Centuria Capital Group 1H18 Results | ASX:CNI | 15 February 2018 - PowerPoint PPT Presentation

Centuria Capital Group 1H18 Results | ASX:CNI | 15 February 2018

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 1 2 3 4 5 6 Overview 1H18 Financial Property Funds Investment Outlook Appendices & Highlights Results Management Bonds 1H18 Results

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Section 1 Overview & Highlights

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Highlights for 1H18 – Operating NPAT of $30.2 million Operating Earnings – Reaffirm FY18 earnings per stapled security guidance of 15.8 – 16.2 cps – Recurring revenue grew to $32.1 million, up $18.9 million – $25.8 million net performance fee before tax on 10 Spring Street, Sydney NSW – Interim distribution of 4.1 cps Distributions – Reaffirm FY18 distribution guidance of 8.2 cps Total – CNI securityholders 19% 1,2 (51% 1 for the 2017 calendar year) Returns – 12.7% p.a. total return on co-investments – 19% increase in AUM to $4.6 billion 3 1H18 AUM Growth – $655 million in property acquisitions 3 and $115 million in asset revaluations – Investment bonds AUM growth to $0.9 billion – $98.6 million equity raised in 1H18 Capital Management – Issued $25 million in corporate bonds 4 – 13% operating gearing ratio 5 1. Past performance is not indicative of future performance. See Appendix on P34 for further important information on the calculation of total return figures 2. From 1 July 2017 to 31 December 2017 3. Includes post 31 December 2017 acquisitions 4. See page 10 for further information on corporate bonds 5. Gearing ratio is calculated based on (Operating Borrowings less cash) divided by (Operating Total Assets less cash) PAGE 5 PAGE 5 PAGE 5

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Operating Highlights Operating earnings growth supports distributions Operating net profit after tax Distribution per stapled security 35.0 ($m) 9 (cents per stapled security) 8.20 8 30.2 30.0 7.50 7 25.0 6 12.1 5.25 20.0 5 4.75 15.5 4 15.0 4.10 11.3 3 2.75 10.0 2 6.3 5.9 5.0 1 0 0 FY14 FY15 FY16 FY17 1H18 FY14 FY15 FY16 FY17 FY18 Full year 1H18 Full year 1H18 FY18 guidance PAGE 6

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Operating Highlights $0.8 billion 1 of organic AUM growth over 1H18 – Ten A-grade properties acquired, adding $655 million 1 AUM Assets under management ($ million) 4,583 – $115 million in revaluations – Investor demand strong across distribution channels: 1,075 3,851 > Listed property AUM grew to $2.0 billion > Diversified property fund on seven investment and superannuation adviser platforms 23% CAGR 921 958 – Investment Bonds AUM growth of $54 million (7%) 629 407 382 1,919 1,636 1,591 416 104 1,291 128 323 1,119 113 818 655 440 CIP CMA Unlisted Wholesale 799 853 714 715 720 Unlisted Retail Investment Bonds FY14 FY15 FY16 FY17 1H18 1 1. Includes post 31 December 2017 acquisitions PAGE 7

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Section 2 1H18 Financial Results

CENTURIA CAPITAL GROUP I 1H18 RESULTS Group Financial Highlights Delivering strong investor returns Operating earnings per stapled security 18 (cents per stapled security) 16.0 1 15 14.8 1H18 1H17 12 Operating NPAT $m 30.2 2.9 10.3 12.1 9 Operating EPS cps 12.1 3.8 8.1 7.6 6 Statutory NPAT $m 36.3 (1.4) 3 Statutory EPS cps 13.4 (1.6) 0 Distribution per stapled security cps 4.1 2.3 FY14 FY15 FY16 FY17 FY18 Full year 1H18 FY18 guidance Platform acquisition on 9 January 2017 significantly transformed Distribution per stapled security nature and scale of recurring earnings 9 (cents per stapled security) 8 – Recurring revenue streams up $18.9 million 7 3.60 – 10 Spring Street after tax net performance fee of $18.1 million 6 – Distribution per stapled security up 78% 5 5.25 4 4.75 2.40 3.90 3 2 2.75 1 1.70 0 FY14 FY15 FY16 FY17 1H18 Dividend (fully franked) Trust distribution 1. Midpoint of FY18 operating EPS guidance of 15.8-16.2 cps PAGE 9

