INVESTOR UPDATE ROADSHOW 2014

Transcription

1 INVESTOR UPDATE ROADSHOW 2014 CREATING CAPACITY TO MEET DEMAND November 2014 David Carr Chief Executive Officer Stuart Harrison Chief Financial Officer Stephen Freundlich Fund Analyst and Investor Relations Manager

2 AGENDA 2014 Highlights Creating long term value Financial result review Healthcare sector drivers Portfolio overview Development and acquisition update Looking ahead 2

3 HIGHLIGHTS Creating capacity to meet demand Delivered to investors a full year 2014 cash distribution per unit of 7.9 cents Strong performance in core portfolio of Australian assets Solid operational and portfolio improvements Year on year distributable earnings growth Strategy delivering on all fronts Long term sector outlook positive 3

4 10 YEAR TOTAL RETURN PERFORMANCE 4 Source: Bloomberg, Craigs Investment Partners. Total returns (capital gain plus income) as at 30 June 2014.

5 UNIT PRICE PERFORMANCE & KEY PORTFOLIO ACTIVITIES Post Australian portfolio acquisition 5

6 Creating long term value

7 VITAL S HEALTHCARE REAL ESTATE UNIVERSE 7

8 LONG TERM STRATEGY Expert focus in the healthcare real estate sector Low-risk, medium-return investment characteristics Leading developer, manager and investor in Australasian healthcare real estate Long term relationship based approach with our tenants and operators Pursue appropriate opportunities for growth, diversification and liquidity 8

9 STRATEGIC VALUE DRIVERS Successful execution on sum of parts Management Aligned / Stable / Experienced / Credible / Capable Stabilised portfolio Brownfield developments (capacity expansion) Acquisitions Capital & Treasury Sustainable long term earnings & value New 30-year lease with MercyAscot at Ascot Hospital Solid revaluation gains and improved core portfolio metrics Completed four developments A$28m Hurstville redevelopment Development opportunities ongoing Capability & credibility recognised Opportunities across the healthcare real estate spectrum First WA acquisition adding diversification, creating opportunities Renewal of bank facilities on competitive terms Introduced BNZ Treasury and foreign exchange management continues to be effective Quality, diversified healthcare portfolio Maintain a defensive and diversified earnings profile Manage prudent growth within strategic framework 9

10 Financial result review

11 FINANCIAL SUMMARY Strong operating performance driving financial outcomes +9.0% Gross rental income growth (pre currency) $ 37.4m Net profit after tax (+7.8%) $ 34.7m Net distributable income (NDI) (+23.1%) 10.8% Increase in NDI per unit cpu Cash distribution delivered in line with guidance

12 FOREIGN EXCHANGE Hedging helps mitigate balance sheet and earnings volatility 12 Foreign exchange policy framework minimises earnings volatility and reduces the influence on its balance sheet.

13 TREASURY CAPITAL MANAGEMENT Business well capitalised, supported by committed long term partners A$ 100m Additional new facility BNZ Introduction diversifies capital funding partners 5.66% Weighted average cost of debt 4.1 Year weighted average facility term 13

14 TREASURY CAPITAL MANAGEMENT Strong balance sheet with capital to deploy 14

15 Healthcare sector drivers

16 FUNDAMENTAL DRIVERS OF HEALTHCARE Macro demands driving supply 16

17 PRIVATE HEALTH INSURANCE IN AUSTRALIA Hospital treatment coverage in Australia (insured persons) quarterly total 36 quarters of consecutive growth 17 Source: Quarterly PHIAC data to 30 June 2014

18 Portfolio overview

19 PORTFOLIO REVIEW Core portfolio in great shape $613.1m Investment portfolio value $ 15.2m Portfolio revaluation gain (+2.5%) 30 year lease Mercy Ascot 15.1years WALT 2.6% Average rent increase % Occupancy As at 30 June 2014

20 PORTFOLIO DIVERSIFICATION 24 properties comprising over 1,500 hospital beds and 72 operating theatres NT QLD WA SA NSW VIC NZ TAS 20 As at 1 November 2014

21 Development and acquisition update

22 HURSTVILLE PRIVATE HOSPITAL SYDNEY Photograph taken December

23 HURSTVILLE PRIVATE HOSPITAL SYDNEY Photograph taken May

24 HURSTVILLE PRIVATE HOSPITAL SYDNEY Photograph taken August

25 HURSTVILLE PRIVATE HOSPITAL SYDNEY Photograph taken October

26 HURSTVILLE PRIVATE HOSPITAL SYDNEY Architect s impression of the completed development Direction that the previous 4 photographs were taken from 26

27 THE MARIAN CENTRE PSYCHIATRIC HOSPITAL ACQUISITION Located in the established medical precinct of Subiaco 27

28 THE MARIAN CENTRE PSYCHIATRIC HOSPITAL ACQUISITION Acquisition details Acquired for A$13.5m on an initial yield of 8.5% Currently a 31-bed stand-alone private psychiatric hospital New 20 year net lease to Healthe Care Annual CPI reviews + 10-yearly to market Western Australia has the highest private health insurance levels of all Australian states Opportunity to partner with a proven and experienced operator Adds attractive geographic, asset and activity diversification 28

29 THE MARIAN CENTRE DEVELOPMENT OVERVIEW Immediate commitment to A$10.8m brownfield project Increase bed numbers from 31 to 66 and refurbish existing ward accommodation Design allows for a second stage development as demand requires New lift and lobby, dining area and provision of additional consulting suites Forecast completion August Architect s impression of the completed development

30 VALUE ADD DEVELOPMENT OPPORTUNITIES BROWNFIELD PIPELINE CREATES CAPACITY FOR OPERATORS 24 month forecast ~A$85m 30

31 Looking ahead

32 LOOKING AHEAD Strategy Strong foundation to consider wider healthcare real estate opportunities delivering scale and diversification Healthcare trends Portfolio management Positive long term fundamentals, constrained capacity creating opportunities Emphasis on medium term lease expiry event and maintaining strong portfolio metrics Earnings Focus is on tenure, quality and diversification of earnings Guidance Board prudently guiding to a FY15 cash DPU of 8.0 cpu 32

33 DISCLAIMER This presentation has been prepared by Vital Healthcare Management Limited (the "Manager") as manager of the Vital Healthcare Property Trust (the "Trust"). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied on as such. You should obtain independent professional advice prior to making any decision relating to your investment or financial needs. The provision of this presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase units in the Trust. Past performance is no indication of future performance. No money is currently being sought, and no applications for units will be accepted, or money received, unless the unitholders have received an investment statement and a registered prospectus from the Trust th November

34 34 Thank you