ING Real Estate AUSTRALIA Community Living Group 2011 Annual Results Presentation Simon Owen Chief Executive Officer 26 August 2011
Agenda Highlights Key financials Capital management Review of operations Strategy and outlook Appendices 2
Highlights Progress against 2010/11 strategic initiatives • Successful conversion of three QLD villages in October 2010 with 18 sales achieved � Execution of DMF Conversion and 22 contracted and reserved as at 30 June 2011 Project • Planning underway for additional village conversion • Five non-core rental villages divested at significant premium to book value � Divest Australian non-core assets • Currently negotiating the sale of an additional three non-core villages • Recently announced sale of 15 assets for US$171.5m (net A$30m – 6.8¢ per unit) � Unlock value in US Seniors portfolio • Retain six A-grade communities in Long Island, New York • Debt reduced by A$6.6m in six months to June 2011 with further A$30m to be repaid � on settlement of US Seniors non-New York assets Australian debt reduction • Proforma Australian LVR ~40% • Occupancy up by 8% in FY11 to 81% as at 30 June 2011 � Improve Garden Villages Rental occupancy rate • Target long-term stabilised occupancy of 89% • Hand-back progressing well with one asset remaining; exit of portfolio expected to � Exit US Students complete by December 2011 • Ongoing negotiations with University well advanced for longer term contract Review strategy for NZ Students portfolio • NZ$20.8m loan facility extended for six months to February 2012 3
4 Key financials Residents at Settlers Lakeside, WA
Key financials Asset sales impacted earnings while strengthening balance sheet metrics Key financial metrics FY2011 FY2010 Statutory profit/(loss) $m 13.1 (67.7) Operating income $m 6.9 18.3 Operating income per unit cents 1.6 4.1 Look through Gearing % 69% 73% Assets under management 1 $m 644.0 772.9 Net Asset Value (NAV) per unit cents 25.9 24.9 Net cashflow from operations $m 8.6 14.6 > Increased statutory profit attributable to stabilisation of asset values > Fall in operating income primarily attributable to the sale of the US/Canadian Meridian and Regency portfolios in FY10, and the loss of income ($4.9m) from the close out of capital hedges in November 2010 > Look through gearing improves as asset sales proceeds are used to pay down debt 1. Gross value before resident loan liabilities 5
Key financials NAV firming slightly despite appreciation of AUD 29 25.9 (0.1) (2.0) 27 1.6 25.9 1.5 24.9 25 A$ cent per unit 23 21 1.0 NZ and US Students (4%) 2.4 AU Conversion (9%) 19 2.8 AU Settlers (11%) 9.9 AU Garden Villages (38%) 17 7.7 Non-New York (30%) 2.1 New York (8%) 15 1 /06 /2 01 1 30-Jun-10 Operating Income Valuations Foreign currency Other 30-Jun-11 NAV breakdown (cents per unit) > Contribution of earnings and favourable valuation movements largely offset by appreciation of AUD and NZ Students write-down > Australian portfolios represent 58% of NAV and approximately 88% post settlement of partial US sale 6
Key financials Earnings reconciliation – FY11 Operating income 25 > Garden Villages portfolio is the key and growing contributor to earnings 2.5 (3.1) 20 1.2 (0.4) > DMF Conversion income impacted by expensing of (8.9) 2.8 one-off launch and set-up costs. Significantly 15 0.5 6.5 A$m higher contribution forecast in FY12 10 > Derivative income is derived from CCY swaps 6.9 5.8 closed out in November 2010 and is non-recurring 5 Non-New York 2.8 > Finance costs are expected to fall materially in New York 3.0 FY12, a result of lower interest margin and lower 0 debt post settlement of partial US portfolio sale s s s s s s s s t n r e e t t e r n e e n s o m m o s g l e e o i t n i o n s t d d C o a e e e r u c u c l l S p S e t n e n i t S V v I x S c I S n s E n g n Z S U o e a n e N d v U n C i d n t i i t F a r F u a a r F M v e G i p D r O e D 7
