Investor Presentation Year ended 30 June 2020 August 2020
12 Disclaimer Contents Contents FY20 Highlights 3 Eureka Strategy 5 Market Proposition 6 Portfolio Growth 7 FY21 Initiatives and Outlook 8 K ey Financial Information 9 3 2
FY20 Highlights FINANCIAL CAPITAL PORTFOLIO PERFORMANCE MANAGEMENT VILLAGES (30 OWNED, 8 MANAGED) Net profit a�er tax Net Debt Total Units $52.0m, up $5.8m due to $8. 10 m, up 19% 2,147 units, up 1.3% on PY acquisi�on on prior year (PY) Balance sheet gearing2 Earnings Per Share Occupancy 36%, in line with PY 3.52c, up 19% on PY 95%, up from 91% in PY Net Tangible Assets 35.2c per share, up 6% on PY Capital Recycling EBITDA 1 $12.2m, up 24% on PY $8.46m of disposals, Final Dividend up from $5.9m in PY 0.55c per share EBITDA core opera � ons 1 Total Dividends $8.70m, up 11% on PY Acquisi�on 1.10c per share, up 10% on PY Liberty Villas $13.13m Net opera�ng cash flow Total Assets $7.6m, up 60% on PY $145m, up 9% on PY Solar Energy Enhancement 2 Net debt to total assets excluding cash 13 villages converted to date 1 refer to page 9 for explana�ons 3
FY20 Highlights (cont) Acquisi�on and integra�on of Liberty Villas, a 124-unit village in Bundaberg, Qld Por�olio highlights: Disposal of 27 Terranora units for total considera�on of $6.39 million, resul�ng in a gain of $1.03 million. Subsequent to year end, disposal of 4 units for $1.13 million, with a further 1 exchanged contract for $0.30 million Board approval to proceed with Wynnum expansion of 22 units Weighted average cap rate 10.04% (2019: 10.22%; 2018: 10.31%) Response to COVID-19: Early implementa�on of best pra c �ce and preventa�ve measures Government financial support mi�gated increase in opera�onal costs Occupancy remained strong Con�nued strong debtor collec�on Ongoing vigilance and risk management The Board thanks all residents, families and staff for their support during this period Mr Greg Paramor AO joined the Board on 19 June 2020 Governance: Mr Lachlan McIntosh resigned from the Board on 31 December 2019 Eureka values the contribu�on it is able to make within the social infrastructure segment. Eureka is commi�ed to implemen�ng and communica�ng environmental, sustainability and governance best prac�ce ini�a�ves in FY21 3 4
Eureka Strategy Accele rate T he Mome n tum Accele rate t he Mome n tum Full benefit of increased occupancy and cost initiatives to flow through from FY20 FY21 FY21 Accelerate acquisition/development opportunities and capital recycling program Accele rate Accele rate Integrated information technology systems for accurate real time reporting and analytics the Engaging marketing and digital channels to connect with new networks and customers- building enquiry waitlists Mome nt um Mome nt um Instill a safety culture through the business - people and property safety Development and accountability throughout the Village Manager Ambassador network Continually improve our customer value proposition and experience FY20 Recap - Reset The Opera �ng Pl a � orm FY20 Recap - Reset The Opera �ng Pl a � orm Occupancy , Re v enue + Occupancy , Re v enue + Tea m Cu l ture + Tea m Cu l ture + S a f ety , Risk + S a f ety , Risk + In form a �on S yste m s + In form a �on S yste m s + Applic a �ons Applic a �ons Cost I ni� a �v es Cost I ni� a �v es En g a gem ent En g a gem ent Te chnology Te chnology Co mplian ce Co mplian ce F Y20 Improve referral network Increase o pera�ng Ongoing commitment to Improve and standardise CRM and customer Building Momentum to grow occupancy & intensity, accountability and safety for all and analy�cs quick decision making standardisa � on of policies revenue Marke �ng and digital Cost reduc � on ini � a � ves Training & development Procedures implemented channels to connect with strengthened to support team to mitigate COVID-19 risk customers and decision through COVID-19 period makers 3 5
