2011 centuria results presentation

Result Announcement for the full year ending 30 June 2011

Centuria Capital Limited

Presentation to Investors and Analysts updated 13 September 2011

Property FUM increase by 40% during financial year$1 billion property FUM milestone achieved Total group FUM increased by 16% to $1.93 billion

Rebranding to Centuria completed - core divisions now share common branding

Underlying FY11 - EBIT $10.5 million, NPAT $6.4 millionCenturia Life underlying Net Profit steady (+2.4%)

Full year dividends of 6.0 cents per share partly franked to 30% representing a 20% increase over 2009/10 financial year

Corporate gearing remains low at 8.9% (excluding non recourse debt and convertible notes)


Presentation to Investors and Analysts 2Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

2011 Financial Year Highlights

Realising our Growth Strategy

Brand Consolidation

Underlying Earnings

Increased Dividends

Strong Financial Position



2011 Key Business Highlights

Implementing growth strategy - increasing FUM Growth in group FUM in 2011 by 16%

Reverse Mortgage FUM ($bn)

Centuria LifeFUM ($bn)

CenturiaPropertyFUM ($bn)

Total Funds Under Management ($bn)

2.00

1.50

1.00

0.50

-

2.50

2007 2008 2009 2010 2011




Successful brand consolidation to Centuria – taking us from a collection of companies, to a single diversified funds manager.

Centuria Property Funds successfully completed two major property funds and was awarded the management rights for a major national portfolio of former Becton property funds.

These transactions generated over $300 million of growth in FUM.

Launch of an industry-leading investor rights campaign in the Property Funds division to transfer rights back to the investor.

Significant investments in infrastructure / people – appointments of key senior personnel – distributions, operational property and funds management, finance and tax.

These investments have impacted profitability but are essential to service the new business and build a platform for growth.




Ongoing focus on Capital Management

Continued low level of corporate gearing (excluding non recourse debt and convertible notes).

Successful completion of unmarketable parcel buy-back reducing the number of shareholders by 29% to ~16,000 at present.

* 2011 increase in corporate borrowings as a result of: - part repayment of convertible notes,- unmarketable parcel buyback, and - second (and final) instalment for fund manager acquisition

*



,

Centuria Life

Reverse Mortgages

Centuria Property Funds

Insurance

Other (i)

(1) Includes Corporate, Property Investments, Mortgageport and National Leisure Trust.

$000’s

14,030

16,781

11,419

1,319

5,413

48,962

2010

$000’s

13,453

16,294

13,015

1,341

4,012

48,115

2011Year ended 30 June 2011

Divisional Revenue (excl. Benefit Funds)



,

Underlying net profit by major division

- Centuria Property Funds

- Centuria Life

- Reverse Mortgages

- Insurance

- Corporate

- Other (Property Investments/ Commercial Mortgages/ Other divisions)

Total underlying net profit

Underlying tax expense (i)

Underlying earnings after tax

(1) Tax expense excludes the $3.6 million tax benefit of the one-off adjustments in the current period.

$000’s

5,378

8,925

3,130

1,011

(6,204)

(1,049)

11,191

(3,357)

7,834

2010

$000’s

4,755

9,137

3,495

1,037

(8,601)

697

10,520

(4,163)

6,357


Underlying Results (excl. Benefit Funds)



,

Underlying earnings after tax

Non-recurring adjustments

- Prior year non-recurring adjustments (including tax effect)

- Impairment of investment in associates (Mortgageport and CBGF)

- National Leisure Trust write-downs

- Funds spent on Opus 21

- Rebranding costs

- Reverse Mortgages Break-cost adjustments

- PY reversal of executive options

- Tax benefit on 30 June 2011 non-recurring adjustments

Reported net (loss) / profit after tax

$000’s

7,834

(1,516)

-

-

-

-

-

-

-

6,318

2010

$000’s

6,357

-

(3,933)

(6,787)

(575)

(532)

(1,256)

221

3614

(2,891)


Significant and Non-recurring Items(excl. Benefit Funds)



Operating EBIT contribution $4.8m.

Consistent with Centuria’s growth strategy, property FUM has increased 40% from 30 June 2010 to 30 June 2011. Achieved 1 billion dollars in FUMmilestone for Centuria Property Funds demonstrating our ongoing success in growing the size and scale of our property business.

Key Achievements

Successful launch of two new property funds in 2H11.

Strategic staff appointments made to strengthen the growth platform – well positioned to increase FUM both organically and through acquisition.

