Annual General Meeting 27 November 2009
Annual General Meeting Disclaimer The content of this presentation is for general information only. It does not take into account your objectives, financial situation or needs. Before acting on any information contained in this presentation, you should consider its appropriateness, having regard to your objectives, financial situation and needs. FKP Property Group, its directors, employees and advisers do not represent or warrant that the information is or will remain accurate, reliable or complete. Whilst every effort has been taken to ensure that any forecasts contained in this presentation are based on reasonable assumptions, actual results may vary from those forecast. To the extent permitted by law, FKP Property Group, its related bodies corporate, their directors, employees and agents exclude all liability in respect of any loss arising in any way (including by way of fault or negligence) from reliance on the information contained in this presentation or otherwise arising in connection with this presentation.
Annual General Meeting Chairman’s Address Seng Huang Lee
Annual General Meeting Managing Director and CEO Report Peter Brown
• About FKP • Financials • Business Overview • Outlook
About FKP 30 + quality Over years residential 6,000 operating asset base history land lots urban 12,500 renewal diversified residents developments property company in our retirement at transport communities hubs $2b significant 28% reduction funds under debt management in operating costs 6
Overview • FKP now benefits from a strong financial position • Stability of retirement operations and its cash flow • Extended or restructured $1.1 billion of debt facilities – gearing 28% • Realised $500m of non-core and trading asset sales since mid 2008 • Significant reductions in operating costs • FKP’s strategy positions it well to deliver growth • Diversity of business segments • Diversity of geographic spread • Integrated business model • Balance of recurring and non-recurring income • Quality Asset Base • Retirement industry leader - 10,200 units • Residential land – 6,000 + lots (includes joint ventures) • Residential apartments pipeline – 3,000 + units (includes joint ventures and retirements) 7
Positioned for residential recovery Development Pipeline • FKP is set to capitalise on the Retirement recovery cycle with significant 15% leverage to the residential sector Commercial & through its retirement assets, Industrial masterplanned communities and 5% apartment developments Residential • Total residential exposure of FKP’s Land Residential development pipeline is 95% 1 59% Apartments 21% 1 Measured as a percentage of June 2009 inventory, including retirement, excluding Energex (sold after balance date) 8
Financials • FY09 operating profit of $78.6m – within guidance • Full year statutory result of $319.4m loss, consistent with guidance • Operating EPS of 7.0 cps (pro forma for full year impact of July 2009 Entitlement Offer) As at 31 July 2009 gearing 1 is 28% • Divisional Operating Profit Recurring Income Trusts and Non-recurring 12% Retirement 72% Investments 16% Recurring 88% Funds Management 1% Land 2% Development 9% 1 Net bank debt to assets net of resident loans 9
High Quality Assets Residential Commercial & Investment & Funds Retirement Communities Industrial Management • Leading retirement brand – • Over 6,000 land lots • Specialist expertise in • $2.0bn funds under ”Aveo – Live Well” remaining creating integrated work, management retail, storage and utility • Portfolio of 45 owned • Sites located in attractive • Joint fund manager of RVG, spaces and facilities retirement villages and diversified growth largest retirement fund in the corridors combined Australia and NZ • Manages additional 35 • Geographic and sector market villages for Retirement diversification • Prominent urban renewal Villages Group (RVG) (over sites in Brisbane and • 11 properties in FKP 4,000 units) Melbourne Property Trust • Pipeline for further development 10
Our Business - Retirement Operations • FY09 recap – Difficult year finished on a high note with strong June 2009 quarter – Positive momentum continuing into first quarter of FY10 – Average portfolio price growth of 6% • Budgeting for significant lift in cash DMF / capital gain in FY10 • Retirement operations met sales budget for the first quarter and is currently on track to meet first half budget 11
