AUGUSTA CAPITAL LIMITED FY2017 ANNUAL RESULT BRIEFING. 30 May 2017

Transcription

1 FY2017 ANNUAL RESULT BRIEFING 30 May 2017

2 FY2017 ANNUAL RESULT BRIEFING Contents 1. HIGHLIGHTS 2. KEY EVENTS 3. ANNUAL RESULTS 4. FUNDS MANAGEMENT 5. LOOKING FORWARD 2

3 FY2017 ANNUAL RESULT BRIEFING - HIGHLIGHTS Adjusted funds from operations of $6.75m / up 19%, equating to operating earnings per share of 7.7 cents compared to 6.5 cents in FY16 NPAT of $7.75m, a decrease of 43% from FY16 related to lower re-valuation gains and disposal gains as directly-held investment portfolio assets continue to be divested. Total Assets Under Management of $1.6b, 9.5% growth on FY16 set to become $1.7b following settlement of 33 Broadway offering in June 2017 Five new syndications completed involving $203 million in new equity raisings to realise $347m in new deal asset values, involving continued expansion into Australia $5.60m recurring annualised base management fees - up 10% Net Asset Value per share of 98 cents, up from 94 cents in FY16 3

4 FY2017 ANNUAL RESULT BRIEFING - KEY EVENTS Value Add Fund No1 Quinns Hill (Aust) Graham St, Building A Graham St, Building B Silverdale land sold 33 Broadway Ashburton Central Sale of Finance Centre for $96.0m* 15m NPT shares acquired Metroclean sold Further 15.5m NPT shares acquired APR-16 MAY-16 JUN-16 JUL-16 AUG-16 SEP-16 OCT-16 NOV-16 DEC-16 JAN-17 FEB-17 MAR-17 APR-17 MAY-17 JUN-17 FY2017 FY2018 *On 25 July 2016, the sale of the Finance Centre properties for $96.0 million was approved as a special resolution at the special shareholder meeting held. The transaction will be staged with the four titles being sold at different dates through to April

5 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS 1. COMPREHENSIVE INCOME 2. ADJUSTED FUNDS FROM OPERATIONS (AFFO) 3. NET REVENUE 4. BALANCE SHEET TRANSFORMATION 5. LENDING 5

6 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS COMPREHENSIVE INCOME Net Revenue up $1.9m or 11% Net Profit Before Tax, Reval and One-Offs up $1.7m or 24% Total Comprehensive Income down $5.7m or 42% Corporate costs up $0.9m or 13% driven by funds management growth and LTIs. Cost to Net Revenue ratio of 42.6% (v 42.1% in FY16) Effective tax rate of 23% (v 21.5% in FY16) AFFO up $1.07m / 19% FY17 $m FY16 $m Var. % Gross Rental Income (10%) Funds Management % Investment Income % Metroclean (17%) Operating Costs (4.3) (4.8) 10% Net Revenue % Corporate Costs (8.1) (7.2) (13%) EBIT % Finance Costs (2.2) (2.9) 24% NP Before Tax, Reval & One-Offs % Other Adjustments (58%) Profit before tax (18%) Tax (2.0) (1.1) (81%) Profit for the Year (27%) Other Comprehensive Loss (2.1) - - Comprehensive Income (42%) Adjusted Funds From Operations % AFFO CPS % 6

7 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS ADJUSTED FUNDS FROM OPERATIONS FY17 $m FY16 $m AFFO up $1.07m / 19% Total Comprehensive Income Adjust For: (Gain) / Loss from sale of investment property 0.02 (0.96) F.V. (Gain) / Loss on investment property (4.12) (7.07) F.V. (Gain) / Loss on derivatives (0.55) 0.47 Non FFO deferred tax expenses - (0.42) F.V (Gain) / Loss on Investments (VAF and NPT) Transaction Disposal costs Derecognition of Intangible Assets Other unrealised or one-off items* Adjusted Funds From Operations (AFFO) Pay-Out Ratio 71% 77%