Strong Growth in FUM

Centuria 8 Australia Avenue Fund

Centuria 200 Creek Street Fund

• Fund launched March 2011 • Purchase price $37.7 million

• Fund launched June 2011 • Purchase price $30.15 million

1.50

1.00

0.50

PropertyFUM($bn)

2007 2008 2009 2010 2011 2012(E)

Property Funds Under Management ($bn)




29Number of Funds

48Number of Buildings

3.6 yearsPortfolio Weighted Average Lease Expiry (income)

3,779Number of Investors

91Portfolio Occupancy

%

17.8Total Returns to Date: completed 19 funds wiith a value of $341m with an average return to investors of 17.8%

%

Key Achievements (continued)

Business Profile

Responsible Entity appointment to Becton Office Fund No 2 (now COF2) and Becton Diversified Direct Property Fund (now CDDPF) – resulting in significant accretive earnings to Centuria shareholders as well as increased distributions returns to investors (COF2 return increase of 200% and CDDPF 33%) as a result of focused management and capital restructuring. FUM increase of $240m.

Portfolio by SectorOffice

Industrial

Retail Bulky Goods

Speciality Use

Mixed Use

Retail

Portfolio by StateNew South Wales

Victoria

Queensland

South Australia

Australian Capital Territory

Northern Territory

Centuria Property Funds (continued)



Strategic appointment of Head of Marketing and Distribution to focus on growth of existing products and opportunities for new investment solutions.

The Centuria Life division continues to generate strong and stable cash earnings to the Centuria Group.

FUM balance as at 30 June 2011 was $736 million.

The Capital Guaranteed Bond have delivered consistent and higher net returns in a volatile and challenging environment.

Redemptions have fallen as improved returns have demonstrated the value of our guaranteed bonds to policyholders.

$166 mTotal FUM of Capital Guaranteed Bond

$234 mTotal FUM of Income Accumulation Bond

27,795Total number of Policies

Centuria Life



Insurance

92%

90%

88%

86%

84%

82%

80%

78%

Continued Strong Customer Retention Rate

Over Fifty Insurance Home Over Fifty Insurance Motor

2006 2007 2008 2009 2010 2011

Continued consistent contributor to Centuria Group earnings – 2011 EBIT $1.04m.

Maintained high customer retention over time.

Approximately 28,000 policyholders in the insurance division.

Marketing intensified with improving results – sales increased 33%, number of quotes increased 19% and premium written 35%. Motor sales increased 15% over the last 24 months, with growth in the Queensland and South Australian markets.

Source: Allianz.



Reverse Mortgages

Value of mortgage book at 30 June 2011 - $192 million (30 June 2010: $197 million).

Non-recourse loan at 30 June 2011 - $165 million (30 June 2010: $176 million).

Loan facility maturity date extended to 31 March 2013.

Significant embedded shareholder equity in the portfolio increasing 2011: $ 27 m (2010 : $21m).

Loan statistics at 30 June 2011- Portfolio LVR: 20.6%- Number of loans: 2,256- Average loan balance: $85,151

No portfolio loan losses sustained on the portfolio since inception.

200,000

150,000

100,000

50,000

-

Jun -

11

Jun -

13

Jun -

15

Jun -

17

Jun -

19

Jun -

21

Jun -

23

Jun -

25

Jun -

27

Jun -

29

Jun -

31

Jun -

33

Jun -

35

Jun -

37

Jun -

39

Jun -

41

Jun -

43

Jun -

45

Embedded Value - At 30 June 2011- 8.2% p.a redemption rate ($’000)

ANZ Loan BookOFG Mortgage Book

Source: Rice Warner, 30 June 2011



12-month Outlook

Centuria businesses are increasingly well positioned to benefit from future growth

Strength in diversity

Balance sheet positioned for growth

Improving market presence

Property specialist

Financial Services

Ongoing volatility in financial markets will create weaker asset prices and further accretive acquisition opportunities.

Core strength in diversification of our income streams.

Low corporate gearing – 8.9% (excluding non recourse debt and convertible notes).

Continue to leverage our PR and marketing investment to attract new equity and distribution channels.

Significant expertise in property investment in a market with fewer competitors.

Continued investment in our people to enable us to expand across new funds.

Expand distribution of existing products.



Future Growth

Centuria Capital is currently implementing an aggressive growth strategy to take advantage of acquisition opportunities in the current market.

Centuria Capital has been, and is currently reviewing a number of potential corporate or funds management acquisition opportunities.