Our Business - Retirement Operations FKP’s Retirement Assets • Prime locations have allowed sustained North Queensland long-term growth since inception of villages FKP: 143 units • FKP’s retirement village portfolio is South East Queensland / distinguished by its geographical presence Northern New South Wales FKP: 3,720 units in strong growth states (emphasis on RVG: 374 Queensland and South Australia) and concentration in capital city locations Sydney FKP: 906 units RVG: 649 Location of Villages Canberra RVG: 126 units Adelaide Gold & Sunshine Coast Melbourne FKP: 1136 units 19% FKP: 150 units RVG: 2,881 Hobart Regional Areas FKP: 157 units 4% State Capitals 77% 12
Our Business - Residential Communities • Land FY09 recap − First stages of Point Cook under construction with >200 pre-sales − Peregian Springs / Ridges impacted by slowdown, but 2H stronger than 1H • Apartments FY09 recap − SL8 development completed and substantially sold − Concentration on clearing inventory to recycle capital • Quality urban sites being re-weighted towards residential • Rochedale approvals expected in coming months • Aerial sales and marketing launched this week 13
Our Business - Residential Communities Residential Development Land Bank Newstead: 700 units Albion: 330 units Peregian Springs / Ridges: 1,450 lots Milton: 300 units Rochedale: 1,100 lots Currumbin, 500 lots Mulpha FKP: 330 units + 900 lots Camberwell: 140 units Point Cook: 2,300 lots 1 Land Medium Density Development 1 Over 200 lots pre-sold 14
Our Business - Commercial and Industrial • FY09 recap − Major commercial projects successfully sold – TAC and Energex (post balance date) − Concentration on clearing inventory to recycle capital • The commercial and industrial markets remain challenging, however the first quarter FY10 has seen a good increase in enquiry levels for commercial and industrial space • The commercial and industrial team is asset managing all properties in the Property Trust and managed funds 15
Our Business - Funds Management • FY09 recap − Core Plus Funds capital position stable. All properties externally valued at June 2009 and debt is comfortably within LVR − RVG was recapitalised, and in common with the FKP portfolio is seeing an improved trend in operations • Executing repositioning strategies on a number of properties within the Core Plus funds Total Funds Under Management - $2.0b 1, 2 Core Plus Fund Retirement Villages Group Core Plus Two Fund FKP Property Trust 1 FKP is joint fund manager with a 50% interest in the Retirement Villages Group fund manager 2 As at 30 June 2009 16
Our Business - Trust and Investments • FY09 recap Holding 1 Book Value Portfolio Investments (A$m) 1 – Successful completion of Browns FKP Property Trust 100% 362.7 Plains Bulky Goods and Town Retirement Villages Group 16% 114.4 Centre US Senior Living Group 50% 30.5 FKP Core Plus Fund 15% 15.7 – US Senior Living investment FKP Core Plus Fund Two 28% 9.1 performed satisfactorily in difficult Total 532.4 US climate, and has not required any base currency impairment FKP Property Trust Diversification 1,2 charge Commercial 56% • Successful sale of Redbank Shopping NSW 52% Centre settled in October. Proceeds Retail 44% have further reduced debt levels • Property Trust portfolio well diversified QLD 38% • Management focus on leasing profile • Major refurbishment work completed at VIC 10% Clarence St 1 As at 30 June 2009 2 By asset value after estimated non-operating items 17
Outlook • Caution required given the impact of the financial crisis, but FY10 operating profit forecast to be higher • Cash flow from operations also forecast to be higher in FY10 • Land set to re-emerge as strong contributor to profit and cash flow • FKP is geared for growth, with a strong balance sheet and outstanding assets, and is set to capitalise on the recovery cycle with significant leverage to the residential sector • Opportunities opening up in the retirement space to further expand market leadership 18
Annual General Meeting Resolutions
Annual General Meeting Resolution 1 That Mr Seng Huang Lee, who retires by rotation in accordance with clause 10.3 of the Company’s Constitution, is re-elected as a director. Proxies Received For 801,947,251 Against 46,863,433 Open 4,934,033 Abstain 4,415,113
Annual General Meeting Resolution 2 That Mr Leonard McKinnon, who retires by rotation in accordance with clause 10.3 of the Company’s Constitution, is re-elected as a director. Proxies Received For 844,310,179 Against 4,440,335 Open 5,014,908 Abstain 4,394,408
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