FY2011 Financial Results David Blight 29 August 2011 Results - - PowerPoint PPT Presentation

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FY2011 Financial Results David Blight 29 August 2011 Results - - PowerPoint PPT Presentation

Jan 27, 2023 394 likes •633 views

FY2011 Financial Results David Blight 29 August 2011 Results highlights Backdrop: continuation of tough financial market conditions Operating profit after tax of $3.0 million Solid progress on key issues: Europe, property for income

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FY2011 Financial Results

David Blight

29 August 2011

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  • Backdrop: continuation of tough financial market conditions
  • Operating profit after tax of $3.0 million
  • Solid progress on key issues: Europe, property for income funds
  • Successful IHF acquisition (settled August 2011), AREIT Fund growth
  • Platform strong
  • Actively pursuing new opportunities

Results highlights

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Summary FY2011 financial results

FY2011 $000s FY2010 $000s Change Revenue total 20,970 19,987 ▲ 4.9% Operating profit after tax1 3,044 2,010 ▲ 51.4% Statutory profit / (loss) after tax (5,297) (5,224) ▼ 1.4% Operating EPS2 2.00 cents 1.44 cents ▲ 38.9% Statutory EPS (3.88) cents (4.48) cents ▲ 13.4% Dividends (per share) 1.25 cents 1.25 cents – Funds under management (FUM) 3 $2.253 billion $2.496 billion ▼ 9.7%

Notes

  • 1. Refer appendices for reconciliation of operating profit to statutory (IFRS) profit
  • 2. Basic earnings per share based on operating profit after tax

3. Closing figures as at 30 June in relevant year

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Summary FY2011 financial results – balance sheet

Balance sheet sound with $15.4 million in cash and no debt2

Notes

  • 1. Liabilities – includes trade and other payables and provisions
  • 2. Cash reduced by $3.6 million post June 2011 balance date due to completion of IHF management rights transaction
  • 3. APN share price information as at market close 30 June 2011 (Source: Bloomberg)

June 2011 $000s June 2010 $000s Change Tangible Assets 38,056 32,626 ▲16.6% Intangible Assets 227 7,203 ▼96.8% Total Assets 38,283 39,829 ▼3.9% Liabilities1 6,778 5,819 ▲16.5% Net Tangible Assets (NTA) 31,278 26,807 ▲16.7% NTA per share (cents) 19.6 19.2 ▲2.1%

Cash Cash 24.0 (0.1) (4.2) 19.6 17.0

  • 5.0

10.0 15.0 20.0 25.0 30.0

Total Assets Intangible Assets Liabilities Net Tangible Assets Share Price³

A$ cents per share

Net tangible asset backing per share June 2011

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Funds under management

FUM stabilising – securities funds inflows helping to offset EU reduction

Notes

  • 1. 30 June 2011 plus IHF - management rights acquired August 2011
  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Jun 2011 (inc. IHF)¹ $ million Listed Funds Private Funds Real Estate Securities Direct Funds Europe

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Group business structure

Private Funds Direct Funds Australia APN Property Group Limited

FUM $2,452m1 18 funds

  • Fixed term
  • Institutional / industry

fund investors

  • Australian

developments

  • FUM $153m
  • 2 funds
  • Open ended
  • Retail investors
  • Australian funds
  • FUM $991m
  • 6 funds
  • Fixed term
  • Institutional and retail

investors

  • FUM $412m
  • 3 funds
  • Open ended and fixed

term funds

  • Institutional and retail

investors FUM $673m

  • 5 funds
  • Open ended
  • Institutional / high net

worth investors

  • FUM $24m
  • 1 fund

Listed Funds Growth engines Asia Europe Real Estate Securities

  • Open ended
  • Institutional and retail

investors

  • FUM $199m
  • 1 fund

Notes 1. Includes IHF – management rights acquired August 2011

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Real Estate Securities – Australia

