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RESEARCH NOTE
BUY
1.91 2.03 13.6 BBG: GOZ AU 212.8 50.0 406.4 399.9 123.4 0.05 2.04/1.67 1.14
Valuation:
Methodology Value per share A$ NAV 2.03
Year End June 30 Reported NPAT ($m) Recurrent NPAT ($m) Recurrent EPU (cents) EPU Growth (%) PER (x) EBITDA ($m) EV/EBITDA (x) Free Cashflow FCFPS (cents) PFCF (x) DPS (cents) Yield (%)
2009A (210.1) 14.9 43.1 (18.4) 4.4 61.6 9.2 18.7 54.1 3.5 32.5 17.0
2010A 46.7 22.5 16.6 (61.5) 11.5 65.4 10.1 22.4 16.6 11.5 14.0 7.3
2011F 43.5 34.5 17.3 4.2 11.0 81.1 11.0 36.7 18.4 10.4 17.1 9.0
2012F 38.4 38.4 18.1 4.5 10.6 80.7 11.4 37.6 17.7 10.8 18.1 9.5
2013F 12 Month Share Price Performance 40.5 40.5 19.0 5.4 10.0 82.8 11.1 39.7 18.7 10.2 19.0 10.0
$2.50 $2.00 Share Price ($) $1.50 $1.00 $0.50 $0.00 12 Months
16 14 12 10 8 6 4 2 0
Volume (million)
1
Performance %
Absolute Rel. S&P/ASX 300
RESEARCH NOTE PATERSONS SECURITIES LIMITED
1mth
-3.1 -5.6
3mth
-1.0 -0.7
12mth
12.6 15.0
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
Highlights
Solid result and in-line
GOZ reported an underlying NPAT of $15.8m for FY10, 80% higher than the previous year. This was in line with our estimates and the result of the acquisitions made during the period. Like-for-Like rental growth was 1.9%. Adjusted EPS was up +63% and DPS was up +53%. The current payout ratio is 100%. While these numbers are quite large, they are generally a product of the restructuring that occurred in GOZ in 1H10 and which led to a very low eps number in that period.
Guidance
Directors reaffirm guidance of 17.1c DPS for FY11.
Figure 1: Performance
$millions NOI Growth NPAT Reported NPAT Adjusted EPS Adjusted Weighted average no. shares DPS
Source: Patersons
Change
53%
Source: GOZ
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
Source: Patersons
Source: GOZ
Source: GOZ
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
Source: Patersons
Source: Patersons
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
Growthpoint Properties Australia (GOZ) Cash Flow ($m) 2010A 2011A Operating Cashflow 22.6 37.5 Capex -0.1 -0.8 Disposals 0.0 13.2 Acquisitions -85.4 -232.5 Other 0.0 0.0 Investing Cashflow -85.5 -220.1 Equity Raised 183.1 99.8 Increase (Repay) Debt -99.0 129.8 Distributions Paid -11.4 -31.4 Other 0.0 0.0 Financing Cashflow 72.7 198.1 Net change in Cash Held 9.7 15.6 Closing Cash Balance 16.7 32.3 Op CF/Dividend (%) 50.3 83.8 Dividends (Cents) 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 FY08 Valuation NAV Current Cap rate Assumed Cap rate FY09 FY10 FY11
2012A 38.4 -0.8 0.0 0.0 0.0 -0.8 0.0 0.0 -37.7 0.0 -37.7 -0.1 32.3 98.2
$1.91 2013A 40.5 -0.8 0.0 0.0 0.0 -0.8 0.0 0.0 -39.5 0.0 -39.5 0.2 32.5 97.5
Profit & Loss ($m) Property NOI Other Income Expenses EBITDA Depn & Ammort EBIT Net Interest Asset Sales Unrealised gains Profit Before Tax Tax expense Minority Interests NPAT (Reported) NPAT (Adjusted) Balance Sheet ($m) Assets Cash Receivables Investment Properties Other Investments Associates Derivatives Other Assets Total Assets Liabilities Interest Bearing Liabilities Derivatives Other liabilities Total Liabilities Minority Interests Shareholders Funds EPS/DPS EPU (Reported) EPU (Adjusted) EPS growth (%) DPS AFFO DPS growth (%) Payout Ratio (%) Distribution Yield (%) Ratios Profitability NOI Growth (%) NPAT Growth (%) ROA (%) ROE (%) Tax Rate (%) Market Performance Price/Earnings (x) EV/EBITDA (x) Price/NTA (%) Balance Sheet Net Debt/Equity (%) Net Debt/Assets (%) Interest Cover (x) NTA ($/share)
