FKP Property Group 2013 Annual General Meeting. 1 November 2013

Transcription

1 FKP Property Group 2013 Annual General Meeting 1 November 2013

2 Agenda Aveo Oak Tree Hill Glen Waverly, VIC 1. Chairman s Address 2. Chief Executive Officer s Address 3. Securityholder Resolutions 4. Questions

3 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. 3

4 Annual General Meeting Aveo Springthorpe Macleod, VIC Chairman s Address Seng Huang Lee

5 Annual General Meeting Aveo the Parks, Earlville, QLD Chief Executive Officer s Address Geoff Grady

6 Aveo Group Strategic Approach Creating value by progressing to pure play retirement Proposed rename to Aveo Group by securityholder resolution at today s Annual General Meeting (AGM) Rationalise the FKP, AEH and RVG platforms as negotiation allow Accelerate the unit development pipeline Focus on growth of existing and new care offerings What this means for non-retirement assets and construction business Continue to sell-down non-retirement assets over the medium-term from a position of strength Internal construction activities to cease Will continue to exit remaining fractional platforms (sold PBD Developments stake subsequent to FY13 period end) Achieved sales totalling $165m in Property Trust assets, all at or around book value, during last 12 months Balance sheet revalued and the capital position under control Non-retirement assets fair valued at 30 June 2013 and values demonstrated as realisable Debt to be significantly reduced via proceeds of Entitlement Offer and asset sales Continued support of major shareholder demonstrated in recent Entitlement Offer 1 Includes Retirement Villages Group development pipeline. 6

7 Key FY13 Financial Outcomes Outcome FY13 FY12 Comment on FY13 Statutory profit after tax ($166.5m) ($350.3m) Underlying profit after tax $39.2m $41.3m Underlying EPS 13.6cps 24.1cps Dividend/Distribution 1.0cps 19.6cps NTA per stapled security 1 $3.53 $6.33 Gearing 31.5% 39.0% Principally driven by development impairments Impacted by sale of company owned retirement stock Adjusted for additional stapled securities on issue following the 2012 shareholder entitlement offer Reduced distribution in line with focus on capital management Adjusted for additional stapled securities on issue following the 2012 shareholder entitlement offer and nonretirement impairments Reduced by the 2012 shareholder entitlement offer, asset sales, and the sell-down of company owned retirement stock 1 Restated for security consolidation. 7

8 Retirement: FY13 Results FY13 FY12 Change Comments Key Performance Indicators Total sales $153.4m $134.1m 14% Current sales strategy is delivering improved results Total sales (units) % Current sales strategy is delivering improved results Portfolio turnover (based on sales) 10% 8% 2% Strong turnover compared to peers Occupancy 95% 93% 2% Sell-down of company owned stock has reduced vacant units Average age of residents (years) Age of residents continues to grow with the mature portfolio Underlying property value $1.8b $1.9b (5%) Reflective of previous price adjustments Profit Contribution Retirement Operations $24.0m $33.2m (28%) Driven by change in the mix of sales with a focus on company stock Retirement Funds and Investments $4.0m $13.1m (69%) Reduced profit contribution from RVG Total Retirement Contribution $28.0m $46.3m (40%) Temporary decrease in divisional profit contribution was driven by a focus on clearing low profit margin company owned stock to recycle capital With company owned stock levels now back to near target levels, mix of sales and profit will return to more normalised levels going forward Strong turnover demonstrates that the back to basics approach taken by management in FY13 is working, with sales and occupancy improving during the year 8

9 Non-Retirement: FY13 Results Residential Communities & Apartments Increased profit contribution driven by completion of the Aerial apartment Lower sales volumes at Residential Communities land estates reflected subdued market conditions Luxe remains on track to be completed in mid FY14 Construction underway at The Milton Commercial & Industrial - Development Sale of Gasometer 2 settled in May 2013 Completion of Gasometer 1 in July 2013 with leasing of retail space almost fully complete Investment Property Sale of 465 Victoria Avenue, Chatswood, Brown Plains Town Centre and Browns Plains Homemaker Centre, Brisbane for a total of $134m Miller Street, Pyrmont acquired in 2H13 as part of Core Plus Two Fund wind-up Key Performance Indicators FY13 FY12 Change Residential Communities & Apartments Divisional profit contribution $30.2m $18.9m 60% Sales revenue $171.8m $100.3m 71% Land lot sales (36%) Built product sales % Mulpha FKP lot sales % Average margin (incl. interest) 2 21% 27% (6%) Average margin (excl. interest) 2 33% 40% (7%) Commercial & Industrial Divisional profit contribution $14.3m $9.3m 54% Comprised of: Development $8.6m $0.4m 2,050% Investment Property $5.7m $8.9m (36%) Trading sales revenue $71.8m $14.2m 406% Properties held 2 4 (50%) 1 Includes 3 (FY13) and 52 (FY12) lots relating to englobo sales. 2 Does not include Mulpha FKP. 9