APN AREIT Fund

$6.6m

APN Property for Income Fund

$581.8m

APN AREIT Fund

  • Net inflows $94 million for FY11
  • Net inflows since inception (January

2009) in excess of $150 million

  • Performance since inception 17.0% pa

(versus index of 7.7% pa)1

  • Low volatility of returns relative to index
  • 100% liquid
  • Currently yielding 8.8% pa2
  • Highly rated by researchers

APN Property for Income Funds

  • Re-opened for applications
  • Limited liquidity option (Managed

Redemption Offer) introduced in December 2010

  • Steady progress toward longer term

liquidity solution Other funds

  • Funds terminated
  • Returning capital to investors

8.2 7.3 7.2

  • 3.0

6.0 9.0 Jun 09 Jun 10 Jun 11 $ million

Annuity Style Revenue

566 237 153 35 200 400 600 PFIF PFIF2 AREIT Other $million

June 2011 FUM breakdown by fund

Notes 1. To 30 June 2011 2. Based on 30 June 2011 unit price of $1.1796 versus distribution rate on an annualised basis 1,675 903 938 991 500 1000 1500 2000 Jun 08 Jun 09 Jun 10 Jun 11 $ million

FUM

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Real Estate Securities – Asia

APN AREIT Fund

$6.6m

APN Property for Income Fund

$581.8m

  • ARA Asian Asset Income Fund
  • Acquired by APN in August 2010
  • Institutional / High Net Worth product
  • Total return of 20.3% for the year to June

2011

  • 100% liquid
  • Currently yielding 13% pa
  • FUM steady since acquisition
  • Targeting new investors in FY2012
  • Full time team of 4 personnel
  • Singapore office established
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Direct Real Estate Funds

572 455 445 412 200 400 600 800 Jun 08 Jun 09 Jun 10 Jun 11 $ million

FUM

2.0 1.8 2.4

  • 1.0

2.0 3.0 Jun 09 Jun 10 Jun 11 $ million

Annuity Style Revenue

APN National Storage Property Trust

  • Debt refinanced with NAB and Gresham
  • Deed of Cooperation with tenant to

facilitate refinance

  • Distributions recommenced at 0.50 cpu

per quarter

  • Valuations stabilised

APN Property Plus Portfolio

  • Long term leases to Woolworths and 7-

Eleven

  • FY11 distribution yield on original

investment 9.00% pa APN Retirement Properties Fund

  • Portfolio sold to Lend Lease in March

2011

  • Total return since inception (June 1999)
  • f 13.1% pa

APN Regional Property Fund

  • Valuations stabilised
  • $250,000 amortised per quarter from

earnings

  • Strategic options under review

271 84 57 100 200 300 National Storage Property Trust Property Plus Portfolio Regional Property Fund $ million

June 2011 FUM breakdown by fund

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Private Funds

127 158 159 153 50 100 150 200 Jun 08 Jun 09 Jun 10 Jun 11 $ million

FUM (Equity)

4.8 2.8 2.4

  • 2.0

4.0 6.0 Jun 09 Jun 10 Jun 11 $ million

Annuity Style Revenue

99 54 50 100 150 Development Fund No 1 Development Fund No 2 $ million

June 2011 FUM breakdown by fund

APN Development Fund No 1

  • Fully invested
  • Australian institutional investors
  • 567 Collins Street, (joint venture with Leighton

Properties) a prime vacant development site in the Melbourne CBD with approval for 55,000m² office development

  • The Capitol, South Yarra (joint venture) a prime

mixed use development site on the corner of Toorak Road and Chapel Street, Melbourne

  • Graystone Group: a property development and

investment company, specialising in business technology park developments in Queensland APN Development Fund No 2

  • Fully invested
  • Australian institutional investors
  • 150 Collins Street, Melbourne: a prime commercial

development site in Melbourne CBD with approval for a 20,000m² office development

  • Industry Village, Port Melbourne: a 3.3ha site

located less than 2km from the Melbourne CBD, being subdivided and redeveloped as light industrial and office