Market Proposition Our co mp e ��v e adv anta ge: Our co mp e ��v e adv anta ge: Eure k a is a sp ec iali st own er and m ana g er o f rent al villag es f or ind epe nd ent se nio rs St rate gy: St rate gy: Rental villages for independent seniors Economically stable market underpinned by the government pension Popula�on shi� with increasing propor�on of seniors demographic Fragmented village ownership provides the opportunity for acquisi�on from private and corporate owners Mul�-faceted growth of the core business with • Portfolio enhancement through disciplined acquisitions and greenfield developments of new villages • Op�misa�on of the core business with sustainable occupancy, rental growth, cost control and cost effective value add refurbishments, with a focus on safety and comfort Custo mer propos i�on: Custo mer propos i�on: Independe nt living in a c ommunity en vi r onme nt Comf orta ble villag e lif es tyl e S a f e en vi r onme nt with like-minded neighbou rs Rent al mod e l with s impl e a g r eeme nt and no up f ront c api t al or e xit fees In v estor propos i�on: In v estor propos i�on: Gr owth oppor tuni� es e xi st to sc al e th e busin ess Dividends back e d by c onsi stent earnings Social i n f rastructure asset class Imp ro ving returns on e quity 3 6
Portfolio Growth Cairns North Queensland Capricorn coast Eureka opportunity - consolidation in a fragmented industry segment Australia-wide Wide Bay � � � � � Number of Villages: 38 � � � � � � � SE Queensland Number of Units: 2,147 Toowoomba Coffs Harbour, � � Port Macquarie, � � � Central New � � � � � � � � Newcastle South Wales � � � Canberra South Australia Regional � � � Victoria Victoria � � � Tasmania � � � � � � Eure k a Presence 3 7
FY21 Initiatives and Outlook Focus on generating improved operating cashflow through consistent occupancy and capital recycling Deliver earnings accretive acquisition and development opportunities to scale the business Deliver Wynnum village expansion of 22 units in a prime Brisbane metropolitan loca�on Cost effective v illage refurbishment program to improve Eureka’s customer value proposi�on and maintain occupancy Integrated technology systems across all business units 3 3 7. 8
Key Financial Information The table below summarises the results for the year ended 30 June 2020 ($’000) 30-Jun-20 30-Jun-19 Rental income 16,874 15,847 • EBITDA from core opera�ons up 11% Catering income 4,223 4,257 due to por�olio expansion, improved Service and caretaking income 3,712 3,132 occupancy and addi�onal service fees Revenue from ordinary ac�vi�es 24,809 23,236 ($’000) 30-Jun-20 30-Jun-19 Revalua�on net gain of $1.80m, including • Profit a�er tax 8,095 6,794 a $1.09m revalua�on upli� from Income tax expense 980 Tasmanian village por�olio - Deprecia�on and amor�sa�on 591 225 Finance costs 2,508 2,766 EBITDA 1 12,174 9,785 Gain on sale of Terranora uni ts $ 1.03m • Net gain on asset revalua�ons and impairments (1,799) (1,953) Gain on sale of Terranora units (1,031) - Refund of prior period GST (644) - EBITDA 1 from core operations 8,700 7,832 3.5 2 2.95 Basic earnings per share (cents) Diluted earnings per share (cents) 3.52 2.95 1EBITDA (Earnings before interest, tax, deprecia�on and amor�sa�on) is an unaudited non-IFRS measure however, the directors believe it is a readily calculated measure that has broad acceptance and is referred to by regular users of published financial statements as a proxy for overall opera�ng performance. EBITDA presented has been calculated from amounts disclosed in the financial statements. 3 9
Key Financial Information The table below summarises the balance sheet at 30 June 2020 ($’000) 30-Jun-20 30-Jun-19 Assets Cash and cash equivalents 2,451 3,060 • Inventory - Terranora unit sales Trade and other receivables 1,065 1,503 underway. 31 units on hand at year end. Inventory 4,880 9,215 27 units on hand at the date of this Joint Venture Investment 5,955 4,661 presentation including 1 under contract Investment property 121,443 105,406 Other proprety assets 1,077 1,178 Intangibles and other assets 8,334 8,049 • Joint venture investment upli� with Total Assets 145,205 133,072 underlying revalua�on of Tasmanian villages por�olio Liabili�es Trade and Other Payables 2,125 1,672 Provisions 596 428 • Acquisi�on of 124-unit village in Deferred tax liability 980 - Bundaberg, Qld Other financial liabili�es 55,636 49,490 Total Liabili�es 59,337 51,590 • Debt facility increased to $60M from Feb Net Assets 85,868 81,482 2020. Increase in net debt of $5.85m to support acquisition of new village 3 10
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