BECTON PROPERTY GROUP
Becton Progressing Strongly Despite Market Conditions
BEC - Business Update - Mr Matthew Chun, Chief Operating Officer and Executive Director
Thu, 7 Aug 2008 10:00AM
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Mr Matthew Chun
Thu, 7 Aug 2008
10:00AM Australia/NSW
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BECTON PROPERTY GROUP (BEC)
ASX code: BEC
Website: http://www.becton.com.au
Industry: Real Estate
Principal Activities:
Property construction & development, retirement village development & management, investment property trusts
Address:
470 St Kilda Road, Level 7
MELBOURNE
VIC
Phone: 61 3 9832 9000
Fax: 61 3 9832 9090
Executives & Directors
Mr Brian Pollock , Non Exec. Chairman
Mr Matthew Chun , Executive Director, Managing Director, CEO, Chief Op. Officer
Mr Robert Critchley , Non Exec. Director
Mr Michael Naphtali , Non Exec. Director
Mr Bill Conn , Non Exec. Director
Mr Jim Hazel , Non Exec. Director
Mr Peter Dempsey , Non Exec. Director
Mr Jason Vanderzalm , CFO
Ms Anne Jordan , General Counsel
Mr Matthew Reid , Investor Relations
Company Podcasts
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Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
BECTON PROPERTY GROUP (BEC) Events
Australia/NSW
BECTON PROPERTY GROUP (BEC)
| Becton Property Group Market Update | Wed, 3 Dec 2008 |
| BEC - Response to an ASX Price Query | Wed, 3 Dec 2008 |
| Ceasing to be a substantial holder | Wed, 26 Nov 2008 |
| Redemptions and Applications in Becton Managed Funds | Tue, 11 Nov 2008 |
| Ceasing to be a substantial holder - AMP | Fri, 7 Nov 2008 |
| Appendix 3B | Thu, 6 Nov 2008 |
| Becton Property Group - Dividend Reinvestment Plan 2008 | Thu, 6 Nov 2008 |
| Becton Property Group - Update on Proposals Received | Tue, 28 Oct 2008 |
| Becton Property Group - Chairman`s Address 2008 AGM | Mon, 27 Oct 2008 |
| Becton Property Group AGM 2008 Results | Mon, 27 Oct 2008 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH MATTHEW CHUN, CHIEF OPERATING OFFICER AND EXECUTIVE DIRECTOR OF BECTON PROPERTY GROUP (BEC)
“BEC - Business Update - Mr Matthew Chun, Chief Operating Officer and Executive Director”
http://www.brr.com.au/event/49222
THURSDAY, AUGUST 7, 2008, 10:00 AM.
BRR Good afternoon and welcome to Boardroom Radio. Today, we are speaking
10 with Mr. Matthew Chun, Chief Operating Officer and Executive Director of Becton Property Group. Thanks for joining us today, Matthew.
BEC No problem, Eddie. Good to be here.
BRR Matthew, we see today that you’ve released a business update and we can
15 also say that Becton has been progressing significantly well. Do you wanna give our listeners an update of some of the highlights?
BEC Sure. Thanks, Eddie. Look, the full-year result for FYO8 which we will announce formally in the 26th of August. What we’ve given to the market today is a market guidance and we’re very proud to announce that our
20 operating earnings will be at the 33.2 cents per share, which is up 10% from FY07 and it’s in line with our guidance which we have been consistently providing to the market over the FY08 year. So, you know, very tough market particularly for property companies for us to be able to grow our earnings for 10% is a very pleasing result. In addition to that, we have also announced to
25 the market our re-evaluation of a number of our assets and we’ve been through our whole portfolio. And given the current market conditions, we fit a number of the feasibilities on our undeveloped sites in particular and that has resulted in us writing down a number of assets in the development business and we audit prices and Board sign off is still progressing, but that range will
30 be somewhere between 65 and 72 million for our development assets. On the property side, the retirement portfolio that we hold which we now has six villages which are operating. We are very valued, all of us, and pleasingly although we are never part of the ledger and we will be re-valued upwards again within the range which are still waiting on (inaudible) (00:01:54) Board sign off
35 between 28 to 32 million. And the reasons for the retirement asset moving up is most of our assets are located in (inaudible) (00:02:04) suburbs which have recorded strong residential growth over the FY08 year in addition to the villages becoming more mature. And as villages becoming more mature, the valuations starts to increase the third management theme model starts to
40 generate more cash. So we’re very pleased with that result and re-affirms the strength of that sector and their commitment to being positioned well at the higher end of the retirement sector. We also have re-valued our property investment assets down again between the range of 2 to 4 million. The bulk of that is really due to the exposure of one of the funds that we have to boost
45 the property trust market which has seen significant decline in value over the FY08 year. So all in all, the result is very pleasing given current market conditions with operating earnings up and the net impairment between 39 to 44 million which is just down to 4% of our total assets is sort of in line with what most property companies are experiencing at the moment. We’ve been very pleased with some of the highlights for the FY08 year had large demand of settlements that we’ve had in this company’s history. So, several other $340 million with their residential real estate primarily through apartments which we’ve completed during that year that has lead us to reduce debt
5 significantly. So we’ve reduced to 200 million of our core debt, which now are gearing to the some 45% for the June 30 date against subject audit and Board sign off. So, that would be the highlights for us during the year in addition to very strong funding flows in our funds management business. So we net $179 million with funds into our business. Again, very strong signal of
10 what’s been a pretty tough in the last six to nine months in that sector, in the funds management business. We’ve been able to still generate positive net flows amidst the negative sentiment. And lastly, the net list of the value of our reported $2 billion commercial real estate portfolio which we value every quarter. About 25% of the portfolio is re-evaluated every quarter and for the
15 FY08 year that’s an increase of 106 million, largely due to strong rent growth and new leasing deals which has allowed the value to increase even though cap rates has expanded somewhat generally across the commercial property market.
20 BRR And Matthew, if you lastly just wanna touch on where you think Becton will be heading moving forward considering the market conditions and how volatile the market is.
BEC No problem, Eddie. It’s obviously the volatility in the broader financial market and the property market continues. We have a long term core focus on being
25 involved in businesses that are exposed to long term fundamental drivers. And the three that we’re very focused on is the superannuation market which continues to grow exponentially, the chronic shortage in residential accommodation and the aging population and the implication that has for the availability of accommodation for the people above 65. And whilst, the short
30 term volatility is difficult to predict how long that will last for, we are already starting to see signs of interest rates. Looking right now, that’ll be on the way down. The oil price is starting to fall. All of that should have positive impacts on the volatility. How long it will take for the credit crunch to lease is still very high and difficult to anticipate, but our focus is being linked to the longer term
35 fundamentals which are here to stay such as super residential shortage and the aging population. And therefore our focus for our business is to be deeply anchored into those three businesses through our development and construction, retirement and funds management business all play to the strength of those markets. And to ensure that all our businesses will position
40 during this volatile time by reducing debt wherever we can to get through the short term (inaudible) (00:06:18) when the long term stability returns. The business is well positioned to take advantage of this long term fundamentals.
BRR Thank you for those insights there Matthew Chun. I’m sure our listeners will
45 appreciate that. And thank you very much for your time today. We look forward to speaking to you soon.
BEC (inaudible) (00:06:33). Thanks, Eddie.
BRR That was Matthew Chun, Chief Operating Officer and Executive Director of Becton Property Group. If you have any questions about this broadcast or any other broadcast, please feel free to contact us on brr@brr.com.au. I’m Eddie (inaudible) (00:06:48) and thank you for listening to Boardroom Radio.
INTERVIEW CONCLUDED
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