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European Real Estate Funds

APN European Retail Property Group (AEZ)

  • Debt restructure and asset sale program

announced March 2011 to run until November 2012

  • Partial fee deferral, full cost recovery remuneration

basis APN Vienna Retail Fund

  • Shopping Centre Nord continuing to perform

robustly

  • Fund expiry October 2013
  • Recommenced distributions

APN Poland Retail Fund

  • Manhattan Shopping Centre showing improved

trading performance

  • Fund expiry December 2011. Fund extension to
  • ptimise asset sale prospects under consideration

APN Champion Retail Fund

  • Carrefour supermarket portfolio continuing to

perform relatively well

  • Greek market very challenging
  • Fund expiry October 2013

Notes 1. Euro Property Fund not shown in FUM breakdown (excluded as cross-investment into European syndicates) 1,535 1,308 954 673 500 1000 1500 2000 Jun 08 Jun 09 Jun 10 Jun 11 $ million

FUM

400 139 42 92 200 400 600 AEZ Vienna Poland Champion $ million

June 2011 FuM breakdown by fund

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  • APN appointed responsible entity of the ING Real Estate

Healthcare Fund on 12 August 2011

  • Only listed Australian healthcare fund
  • $199 in assets under management
  • Occupancy (by income) 98.8%
  • WALE 11.6 years
  • Management team joined APN with significant co-investment

in the management vehicle

  • Attractive sector prospects:
  • Ageing population growing
  • Technology driving more health solutions
  • Healthcare industry continuing to experience significant

growth

  • Government support direct and indirect
  • High quality tenant universe
  • Attractive lease structures

New healthcare real estate platform

Key stats

AREIT listed on ASX under code IHF $186 million in property assets in Victoria and Queensland Occupancy (by income) 98.8% WALE 11.6 years Distribution yield of 8.0% pa1 100% tax deferred (for 30 June 2011 distribution)

Notes 1. Calculated as IHF security price of $0.81 at close of trading on 30 June 2011 versus 30 June 2011 half year distribution, annualised

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  • Net inflows $94 million for FY11
  • Net inflows since inception (January 2009) in excess of $150

million

  • Performance since inception 17.0% pa (versus index of 7.7% pa)1
  • Low volatility of returns relative to index
  • 100% liquid
  • Currently yielding 8.8% pa2
  • Highly rated by researchers

APN AREIT Fund

1391 1120 750 1000 1250 1500 1750 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Value of $1000 invested at fund start date

APN AREIT Fund Total Return vs Index APN AREIT Fund ASX 200 LPT Accumulation Index

Source: APN Funds Management Limited/ IRESS

Notes 1. To 30 June 2011 2. Based on 30 June 2011 unit price of $1.1796 versus distribution rate on an annualised basis

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  • Established June 1999 raising $18.2 million to

acquire 5 retirement villages from PrimeLife for $25.9 million

  • Properties sold back to operator (Lend Lease) at

$36.0 million settled March 2011

  • Performance:
  • Initial yield (FY2000) 9.45% pa
  • Average annualised yield from 1 June 1999 to

31 March 2011 11.7% pa

  • Total return since inception (June 1999) of

13.1% pa

  • All funds returned to investors by May 2011 and

fund has been wound up and de-registered.

  • Positive investor feedback

APN Retirement Properties Fund

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FY11 Scorecard

Stated objective HY2011 Results Performance

Stabilisation of European business

Debt restructure and asset sale program agreed for AEZ Determine the future for smaller unlisted funds

Significant rationalisation being finalised (IPIF, Diversified, Direct, Retirement Funds) M&A opportunities

IHF acquisition completed Continue to grow AREIT and PFIF products - increase retail market share

AREIT fund grown significantly, real estate securities inflows have market-leading position Grow real estate private funds and real estate securities funds capabilities

Additional resources added to position businesses for further growth Continued, intense focus on investment performance and service

Service and performance metrics across business remain very solid Expand real estate securities capabilities in Asia and leverage the strategic partnership with ARA

Singapore office established, additional resources engaged, John Lim (ARA CEO) joined APN board

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Market environment

  • Sovereign and banking risk in Europe and US
  • Sentiment/confidence remains fragile
  • China growth slowing but still strong
  • Significant financial market volatility

Locally....