Key financials Cashflow reconciliation – FY11 Cashflow 80 0.7 (0.6) (6.9) 5.3 > One-off capital hedges termination costs were paid 70 10.2 (7.7) in November 2010 60 (16.0) 12.7 50 > Investment property sale proceeds from the 19.9 A$m (22.8) 40 divestment of five non-core Garden Villages were utilised in debt repayments 30 20.2 20 15.0 > Capex and development costs attributable to 10 Settlers Ridgewood Stage 8 and DMF Conversion, enabling development income and cashflow in 0 s s s s 1 h s s s s s n e r t t 1 s r d t s s n t w o o n n 0 FY11 and in future years a l o o a e o o i i e e 2 c n S n e C C i d m t m e e e c a g w y g v n S S o e n y n t n e u a r v a r i i n S P D m n r e o i p J w d a e p U M e e & r 0 i o p o e R t l l b a 3 O r a e r T x r r t e P S t h t o e e b a D s s B p g t n r e u a n a D a d A e t C e C i e e m d g N H n i r t a s e l h a e M t v c i x p n & E a I y C c n e g e R 8
9 Capital management Settlers Gladstone Gardens (DMF Conversion), QLD
Capital management Fund’s look through debt maturity profile to significantly improve with partial US sale > Partial sale of US portfolio will create a significant reduction in look through debt with the remaining US assets having a Debt maturity profile as at 30 June 2011 long dated maturity profile > Renegotiation of contract with Victoria University of Wellington will trigger refinance of short term NZ debt facility Debt maturity profile – 30 June 2011 (Proforma) 1 Debt maturity profile – 30 June 2011 140 140 125.4 119.6 120 120 109.1 96.2 100 100 A$m 80 80 A$m 66.2 60 60 40 40 14.5 20 20 14.5 11.6 0 0 FY2012 FY2013 FY2014 FY2015 FY2016 >FY2016 FY2012 FY2013 FY2014 FY2015 FY2016 >FY2016 Total USD Debt A$246.2m Australian Seniors US Seniors NZ Students Australian Seniors US Seniors (New York) NZ Students Australian Seniors US Seniors NZ Students 1. Proforma represents the debt maturity profile as at 30 June 2011 adjusted for the sale of the Non New York US Seniors portfolio and the application of the net sale proceeds to the Australian debt Note: The above charts exclude US Students debt 10
Capital management Australian gearing continues to improve > Application of US sale proceeds to repay Australian debt will considerably reduce gearing > Proforma gearing position will provide capital to fund internal growth initiatives > Remaining US Seniors debt long dated, non recourse and covenant light Look through gearing – 30 June 2011 Look through gearing – 30 June 2011 (Proforma) 1 90 100 83 91 90 80 69 67 80 70 67 70 60 57 60 % 46 % 50 50 40 40 30 30 30 20 20 10 10 0 0 Australian US Seniors NZ Students Total Australian US Seniors NZ Students Total Seniors Seniors (New York) Stronger capital position Australian debt Offshore debt Australian debt Offshore debt 1. Proforma represents gearing as at 30 June 2011 adjusted for the sale of the Non New York US Seniors portfolio and the application of the net sale proceeds to the Australian debt Note: The above charts exclude US Students debt 11
12 Review of operations Settlers Ridgewood Rise, WA
Review of operations Increased focus towards Australia Australian Australian Australian US Rental NZ Portfolio 30 June 2011 Rental DMF DMF (New York) Students FY 2011 1 Conversion (Proforma) Properties 26 4 3 6 3 42 Units 1,371 677 216 914 359 3,537 Book Value A$89.7m A$56.5m A$26.4m US$132.2m NZ$22.5m A$313.3m (ILF Share) Occupancy 81% 95% 50% 92% 90% 85% Occupancy Trend > Partial sale of US Seniors increases Australian property weighting from 34% in FY10 to 55% in FY11 > Low DMF Conversion occupancy reflects transition from rental to DMF with 108 units currently available to be sold down and monetised 1. Profoma excludes 15 non-New York assets divested as announced in July 2011 and the US Students as portfolio is currently undergoing hand-back 13
Review of operations Our Australian focus TWO PRIMARY BRANDS Rental DMF Conversion DMF Villages > 26 Rental Villages across Australia > 3 rental villages converted to > 4 DMF Villages (3 in WA / 1 QLD) DMF model in Oct 2010 > Core market is pension supported seniors > Target self funded retirees with > Villages located in Rockhampton, mid-market homes > Average resident age 78 years Gladstone and Forest Lake in QLD > Average resident age 75 years > Average resident length of stay is 2 years > Rebranded as Settlers villages > Average length of stay expected to > Feasibility underway for expansion of be 11 years Gladstone village > Planning underway for conversion of an additional village 14
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