2010A 68.3 0.0 -2.9 65.4 0.0 65.4 -34.0 0.0 15.2 46.7 0.0 0.0 46.7 22.5 2010A 16.7 1.1 728.8 0.0 0.0 0.0 28.2 774.8
2011F 84.7 0.0 -3.6 81.1 0.0 81.1 -41.1 0.0 3.5 43.5 0.0 0.0 43.5 34.5 2011F 32.3 1.7 931.8 0.0 0.0 0.0 47.0 1012.8
2012F 84.5 0.0 -3.8 80.7 0.0 80.7 -42.2 0.0 0.0 38.4 0.0 0.0 38.4 38.4 2012F 32.3 1.7 932.6 0.0 0.0 0.0 47.0 1013.5
2013F 86.8 0.0 -4.0 82.8 0.0 82.8 -42.3 0.0 0.0 40.5 0.0 0.0 40.5 40.5 2013F 32.5 1.7 933.4 0.0 0.0 0.0 47.0 1014.5
FY12
416.6 14.6 19.6 450.8 0.0 324.0 2010A 34.5 16.6 -61.5 14.0 16.6 -56.9 84.3 7.3 2010A 6.3 50.9 2.9 6.9 0.0
546.7 7.3 25.1 579.2 0.0 433.6 2011F 21.8 17.3 4.2 17.1 18.4 22.1 98.9 9.0 2011F 23.9 53.6 3.4 8.0 0.0
546.7 7.3 25.1 579.2 0.0 434.3 2012F 18.1 18.1 4.5 18.1 17.7 5.7 100.0 9.5 2012F -0.2 11.4 3.8 8.9 0.0
546.7 7.3 25.1 579.2 0.0 435.3 2013F 19.0 19.0 5.4 19.0 18.7 5.4 100.0 10.0 2013F 2.8 5.4 4.0 9.3 0.0
8.3% 8.3%
0.90 9.0%
Valuation: $ 2.04 Val'n: $ Overview Growthpoint Properties Australia (GOZ) is a REIT focused on domestic commercial property with earnings only from passive rental income. Management is internalised. Board of Directors Lyndsay Shaddock Tim Collyer Norbert Sasse David Spruell Grant Jackson Francois Marais Estienne de Klerk
2.35
Chairman Managing Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Executive Director
% 67.0% 9.1%
Subtotal
76.1%
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
Recommendation History
$2.50 $2.00 Share Price ($) $1.50 $1.00 $0.50 $0.00 12 Months
16 14 B B 12 10 8 6 4 2 0
Volume (million)
Target Price Share Price Recommendation 2.06 1.99 1.99 1.67 1.91 1.93 1.92 B B B
Stock recommendations: Investment ratings are a function of Patersons expectation of total return (forecast price appreciation plus dividend yield) within the next 12 months. The investment ratings are Buy (expected total return of 10% or more), Hold (-10% to +10% total return) and Sell (> 10% negative total return). In addition we have a Speculative Buy rating covering higher risk stocks that may not be of investment grade due to low market capitalisation, high debt levels, or significant risks in the business model. Investment ratings are determined at the time of initiation of coverage, or a change in target price. At other times the expected total return may fall outside of these ranges because of price movements and/or volatility. Such interim deviations from specified ranges will be permitted but will become subject to review by Research Management. This Document is not to be passed on to any third party without our prior written consent.
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.
22 February 2011
All information and advice is confidential and for the private information of the person to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.