Valad Property Group Full year results 30 June 2007
Highlights � Underlying net profit up 36.1% to $76.2m � DPS 11.07 cents; up 7.5% from FY06 � Underlying EPS of 11.12 cents, up 6.5% from FY06 � Created Asia-Pacific and Pan-European platform � Pipeline execution on acquisitions in FY07 $6.2bn � AUM A$16.8bn* at 30 June 2007 and now $18.3bn � Forecast FY08 DPS and EPS 12.5 cents, represents 12%+ uplift on FY07 � $1.8bn equity raised* � Restructured organisation for growth � Total shareholder return in FY07 of >60% * Assumes Scarborough transaction complete 2
Agenda � Financial performance � International expansion � Structural changes � Pipeline execution and asset performance � Valad Capital Services � Funds management � Outlook 3
Financial Performance Southernhays Garden, Exeter 4
Year in review Net Profit DPS 76.2 80 11.07 11.0 56.0 Distribution (cps) 60 10.30 Net Profit ($m) 10.0 9.80 36.3 9.55 40 23.1 9.0 20 CAGR 7.3% 8.35 9.2 CAGR 46.5% 8.0 0 FY03 FY04 FY05 FY06 FY07 FY03 FY04 FY05 FY06 FY07 EPS NTA* 11.12 1.25 1.30 11.0 10.44 1.20 NTA ($/security) 9.95 10.0 1.10 EPS (cps) 0.99 9.00 1.00 9.0 0.88 8.10 0.90 0.82 0.82 8.0 CAGR 8.2% CAGR 11.1% 0.80 7.0 0.70 FY03 FY04 FY05 FY06 FY07 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 5 * NTA is $1.05 post balance date following the Scarborough acquisition
Financial performance summary FY07 FY06 Change Reported Net Profit $109.1m $78.9m 38% Underlying Net Profit* $76.2m $56.0m 36% Reported EPS 16.0c 14.9c 7.4% Underlying EPS* 11.12c 10.44c 6.5% DPS 11.07c 10.30c 7.5% Forecast FY07 FY08 Change EPS 12.5c 12% 11.12c DPS 11.07c 12.5c 12% * After income tax and before non-cash items (being: amortisation of intangibles, movement in fair value of investment properties and employee securities ownership plan non-cash benefits) 6
Financial performance summary $m FY07 FY06 Change Net rental income 48.7 40.9 19% Fund management & other fee income 26.1 19.5 34% VCS income 46.6 12.8 264% Property development & trading 6.4 16.0 (60%) Equity investment income 6.6 8.0 (18%) Interest income & other income 2.9 3.8 (24%) Total income 137.3 101.0 36% Total operating expenses (38.3) (25.1) 52% EBITDA 99.0 75.9 30% Borrowing costs (22.1) (19.6) 13% Depreciation (0.3) 25% (0.4) Corporate tax (0.3) (0.0) NA Underlying earnings (before non-cash adjustments) 76.2 56.0 36% Amortisation, rental straight-line and non-cash employee benefits (8.6) (4.9) 75% Fair value adjustment – investment property 42.1 27.9 51% Fair value adjustment – derivatives 0.0 NA (0.5) Reported net profit after tax 109.1 78.9 38% Distribution paid/payable 81.5 56.1 45% 7
EBITDA split FY07 Actual FY08 Forecast* Recurring fees 5% Recurring Fees 20% VCS & other interest 11% Profit share – VCS investment & other VCS and other 9% interest 8% Passive 54% Net Rental & Transaction fees incl. Other Passive Project profits performance fees 64% 8% 11% Transaction fees 10% * Forecast provided in 25 June 2007 PDS 8
Financial position summary Pro forma 1 Jun 07 Jun 06 Change Total Assets $1,382m $1,053m 31.2% $3,243m NTA/Security $1.25 $0.99 26.3% $1.05 Total debt drawn $211m $409m (48.4%) $666m Total debt facilities $570m $541m NA $1,391m* Weighted average debt term 3.1yrs 4.1yrs NA 4.7yrs Gearing (debt/total assets) 15% 39% NA 20% Look through gearing 2 (debt/total assets) 31% 44% NA 35% Interest cover 4.5x 3.9x NA 4.0x Ave interest rate – all debt (incl margins) 6.45% 6.63% NA 6.28% 1. Pro forma post Scarborough transaction 2. Look through gearing adjusted for Gold Fields House, self storage JV, Crownstone and JV warehouse entities for pro-forma 9 * Excludes warehousing JVs with capacity of $1.9bn
Capital management � Interest rates � Interest rates are 77% hedged for the next 12 months. The hedges have a weighted average maturity of 3.21 years and a weighted average interest rate of 5.08% � Foreign currency � Balance sheet – Our foreign currency exposure is actively managed to minimise risks as the business evolves. The existing policy is to maximise borrowings in the currency of the underlying investments in order to limit currency impact on the balance sheet – Foreign currency investments are substantially hedged through foreign currency borrowings or balance sheet hedges – refer appendices for details � Income statement – We have hedged foreign currency income within the following ranges: 1-2 years – 70% to 90% 3-5 years – 50% to 70% 10
International expansion 89 Essener Strasse, Hamburg 11