8 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS BALANCE SHEET Proforma May 2017* $m FY17 $m FY16 $m Current Assets Investment Property (Held For Sale) Investment Assets Intangible and Goodwill** Fixed Assets Total Assets Current Liabilities Borrowings Finance Centre Sale Dates Sale Date Sale Price $m Augusta House Jul Retail Title Apr Finance Centre Car Park Apr Finance Centre Podium Apr Other Liabilities Total Liabilities Equity *May 2017 Proforma reflects the further acquisition of NPT Shares and the $5m deposit for 33 Broadway as well as the required funding for the transactions. May 2017 dividend is also reflected. ** Intangibles and Goodwill reduced by $0.9m in FY17 primarily due to derecognition of intangibles as a result of the sale of some managed assets 8

9 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS BALANCE SHEET TRANSFORMATION Investment Property reduction due to divestment Finance Centre FY2016 $16.2m; 12% $5.2m; 4% FY2017 $15.6m; 12% 1H18 Expected Investment Assets include stakes in Value Add Fund, NPT Limited and underwrite commitments Funds Management Business reflects cost less derecognition of management contracts (sold properties) Includes further NPT investment (post-balance date) and investments in schemes or underwrite positions $106.8m; 78% $8.7m; 6% $15.5m; 11% $6.1m; 5% $63.3m; 51% $35.6m; 29% $93.3m; 69% $4.3m; 3% $15.5m; 13% Investment Property Investment Assets Funds Management Business Cash Other Assets Once Augusta House settles $3.0m; 2% $6.1m; 5% 9

10 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS NET REVENUE Strong growth in funds management initiatives management fees, transactional income and investment assets Deal fees (offeror and underwrite fees) were relatively flat year on year Directly Owned Investment Assets Underwriting Offeror Fees Funds Management Base Management Fees Transactional Income Discontinued Operations Cleaning ($'000) ($'000) ($'000) ($'000) ($'000) ($'000) ($'000) ($'000) Property Revenue 6,750 6,750 Management Fees 5,311 1,947 7,258 Offeror Fees 5,451 5,451 Underwriting Fees 1,425 1,425 Cleaning Services Income Operating Costs Recovered 1,295 1,295 Distribution Income Gross Revenue 8, ,425 5,451 5,311 1, ,317 Less Operating Expenses (1,955) (217) (1,555) (527) (4,254) Less Leasing Costs (19) (19) Net Revenue (FY17) 6, ,425 5,234 3,756 1,947 (47) 19,045 Total Net Revenue (FY16) 6, ,903 4,913 2,429 1, ,104 Net Revenue Growth YoY (492) 557 (478) 321 1, (57) 1,941 Net Revenue Growth YoY % (7%) 551% (25%) 7% 55% 85% (140%) 11% 10

11 FY2017 ANNUAL RESULT BRIEFING - FINANCIALS LENDING FY17 $m May 2017 $m Core Debt Broadway Deposit Total Since 31 March 2017 further debt has been drawn down for NPT share acquisition ($8M) and 33 Broadway deposit/establishment costs ($6m) Gearing of 26.6% (increasing to 33.5% in May 2017) $32.5m underwrite facility available for 33 Broadway offer $10m of debt will be repaid on the settlement of Augusta House A further $1m of facility remains undrawn (as at 30 May 2017) New funding structure under negotiation with ASB 11

12 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT 1. STRATEGY 2. PORTFOLIO 3. RECURRING MANAGEMENT FEES 4. PIPELINE 12