CENTURIA CAPITAL GROUP I 1H18 RESULTS Operating Segment Results Continued growth in operating results Operating profit by segment 1H18 ($m) 1H17 ($m) 166% increase in Property Funds Management 1 Property Funds Management 1 10.9 4.1 – Performance fees 25.8 0.2 20% increase in Investment Bonds Management Investment Bonds Management 2.4 2.0 Co-investment earnings up on $277 million of investments Co-investments 9.4 0.6 Reverse mortgages 0.1 (0.0) Corporate (4.4) (3.2) Operating profit before interest and tax 44.3 3.7 Increased finance costs due to $125 million Corporate Bonds Corporate finance costs (4.3) (0.5) Operating profit before tax 40.0 3.2 Operating tax expense (9.8) (0.3) Operating profit after tax 30.2 2.9 Operating EPS (cents per stapled security) 12.1 3.8 1. Excluding performance fees PAGE 10

CENTURIA CAPITAL GROUP I 1H18 RESULTS Debt and Capital Management Strong support from capital markets 31 Dec 2017 30 Jun 2017 Operating balance sheet ($’000) ($’000) Assets – $98.6 million equity raised Cash and cash equivalents 67,025 55,734 – $25 million corporate bonds issued Receivables 12,187 13,342 – Operating gearing ratio 1 of 13% Financial assets 332,416 197,540 – Operating interest cover ratio 2 of 8.9 times Other assets 1,459 1,551 – Corporate Bonds mature in 3.3 years Intangible assets 157,663 157,663 – Operating net assets per stapled security of $1.25 3 Total assets 570,750 425,830 ($1.16 3 at 30 June 2017) Liabilities Payables 21,704 23,823 Liability to 360 Capital Group 7,998 7,938 Provisions 1,479 1,301 Borrowings 134,254 107,266 Interest rate swap at fair value 20,262 18,190 Provision for income tax 4,053 2,784 Deferred tax liability (951) (2,321) Total liabilities 188,799 158,981 Net assets 381,951 266,849 1. Gearing ratio is calculated based on (Operating Borrowings less cash) divided by (Operating Total Assets less cash) 2. Operating interest cover ratio is calculated based on operating finance costs divided by operating profit before tax excluding finance costs (excluding reverse mortgages) 3. Number of securities on issue at 31 December 2017: 304,793,174 (at 30 June 2017: 229,815,736) PAGE 11

CENTURIA CAPITAL GROUP I 1H18 RESULTS Co-investments Supporting predictable recurring revenues – Increase in size and scale of co-investments portfolio Carrying Revenue value contribution to $277 million (83% increase on 30 June 2017) 31 Dec 17 1H18 – Stable source of recurring revenue, contributing Co-investments $0.3b ($m) ($m) $9.2 million for 1H18 Centuria Industrial REIT (CIP) 123 4.0 – Annualised total return of 12.7% 1 Centuria Metropolitan REIT (CMA) 66 2.1 Propertylink Group (PLG) 56 2.0 Unlisted Property and Debt Funds 32 1.1 Total 277 9.2 Capital Growth 3.3 Total Revenue 12.5 Annualised Total Return 1 12.7% 1. Calculated based on total revenue divided by weighted average carrying value of investments for the half year ended 31 December 2017, and excludes finance costs PAGE 12

CENTURIA CAPITAL GROUP I 1H18 RESULTS Sources of Operating Revenue Increased recurring revenue Sources of operating revenue 100 ($m) Continued upward trend in 10 Spring Street Fund 90 performance fee in recurring revenue 1H18 80 70 60 Co-investments provide an 50 increased source of recurring income 40 Transactional revenue Belmont Rd Performance Fees 30 Property Transaction Fees Continued underlying 20 growth in Recurring revenue property funds Co-Investment Income 10 management fees Investment Bonds Management Fees Other Revenue Property Funds Management Fees 0 FY15 FY16 FY18 forecast PAGE 13 FY17

CENTURIA CAPITAL GROUP I 1H18 RESULTS I ASX:CNI I 15 FEBRUARY 2018 Section 3 Property Funds Management

CENTURIA CAPITAL GROUP I 1H18 RESULTS Property Funds Management Unlisted Property Funds Listed Property Funds $ 1 .7 17 $ 28 m $ 2.0 b 41 17 b AUM 1 Unlisted AUM in AUM 3 Industrial Office fixed term funds 1 Centuria Diversified assets assets Property Fund – Market leader with a 20 year track record in fixed-term – Centuria Metropolitan REIT (CMA), Australia’s largest unlisted property funds ASX-listed metropolitan office REIT – 37 completed funds to date – Centuria Industrial REIT (CIP), Australia’s largest ASX-listed income-focused industrial REIT – Achieved six funds in Property Council/IPD Unlisted Core Retail Property Funds top ten index 2 – Both CMA and CIP are now included in the S&P/ASX 300 Index > Including top three funds in Q4 2017 index 2 1. Includes post 31 December 2017 acquisitions 2. Property Council/IPD Unlisted Core Retail Property Funds Q3 2017 and Q4 2017 indexes PAGE 15 3. Includes 2 Kendall Street, Williams Landing, VIC, as if complete