  • Australia holding up OK, thanks to strong commodity prices
  • Consumer confidence low
  • House prices softening
  • Interest rates likely to reduce
  • Many investors still cautious, long cash
  • High yielding ‘hard’ assets likely to become popular in near term
  • Very good long term buying opportunities beginning to emerge in real estate markets
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Strategy

Asia Pacific Product focus M&A

  • Continued focus on three key product

types (retail, institutional and high net worth investors):

  • Real estate securities
  • Private real estate funds and clubs
  • Listed real estate funds
  • Focus on corporate M&A
  • pportunities following GFC

shakeout – economies of scale

  • The operating platform has

been kept well resourced through the GFC – additional businesses will be significantly accretive

  • Continue to leverage strong

relationship with ARA Asset Management and Cheung Kong Group in Asia

  • Focus on the Asia-Pacific region.

Operations in Europe will continued to be managed to the scheduled end dates of European funds

APN’s competitive advantage

Investment management Investment track record People Governance Specialist

Focussed on real estate investment management. Not distracted by other asset classes Strong 15 year performance history Extensive global, regional and local experience gained over several cycles Independent directors and separate

  • boards. Rigorous standards

Highly disciplined investment approach

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  • Business model
  • ‘Pure’ external manager
  • Alignment through significant co-investment
  • Sole focus on real estate investment management
  • Recruit and retain the best professionals in the industry
  • Australian real estate investment management market expected to grow significantly over

the next decade

  • Competition remains tough however industry rationalisation is underway – opportunities for

established managers with strong financials, governance and performance

  • Case for real estate investment in the current environment is emerging:
  • hard assets
  • adjusted capital structures
  • attractive yields relative to cash
  • security of cash flow via lease contracts

Strategy (continued)

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  • Key priorities in FY2012
  • Finalise permanent redemption structure for property for income funds
  • Scale up Asian platform
  • Complete rationalisation of smaller funds
  • Capitalise on growth options in private funds business
  • M&A opportunities
  • Superior investment performance and outstanding service remain at the top of our

agenda

Priorities

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FY2011 $000s FY2010 $000s Revenue Management and recurring fees 18,750 19,900 Transaction and performance fees 647 − Other revenue 1,573 87 Revenue Total 20,970 19,987 Direct costs (2,117) (1,913) Administrative expenses (15,216) (16,019) FX gains – realised/unrealised 119 111 EBITDA 3,756 2,166 Finance income (net) 856 1,223 Depreciation and amortisation (257) (320) Income tax expense (1,311) (1,059) Operating profit after tax 3,044 2,010 (Loss) from impairment, fair value adjustments and business acquisition costs, after tax (8,341) (7,234) Statutory (loss) after tax (5,297) (5,224)

Appendix 1 – Detailed profit and loss statement

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Appendix 2 – Reconciliation of operating profit to cash flow

3,044 949 3,993 4,561 (1,996) (849) 1,574 (501) 6,782 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Operating profit after tax Add back non- cash items Adjusted

  • perating profit

after tax Proceeds from issue of shares Payment of dividends Cash flow from Net Investments / Capex Tax refund from tax authorities and interest income Other movements Movement in cash for the year $000s

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Contact details

David Blight Group Managing Director Ph: (03) 8656 1000 david.blight@apngroup.com.au APN Property Group Level 30, 101 Collins Street Melbourne VIC 3000 www.apngroup.com.au John Freemantle Chief Financial Officer Ph: (03) 8656 1000  jfreemantle@apngroup.com.au