Transcription of Finance News Network Interview with APN Property Group Limited (ASX:APD) Executive Director, Tim Slattery Carolyn Herbert: APN Property Group Limited
(ASX:APD) is a specialist real estate investment manager that actively manages real estate funds, on behalf of institutional and retail investors. Established in 1996, APN manages more than $2.2 billion of real estate and real estate securities.
I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s Executive Director, Tim Slattery. Tim, welcome to FNN.
Tim Slattery: Thanks for having me.
Carolyn Herbert: Can you start by giving us an introduction to APN Property Group?
Tim Slattery: APN’s a specialist real estate investment management company. We have a little over $2.2 billion in funds under management on behalf of a range of institutional and retail investors. The business has been in operation for about 20 years and we’re listed on the ASX, under the code APD.
Carolyn Herbert: Taking a look at your financials now. What were the highlights from your FY2015 results?
Tim Slattery: In FY2015, we managed to deliver an earnings per share of 5.58 cents. We also managed to increase our operating profits after tax by approximately 19 per cent to 3.05 cents per share, and delivered some significant funds under management growth.
Carolyn Herbert: What about the final dividend and total dividend for the year?
Tim Slattery: We paid a final dividend of 0.25 cents, an interim dividend of 1.25 cents. So an aggregate 1.5 cents fully franked for the year.
Carolyn Herbert: What about the company’s debt levels, how have they changed?
Tim Slattery: Over the year there wasn’t a significant movement. We still operate the company as at 30 June with no debt, at that balance date.
Carolyn Herbert: Now to the businesses, starting with the Securities division, how’s it performing?
Tim Slattery: The Security division’s performing strongly. We’ve had another good year in terms of investment performance for our clients, and we’ve also seen continued strong inflows into the Funds. Our inflows for the year on a net basis for about $143 million and the flagship Fund, the APN AREIT Fund, has continued to deliver strong income based investment performance. So we think that business continues to be very well placed, offering investors a high level of liquidity as well as a sustainable cash income yield from its underlying portfolio of REITs.
Carolyn Herbert: Now to your Healthcare and Industrial REITs. How are they performing and what size are you looking to grow the Funds, over the next 12 months?
Tim Slattery: Our Healthcare REIT, Generation Healthcare REIT reported another solid period of underlying earnings growth. It’s now trading at a significant premium to its NTA. The Fund has a real focus on any transactions that looks at are really assessed about whether they’re in the best interests of investors. That said, it does have a number of significant growth projects within its portfolio, particularly the Frankston Private Hospital and also out at Casey. So we think that Fund’s well positioned for further growth in earnings for its investors.
Industria REIT reported a significant increase in its NTA, to $2.02 per security and delivered distributions for the full year of 16.2 cents. So we believe Industria over the medium term remains very well placed, to deliver some attractive returns for its investors.
Carolyn Herbert: How is the Direct Funds division performing?
Tim Slattery: The Direct Funds, really this business was launched a few years ago. And again, we’ve had another good performance in that division over the course of the year. Significantly, we agreed terms to sell the Auburn asset, which is in our latest Real Estate Private Equity Fund. And the expected return there is about 56 per cent for the investors, in about 12 months. So that outcome, we think, positions that business very strongly for its future growth.
Carolyn Herbert: Finally Tim. What’s your outlook for FY2016 and your focus for the year ahead?
Tim Slattery: In 2016 we remain very bullish on Australia as a country, it’s a great place to live. But we do feel that the economy is under a significant amount of pressure. We don’t expect a lot of growth, we don’t expect much inflation and we think the interest rate outlook is fairly benign. So we think that’s good for property.
Our products, which are really based on a property for income type of investment philosophy, are well placed for the current group of investors that are looking for income based products, and sustainable cash yield. So we’re optimistic on the outlook and we think the business is well placed to deliver attractive returns, for our shareholders.
Carolyn Herbert: Tim, thanks for the update on APN Property Group.
Tim Slattery: Thanks for having me Carolyn.
Ends