13 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT STRATEGY UPDATE 2016 What we said Market leading position in our core syndication market Further launch of more diverse range of investment products with both capital growth and cash yield characteristics Limited opportunities for growth in our direct property portfolio without substantial new capital, and favourable market conditions for diversifying our direct portfolio 2017 What we did Launch of our two largest property syndicates (Graham Street properties) strengthening leading position in the syndication market Further diversification in the launch of the 33 Broadway offer - the business model has evolved to be a part of the creation of these assets. Value Add Fund launched on 1 April 2016 Future exit of the Finance Centre unconditional sale deal across the entire Centre with a staggered exit Looking ahead Realising further opportunities to manage funds Launching additional funds with the potential to expand and diversify these types of offerings into niche and strong performing sectors of the economy. Ongoing, measured expansion into Australia Maintaining prudent capital management structures throughout Balance Sheet Transformation Working closely with the Bayleys to maintain optimal efficiency across the existing asset portfolio 13

14 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT PORTFOLIO (managed and directly owned) Portfolio size increased $222m / 15% FY18 Outlook ,456 1,678 1, Broadway development completion in early 2019 Further potential divestment of managed assets Augusta House (part of Finance Centre) settlement expected late June/early July FY18 outlook does not include any future management contracts secured *VAF assets of $109m were reported in the FY16 assets under management total of $1,456m **Reflects an assumption based on sales already contracted and historical trends 14

15 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT RECURRING BASE MANAGEMENT FEES Recurring Management Fees up $0.5m / 10% Apr-16 New Deals Other Growth Divestments* Apr-17 New deals include Graham St properties, Quinns Hill Road and Ashburton Central 33 Broadway will create a further $0.3m of recurring management fees in FY2018 In addition to recurring management fees of $5.6m, transactional income has performed strongly *Reflects an assumption based on sales already contracted and historical trends 15

16 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT FY2018 Pipeline 33 Broadway, Newmarket, Auckland Substantial Auckland office complex with ground floor retail is currently under construction As if complete valuation of $141.5m Offers investors a 7% per annum forecast pre-tax return from settlement Tenants - Mercury (12 year lease) and Tegel Foods Limited (10 year lease) $3.185m Total Deal Fees (Offeror and Underwrite) $0.2m Development Management Fees per annum (during development phase of 2 years) $0.3m Management Fees during development phase then $0.4m per annum once completed 16

17 FY2017 ANNUAL RESULT BRIEFING - FUNDS MANAGEMENT FY2018 Pipeline Nudgee Road, Brisbane Further expansion in Australia Modern industrial office and warehousing building WALE 11.4 years from settlement Purchase price of $28.25m Equity raise of $17.75m Offer to launch July

18 FY2017 ANNUAL RESULT BRIEFING LOOKING AHEAD Exit of Augusta House key priority NPT Limited proposal for NPT Board consideration 33 Broadway 30 June settlement Australia new offer to be launched early July 2017 New Fund Initiatives broaden the scope of our offerings 18

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20 DISCLAIMER Important Notice This presentation contains not only a review of operations, but may also contain some forward looking statements (including forecasts and projections) about Augusta Capital Limited (AUG) and the environment in which AUG operates. Because these statements are forward looking, AUG s actual results could differ materially. Please read this presentation in the wider context of material previously published by AUG and announced through NZX Limited. No representation, warranty or undertaking, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained, referred to or reflected in this presentation or supplied or communicated orally or in writing to you (or your advisers or associated persons) in connection with it, as to whether any forecasts or projections will be met, or as to whether any forward looking statements will prove correct. You will be responsible for forming your own opinions and conclusions on such matters. No person is under any obligation to update this presentation at any time after its release to you. To the maximum extent permitted by law, none of AUG, Augusta Funds Management Limited nor any of their directors, officers, employees or agents or any other person shall have any liability whatsoever to any person for any loss (including, without limitation, any liability arising from any fault or negligence on the part of AUG, Augusta Funds Management Limited, their directors, officers, employees or agents or any other person) arising from this presentation or any information contained, referred to or reflected in it or supplied or communicated orally or in writing to you (or your advisers or associated persons) in connection with it. Acceptance of this presentation constitutes acceptance of the terms set out above in this Important Notice. 20