About

From Strength
to Strength

We look forward to continuing to work with ALH/Endeavour Group.

86 leases

ALE Property Group

Australia’s largest pub landlord.

Properties

86

Average lease term

8.3 years

+ 40 years of options

Statutory property value

1,174.2m

Land

95 hectares

approx.

ALH Group

Australia’s largest pub operator.
Wholly owned by Endeavour Group (since February 2020).

Licensed venues

330

approx.

Retail liquor outlets

600

approx.

FY19 revenue

$4,670m

FY19 EBITDA

$583m

Endeavour Group (including ALH Group)

Australia’s largest drinks and hospitality business.
Wholly owned by Endeavour Group (since February 2020).

Venues and outlets

1,926

approx.

FY19 revenue

$10.33b

FY19 EBITDA

$0.95b

Sources:
Woolworths ASX announcements, ALH’s website and ALH’s accounts. All numbers are approximate.
Results

FY20

Highlights

During the year ALE’s positive results were evident across the property portfolio, capital management matters and relative equity performance.

$1,174.2m

Statutory Property Values

5.08%

Average Adopted Yield

8.3 years

Average Lease Term

+ four options of 10 years

0.9%

Passing gross
rental growth

41.3%

Gearing

2.4 years

Average Debt Maturity

5.4 years

Hedge Maturity

20.9cps

Distribution

18.9% p.a.

17 year Total Return

Property Valuations

ALE’s properties increased in value by 0.9% during FY20 to around $1.174 billion. The average value of the 86 properties at 30 June 2020 was $13.7 million.

Total Value

$1,174.2m

Properties

86

Average value

$13.6m

Weighted Average Yield*

5.08%

Properties

10

Value

$167.9m

Average Value

$16.8m

Weighted Average Yield*

5.02%

Properties

32

Value

$368.0m

Average Value

$11.5m

Weighted Average Yield*

5.01%

Properties

7

Value

$41.6m

Average Value

$6.0m

Weighted Average Yield*

5.12%

Properties

33

Value

$564.9m

Average Value

$17.1m

Weighted Average Yield*

5.07%

Properties

4

Value

$31.8m

Average Value

$8.0m

Weighted Average Yield*

6.31%

Debt Capital

ALE has a Debt Facility and two fixed rate capital markets instruments, Capital Indexed Bonds
(CIB) and Australian Medium Term Notes (AMTN) with diversified maturities.

Debt Maturities and Hedging Profile

  1. CIB balance escalates with CPI.

Equity Capital

ALE has outperformed both the AREIT 300 and All Ordinaries index over all time periods since 2003.
  1. Total return is the annual compound return (IRR) for the number of years ending 30 June 2020.
  2. Includes ASX market price of $4.97 as at 30 June 2020 and reinvestment of distributions and 2009 renunciation payment.
  3. ALE, All Ordinaries Accumulation Index and UBS S&P REIT 300 Index data sourced from ASX, UBS and ALE.
  4. An investment in ALE at IPO in 2003 of $1.00 has accumulated value at 30 June 2020 of $17.67.
Year in Review

“ALE once again delivered positive or unchanged results for all key financial metrics.”

Andrew Wilkinson

Chair and MD Q&A

We maintained our core strategy of ensuring that we preserve, enhance and extract maximum value for our securityholders from our high quality and strategic portfolio of pub properties.

Operational Review

The total value of ALE’s properties increased by 0.9% to around $1,174 million during the year. The current values reflect both the strong demand for quality pub properties like ALE’s and an increased recognition of the expected positive prospects for rental growth from rent reviews in 2018 and particularly 2028.
Value

ALE’s Board encourages securityholders to consider all aspects of the portfolio’s value

  • 100% of the pub properties are leased to ALH, Australia’s largest pub operator
  • Long–term triple net leases (83 of 86 properties)
  • Properties have operated in current locations as pubs for more than 60 years on average
  • 2028 provides opportunity for open and uncapped review
    of rents
  • 95 hectares of land
  • More than 90% of the ~95 hectares of land owned by ALE is located in Australian capitals and major cities
  • Mixed and alternate use opportunities exist for a number of the properties in the longer term
Development

Development highlights across 86 properties over the past 17 years

Substantial Reconstructions

10

Significant Refurbishments

25

(plus widespread program during FY20)

Dan Murphy’s Additions

23

  • In addition, regular maintenance obligations exist for ALH
  • Significant development expenditure and earnings accretion for ALH
  • All earnings from all activities are included for rent review purposes, irrespective of the funding source for the additional leasehold improvements

Case Studies

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Miami Tavern,
Gold Coast, QLD

The tavern is located at Miami Beach, Miami, just 13km north of the Gold Coast Airport and was acquired in 2003. A new Dan Murphy’s was successfully opened in December 2017.
ALE acquired adjoining property in April 2018 for $1.5 million to facilitate longer-term development opportunities. A significant refurbishment of the beachside Bar and Bistro areas was completed by ALH in December 2019. Earnings for ALH are expected to benefit significantly, positively underpinning ALE’s future market rent.
1Includes adjacent lot purchased in April 2018.
Acquisition Cost 1

$5.5m

June 2020 Value1

$15.8m

Acquisition Cap Rate

7.8%

June 2020 Adopted Yield

4.6%

Young & Jackson,
Melbourne, VIC

The hotel was first operated in 1861 and is located on one of the Melbourne CBD’s most well recognised intersections, opposite Flinders Street Station, Federation Square and St Paul’s Cathedral. ALE acquired the hotel in 2003.
Construction of an underground Melbourne Metro has commenced and a new Town Hall Station will surround the hotel and become operational from 2026. Works around the hotel are progressing and Station access will be available from either side of the hotel on both Flinders Street and Swanston Street. Significant increase in foot traffic around the hotel is expected to positively impact ALE’s future market rent prospects.
Acquisition Cost

$6.1m

June 2020 Value

$23.4m

Acquisition Cap Rate

6.9%

June 2020 Adopted Yield

2.9%

Board and Management

The Board of Directors and Management team have extensive experience covering property, finance, risk management, compliance and capital management.

Robert Mactier

Independent Non–Executive Director
Chairman of the Board

Andrew Wilkinson

Managing Director

Phillipa Downes

Independent Non–Executive Director

Paul Say

Independent Non–Executive Director

Nancy Milne

Independent Non–Executive Director

Michael Triguboff

Non–Executive Director

Bernard Stanton

Non–Executive Director

Mike Christensen

B.Econ, MAPF, GAICD, FFTP | Non-Executive Director, ALE Finance Company Pty Limited

Andrew Wilkinson

Managing Director

Guy Farrands

Consultant

Andrew Slade

Capital Manager

Michael Clarke

Company Secretary

Mark Crick

Asset Manager

Margaret Sullivan

Compliance Officer

2020 ALE AGM

27 October 2020
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