Centuria Capital talks FY2015 results

Interviews

Transcription of Finance News Network Interview with Centuria Capital Limited (ASX:CNI) Group CEO, John McBain
 
 
Carolyn Herbert: Centuria Capital Limited (ASX:CNI) is an ASX listed diversified funds manager with $1.6 billion in funds under management. I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s Group CEO, John McBain. John welcome to FNN.
 
John McBain: Thank you for having me Carolyn.
 
Carolyn Herbert: Can you start by giving us an introduction to Centuria Capital?
 
John McBain: Centuria Capital, ticker is CNI, we were listed on the ASX in 2002. We’re a specialist investment manager and we have two core divisions, Property Funds Management and Investment Bonds Management.
 
Carolyn Herbert: The Company has released its full year results for FY2015. What were the highlights?
 
John McBain: We had a pretty exciting year for FY2015. We released a lot of capital and sold two non-core divisions, which has enabled us to focus back on those core divisions. Pretty good results for the year; around about a 6.5 per cent increase in underlying NPAT and a very healthy increase in dividend.
 
Carolyn Herbert: What was the full year dividend and the total shareholder return for FY2015?
 
John McBain: So we released a 4.75 cent per security fully franked dividend, which was up from 2.75 cents the previous period. Fully franked as I said, which left a total shareholder returns in the FY15 period of just under 23 per cent.
 
Carolyn Herbert: Now to the Property Funds Management business. How much do you have under management and how much is listed?
 
John McBain: Currently we’re settling the acquisition of an $86 million acquisition in St Leonards Sydney. It will give us a total Property Funds Management of $1 billion, of which $375 million sits in our listed vehicle.
 
Carolyn Herbert: What’s the mix and where are they located?
 
John McBain: In the listed portfolio they’re 80 per cent office and 20 per cent industrial. And they’re located throughout New South Wales, ACT, Queensland and South Australia.
 
Carolyn Herbert: Now to the unlisted portfolio. What’s the size and what transactions have you undertaken?
 
John McBain: So post the transaction we just discussed, unlisted will comprise about $630 million of the $1 billion portfolio. And the average size of transactions in the $40 million to $100 million range. Recent transactions would include the completion of the $220 million Channel Seven headquarters at Eveleigh in Sydney, which was massively oversubscribed. But we have several other transactions, which Sydney viewers would recognise, including 10 Spring Street for $91 million, 175 Castlereagh Street for $58 million and many, many others.

Carolyn Herbert: What’s the strategy with the unlisted property portfolio?
 
John McBain: I think we will continue to focus equally on listed and unlisted Property Funds Management. The unlisted Property Funds Management has got a pretty deep 20-year history. So a lot of property resource and skill we can bring to bear on acquisitions and disposals, and make some excellent profits for our investor base. It’s got a very loyal investor base, as I said jotted up over 20 years.
 
So we have the luxury of being able to distribute the equity and gain the equity, more easily than a lot of other groups. The listed Property Fund commenced in 2014 and its really only had a year to grow. And I think you’ll see it’s got excellent leadership and I think you’ll see that grow strongly.
 
Carolyn Herbert: Now to Investment Bonds business. Can you tell us about the bonds offering, the size of the portfolio and the strategy there?
 
John McBain: The Investment Bond business was born out of the original Friendly Society business that was the base vehicle for the whole listing, before property became part of it. Investment Bond size at the moment is just over $700 million and we’re anticipating funds under management to grow quite strongly this year. We just recruited an excellent head of the Investment Bond division, Neil Rogan, an ex-AMP head of marketing and campaigns and he’s got quite a clear strategy to grow the funds under management.
 
Carolyn Herbert: Finally John. What’s your outlook for FY2016 and where are you hoping the company is going to be 12 months from now?
 
John McBain: I think you’ll see more of the same, a very strong performance from the Property Funds Management unit. So both from the existing unlisted unit, which we know has got a lot of acquisitions in its pipeline, and also acquisition and disposal fees that we’ve already pretty well taken into account. Secondly, you’ll see the listed Property Funds Management unit start to really grow in size. And rather than the fluctuations we get sometimes with our unlisted business, as we take opportunities to take the profits for our investors, you’ll see the funds of the listed business just grow steadily.
 
On the Investment Bond side, we’re very excited because its total fund management has remained the same, for the past two or three periods. But now with talk of change to Superannuation, it’s probably the only Government tax incentivised long-term savings vehicle left in the country. We’ve got the right guy growing the division and you’ll see that division go into growth. And I think you’ll get, our belief is you’ll get quite a lot of the market, looking quite closely at that.
 
And finally, the dividend side of the story, both the Board and senior management as well recorded in the market; we see our obligation to return strong, growing and reliable dividends, fully franked dividends, to our shareholders. Probably more than most companies our size.
 
Carolyn Herbert: John, thanks for the update on Centuria Capital.
 
John McBain: Thanks for having me.
 
 
Ends

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