented mix of facilities – Well established anchor tenants – Arkadia, casino, 22, Marina Restaurants, Pavillion – All marina berths occupied – Car park usage growing consistently This project is a hive of activity 19 Presentation to financial intermediaries – 31 May 2010
Sources of cash earnings Apartment sales assuming less importance as stock is exhausted and operating businesses continue to mature 8,000 6,000 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Outright sale of property Long term commercial elements 20 Presentation to financial intermediaries – 31 May 2010
Key Financials – Guarantor ’ s reported financial position 2009 2008 2007 2006 € '000 € '000 € '000 € '000 Actual Actual Actual Actual Total Assets 129,717 117,819 105,632 98,099 Total liabilities (19,119) (22,969) (21,953) (17,050) 110,598 94,850 83,679 81,049 Borrowings (net of cash & cash equivalents) 66,502 51,559 46,891 40,163 Capital employed 44,096 43,291 36,788 40,886 110,598 94,850 83,679 81,049 Gearing 60% 54% 56% 50% Asset cover 1.66 1.84 1.78 2.02 Bond issue will be refinancing existing debt and will not impact existing gearing 21 Presentation to financial intermediaries – 31 May 2010
Financial objectives – Existing borrowings of € 70million will be reduced to circa € 37 million once all apartments are disposed of estimated by 2016 and subsequently to € 25million. – This will ultimately represent circa 22% of the estimated market value of the project. – We are looking to maintain a gearing of circa 25% to 30% long term. – SDC group aims to maintain a healthy balance between debt and equity. – In order to optimise upon the use of capital both external and internal and maximising shareholders value – Gradually replacing existing facilities with bonds or bullet loans that fit the plan – this issue is a step in this direction 22 Presentation to financial intermediaries – 31 May 2010
Reserves within the resilience test – No sales of commercial spaces or offices included – Partial refinancing of maturing bonds starting in 2016 Moreover: – Potential earnings from possible extensions within Portomaso not considered – Similar approach adopted re Halland redevelopment 23 Presentation to financial intermediaries – 31 May 2010
The Bond Issue 24 Presentation to financial intermediaries – 31 May 2010
Bond Issue – Salient Points • Issuer: Tumas Investments p.l.c. • Guarantor: Spinola Development Company Limited € 20 million (+ € 5 million over-allotment) • Amount: • Coupon: 6.2% • Interest: Semi-annual (Jan / July) 2017-2020 (8 – 10 years) • Term: • Final maturity date: 9 June 2020 25 Presentation to financial intermediaries – 31 May 2010
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