10 Units Units Retirement: FY14 Operating Update Sales Activity Unit sales volumes outperformed prior comparative periods each month so far in FY14 Unit sales volumes for first quarter FY14 nearly double sales for first quarter of FY13 Sales numbers have not been generated at the expense of deposit levels which have remained relatively consistent during the quarter despite the stronger sales rate Care Offering Ongoing assessment of internal and external resources to extend care services within the portfolio Current care offerings standardised and now being streamlined across the entire portfolio Development Activity Development activity ramping up with construction expected to commence in FY14 at four development sites across the portfolio Staffing resources have been allocated and a development program is in place to achieve 200 new units per annum by FY16 Retirement Sales Volumes Q1 FY13 v FY July August September First Quarter FY13 FY14 Retirement Total Deposits on Hand Q1 FY13 v FY July August September FY13 FY14 10

11 Non-Retirement: FY14 Operating Update Residential Communities Residential market continues to recover with improved sales rates across all developments A second builders display village earmarked for Rochedale with interest from both new and existing builders Sales rates at Peregian Springs/Ridges have improved significantly with old stock selling down Outsourced sales and marketing at Point Cook which has seen sales rates improve over the past couple of months Residential Apartments Increased sales activity at LUXE with only five apartments remaining for sale Over 70% of The Milton has pre-sold to date and since construction has commenced, there has been strong renewed interest from local buyers Commercial & Industrial Successful launch of Gasometer 1 in September 2013 with retail space open to the public and all retail space let Settlement of $25 million of lots at Mackay Industroplex (profit recognised during FY13) Remaining projects continue to be sold down as negotiations allow 11

12 Rationale for the Entitlement Offer Seeking to further de-lever in line with strategy of transforming into a pure play retirement operator and has implemented a number of strategies, including the sale of non-retirement assets, in order to achieve this result As part of this process, the Entitlement Offer (Offer) removes concerns on debt levels and along with nonretirement settlements, is expected to produce one of the strongest balance sheets in the industry The Offer will allow FKP to deal with all short term debt maturities, including: $88 million convertible note, with an investor put in January 2014 Wilbow loan amortisation of $25 million in December 2013 $45 million pay-down of the Retirement Syndicate facility The Offer allows FKP to accelerate the implementation of its strategy of transforming to a pure play retirement business by: Bringing gearing into line with retirement industry peers Providing flexibility to explore accretive retirement development and care activities as non-retirement asset sales progress Enabling FKP to proceed with asset sales from a stronger capital position 12

13 Overview of the Entitlement Offer Overview Accelerated pro-rata non-renounceable Entitlement Offer to raise approximately $232 million Underwritten by Goldman Sachs 1 Mulpha has committed to take up its circa 26% entitlement (approximately $61 million) in full 2 In addition to its entitlement take up, Mulpha has agreed to sub-underwrite the Entitlement Offer up to $20 million 3 Use of Proceeds Net funds raised will be used to de-lever and meet short-term debt maturities thereby improving FKP s capital position and providing financing flexibility Offer Ratio of 5 for 9 to issue 179 million New Stapled Securities Pricing $1.30 per New Stapled Security 36.0% discount to last close on 25 October % discount to theoretical ex-rights price (TERP) % discount to pro-forma net tangible assets per Stapled Security 5 (pro-forma NTA) Strategy The Entitlement Offer is expected to provide FKP with the ability to significantly reduce leverage and focus on its core strategy of ownership and management of retirement villages 1 The commitment by Mulpha to take up its entitlement in full is not underwritten. References to Mulpha in this presentation are references to the wholly-owned subsidiaries of Mulpha International BHD which are substantial holders of Stapled Securities. 2 Mulpha s commitment will be subject to settlement under the retail timetable. 3 See slide 44 of the Entitlement Offer Presentation released on 28 October 2013 for further details on the nature of Mulpha's sub-underwriting commitment and for further details on the potential effects of the Entitlement Offer on the control of FKP. 4 The TERP is a theoretical price at which Stapled Securities should trade immediately after the ex date of the Entitlement Offer. The TERP is a theoretical calculation only and the actual price at which Stapled Securities trade immediately after the ex date for the Entitlement Offer will depend on many factors and may not be equal to TERP. 5 Pro forma NTA calculated by adjusting FKP s 30 June 2013 net tangible assets (NTA) by giving effect to the Entitlement Offer and the application of the proceeds described in this presentation as though it occurred on that date, see slide 21 for details. As at 30 June 2013, FKP had NTA per Stapled Security of $3.53, prior to effects of the Entitlement Offer. Pro forma data in this presentation gives effect to the Entitlement Offer, the application of the proceeds of the Entitlement Offer and the sale of the Lonsdale Street asset as though they occurred on 30 June 2013 unless stated otherwise.. 13

14 $m Entitlement Offer Balance Sheet Impact % (31.2) (227.4) 19.3% NTA per security - Net Debt at 30 June 2013 Lonsdale St Sale Entitlement Offer Pro-forma Net Debt Post Entitlement Offer $3.53 $ Pro forma NTA calculated by adjusting FKP s 30 June 2013 net tangible assets (NTA) by giving effect to the Entitlement Offer and the application of the proceeds described in this presentation as though it occurred on that date, see slide 21 of the Entitlement Offer Presentation released on 28 October 2013 for details. As at 30 June 2013, FKP had NTA per Stapled Security of $3.53, prior to effects of the Entitlement Offer. Pro forma data in this presentation gives effect to the Entitlement Offer, the application of the proceeds of the Entitlement Offer and the sale of the Lonsdale Street asset as though they occurred on 30 June 2013 unless stated otherwise.. 14