Valad European business Helsinki Stockholm Edinburgh York Gothenborg Malmo Scarborough Belfast Copenhagen Teesland office The Netherlands Leeds Hamburg Valad/Scarborough office Frankfurt London Crownstone assets Warsaw Berlin Brussels Munich Milan Budapest Paris Rome Note: Leeds and Scarborough offices are shared offices between Teesland and Scarborough 12
European platform � Acquired Scarborough property platform in July 2007 � Presence in local markets across Europe � Over 250 staff in 19 offices across 11 countries � Core UK assets and interest in diversified European portfolio Portfolio AUM by Geography � JV with HBOS which provides additional warehousing capability � Majority share in European real estate/funds management business Finland 1% Central Europe 3% � Diversified property services operation Germany 14% Sweden 11% Scarborough A$10.2bn AUM at 30 June 2007 Netherlands 6% Funds Property Property Portfolios Management 72% Services Norway 2% � 89 properties � AUM of A$8.8bn � UK Property across Europe Development A$242m � 14 funds France 9% and the UK � Development joint � Core and Core � With a total venture financing Plus focus value of A$848m A$1.7bn 1 � Asset Management Denmark 7% UK 47% 1 Based on 100% interest in SCP 13 Currency Conversion: A$1 = €0.629
European post balance date transactions � SCP investment in 12 assets; acquired for A$322.6m (€202.9m) � Aircom Park, Ratingen-Tiefenbroich, Germany (stock for German Aktiv fund) – Multi-let, light industrial asset acquired for €18.5m – Total area 25,829sqm with occupancy of 76.5% – Offers substantial reversionary upside potential � Tevlingsveien 23, Oslo, Norway (stock for Nordic Aktiv 2) – Multi-let office/warehouse asset acquired for €39.4m – Total area is 24,277sqm with occupancy of 84% – Rent rises of 20% are expected over calendar year 2007 � EIP - French and Dutch portfolio of 10 industrial assets – Divestment of €145m portfolio into SCP to be warehoused for future funds – Portfolio of multi-let industrial parks; 77% warehouse, 23% office by floor area – Total area is 233,939sqm with occupancy of 79.5% � Sc€uro investment in 14 assets; acquired for A$65.2m (€41m) � German portfolio generally located in the Düsseldorf area – Mixed use, mainly retail properties acquired for €41m – Total area 42,903sqm with current occupancy of 69% – Key asset is a modern 11,613sqm shopping centre in Monheim (€17m) – Gross initial yield is 9% including rental guarantee over majority of vacant space 14 Currency Conversion: A$1 = €0.629
Europe – Crownstone investment � Pan-European office fund with initial portfolio of 13 properties valued at €750m Portfolio AUM by Geography � Initial investment of €125m in February 2007, further €16m invested in two additional buildings Sweden 1% Finland 8% in the Paris and Stockholm areas Netherlands 12% � Strong leasing progress across the portfolio with highlights being � Milanofiori, Milan asset now fully occupied. New 7 year lease executed Italy 21% over pre-existing 22% vacant space � A further 23% of space taken up on 5 year leases in the Kluuvikatu 3, Helskinki property � The portfolio now comprises 15 office properties France 58% valued at €820m with significant upside potential underpinned by a large number of quality corporate tenants 15
New Zealand � West Plaza, Auckland � A$27m office asset; A$10m VCS investment � NLA of 8,452sqm including 818sqm of retail space. Currently 90% leased � Opportunity to add value through actively managing the leases and undertaking minor refurbishment works over the short-term � Maritime Tower, Wellington � A$75m prime waterfront office asset, A$18m VCS investment � NLA of 13,940sqm, currently 98% leased (76% leased on initial investment) � Opportunity to benefit from future rental growth � Albany Town Centre, Auckland Maritime Tower � NZ$200m town centre development; A$13m VCS investment � 13ha of land part of an existing town centre precinct � Sites acquired have the potential to be developed into over 30,000sqm of bulky retail, 50,000sqm of office space, a hotel, retirement facilities and residential � Carter Holt Harvey portfolio (post balance date) � A$277m investment portfolio comprising: – 15 Carters depots in NZ; A$48m (earmarked for new Valad fund) Tauranga – 10 packaging plants Australia and NZ; A$151m (Valad Property Trust) – Auckland office property A$9m (Valad Property Trust) – 5 development sites A$69m (Valad Funds Management Ltd) 16
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