15 Net Debt $m 1,2 00 1, Executing on Strategy 30-Jun-12 to 31-Dec-12 1-Jan-13 to 30-Jun-13 Post 30-Jun-13 $200m Entitlement Offer Sale of 50% interest in Homemaker Centre at Browns Plains Sale of 465 Victoria Avenue, Chatswood Sale of Browns Plains Village Square assets Sale of Gasometer 2 New CEO and management team with extensive experience and strong understanding of the retirement sector Announced intention to become a pure play retirement operator Sale of 399 Lonsdale Street Reached an agreement for the sale of an interest in 50% of The Milton and an interest in part of Point Cook RVG to sell 37.7% stake in MET for NZ$280 million with settlement in Nov-13 $10.9 million sale of interest in PBD Developments 959 (239 ) 720 (65 ) All remaining $767 million 1 of non-retirement assets are in a sales process with most under negotiation or in due diligence 655 (259) FY12 1H13 FY13 Post FY13 Non-retirement Assets Available for Net debt reduced by $563m since June 2012 Sale Net Debt 1 Represents the book value of non-retirement assets at 30 June There is no guarantee that the sale of assets will realise proceeds equal to book value. 15

16 Aveo Group Outlook Australia s leading Retirement group Rename to Aveo Group, subject to securityholder approval at todays AGM Accelerate the retirement unit development pipeline with a target of delivering 200 new units per annum by FY16 Roll out care services to 75% of the portfolio in FY14 Streamline ownership of villages currently held in FKP, AEH and RVG Continue to divest non-retirement assets over the medium term, with a minimum target asset weighting of 80% retirement by FY16 Prudent capital management Proceeds of Entitlement Offer enable management to focus on operations and bring pro-forma gearing in line with listed retirement peers Proceeds from non-retirement asset sales to further reduce debt Terms agreed on a number of new facilities (Retirement Syndicate, Gasometer 1, The Milton) which will extend the existing debt maturity profile The Board have decided to reinstate the dividend/distribution payment and will determine the appropriate amount in June 2014 for FY14 1 Includes Retirement Villages Group development pipeline. 16

17 Securityholder Resolutions Aveo Peregian Springs Country Club Peregian Springs, QLD

18 Resolution 1 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 196,633,006 Against 1,224,739 Open 915,341 Abstain 9,230,809 18

19 Resolution 2 That Mr Walter McDonald, who retires by rotation in accordance with clause 10.3 of the Company s Constitution, is re-elected as a director. Proxies Received For 196,750,651 Against 1,107,360 Open 914,506 Abstain 9,231,378 19

20 Resolution 3 That Mr Eric Lee, who retires in accordance with clause 10.8 of the Company s Constitution, is re-elected as a director. Proxies Received For 196,587,437 Against 1,247,950 Open 934,903 Abstain 9,233,605 20

21 Resolution 4 That Mr Geoffrey Grady, who retires in accordance with clause 10.8 of the Company s Constitution, is re-elected as a director. Proxies Received For 194,007,858 Against 3,968,372 Open 939,571 Abstain 9,088,094 21

22 Resolution 5 That for the purposes of section 250R(2) of the Corporations Act 2001 and for all other purposes, the Remuneration Report for the year ended 30 June 2013 be adopted. Proxies Received For 106,374,959 Against 8,973,027 Open 859,248 Abstain 10,470,020 22

23 Resolution 6 That, with effect on and from the date that the Australian Securities and Investments Commission alters the details of the Company s registration in accordance with section 157 of the Corporations Act, the name of the Company is changed to Aveo Group Limited. Proxies Received For 196,406,614 Against 1,551,406 Open 923,611 Abstain 9,122,264 23

24 Resolution 7 That for the purpose of the Corporations Act, ASX Listing Rules and for all other purposes the issue of 352,564 Performance Rights to Geoffrey Grady in accordance with the FKP Property Group Performance Rights Plan, details of which are set out in the Explanatory Notes to this Notice of Meetings, be approved. Proxies Received For 187,800,906 Against 9,351,061 Open 478,936 Abstain 9,982,463 24

25 Questions Aveo Albany Creek Brisbane, QLD Aveo Oak Tree Hill

26 FKP Level 5, 99 Macquarie Street Sydney NSW 2000 T F Aveo Cherry Tree Grove Melbourne, VIC Disclaimer The content of this presentation is for general information only. Information in this presentation including, without limitat ion, any forward-looking statements or opinions (Information) may be subject to change without notice. To the maximum extent permitted by law, FKP Pr operty Group, its officers and employees do not make any representation or warranty, express or implied, as to the currency, accuracy, reliabil ity or completeness of the Information and disclaim all responsibility and liability for the Information (including, without limitation, liabilit y for negligence). All dollar values are in Australian dollars (A$) unless otherwise stated. 26