Growth in FUM – target is to grow FUM to $3bn by December 2013 through both organic growth and acquisitions.

Expand our distribution networks.

Rebrand our investment bond products.

Identify financial solutions and product relevancy to increase inflows.


Centuria Life



The “Statutory Accounts” show the consolidated corporate entities including the Benefit Funds which Centuria is required under AIFRS to consolidate.

The “Benefit Funds” reflect value of stand alone policy holder funds.

The “Corporate Accounts” reflect the value and performance of Centuria shareholder funds.

Numbers in the following reconciliations may differ slightly from the Annual Report however this is due to rounding of numbers.

General comment on statutory account reconciliation

AppendicesStatutory Account Reconciliations



Revenue

Revenue from Centuria Life

Net revenue from benefit funds

Other income

Total revenue

Finance costs

Employee benefits expense

Administrative and other expenses

Centuria Life expenses

Share of loss of associates

Impairment of investments in associates

Revaluation of investment property assets

Net profit before tax:

Tax

Reported NPAT

33

13

-

2

48

17

7

13

4

1

4

5

(3)

-

(3)

Corporate Accounts

$m

-

-

4

-

4

-

-

-

-

-

-

-

4

4

-

Benefit Funds

$m

33

13

4

2

52

17

7

13

4

1

4

5

1

4

(3)

Statutory Accounts

$m

Appendix 1: Income Statement for year ended 30 June 2011



Assets:

Cash and Equivalents

Trade and other receivables

Financial assets at fair value

Other financial assets

Reverse Mortgage Loans

Investment property

Investment in associates – equity method

Plant & equipment

Deferred tax assets

Intangible assets

Assets in relation of benefit funds

Other assets

Total Assets

12

11

2

6

192

23

7

1

12

54

-

1

321

Corporate Accounts

$m

-

-

-

-

-

-

-

-

-

-

509

-

509

Benefit Funds

$m

12

11

2

6

192

23

7

1

12

54

509

1

830

Statutory Accounts

$m

Appendix 2: Balance Sheet as at 30 June 2011



Liabilites:

Trade and other payables

Corporate debt

Borrowings – recourse to investment property only

Borrowings - Reverse Mortgages

Other liabilities

Policyholder Funds

Derivative financial liabilities

Income tax payable

Total Liabilities

Net Assets:

Equity:

Issued capital

Reserves

Retained earnings

Equity attributable to equity holders of the parent

Total Equity

5

9

23

165

7

-

14

8

231

90

100

(1)

(9)

90

90

Corporate Accounts

$m

-

-

-

-

-

509

-

-

509

-

-

-

-

-

-

Benefit Funds

$m

5

9

23

165

7

509

14

8

740

90

100

(1)

(9)

90

90

Statutory Accounts

$m

Appendix 2: Balance Sheet as at 30 June 2011 (continued)



)

Cash flows from operating activities

Interest received

Dividends received

Management fees received

Rent, trust and other income received

Benefit funds

Payments to suppliers and employees

Income tax received

Net cash flows used in operating activites

Cash flows from investing activities

Benefit funds

Payment for plant and equipment

Proceeds from investment in other financial assets

Payment for acquisition of intangible assets

Net cash flows provided by investing activities

1

-

19

16

-

(27)

1

10

(6)

-

(1)

(2)

-

(9)

Corporate Accounts

$m

-

-

-

-

(33)

-

-

(33)

-

17

-

-

-

17

Benefit Funds

$m

1

-

19

16

(33)

(27)

1

(23)

(6)

17

(1)

(2)

-

8

Statutory Accounts

$m

Interest earned on mortgage loans net of mortgage receipt/ draw-downs

Appendix 3: Cash Flow Statement for year ended 30 June 2011



Cash flows from financing activities

Proceeds from issue of equity securities

Loans from related entities

Benefit funds

Proceeds from borrowings – Reverse mortgages

Funds provided to Reverse Mortgage customers

Funds collected from reverse Mortgage customers

Repayment of borrowings

Finance costs

Proceeds from borrowings

Dividends and distributions paid

Net cash flows used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

2

(4)

-

5

(5)

27

(16)

(13)

4

(4)

(4)

(3)

14

11

Corporate Accounts

$m

-

-

(6)

-

-

-

-

-

-

-

(6)

(22)

41

19

Benefit Funds

$m

2

(4)

(6)

5

(5)

27

(16)

(13)

4

(4)

(10)

(25)

55

30

Statutory Accounts

$m

Appendix 3: Cash Flow Statement for year ended 30 June 2011 (continued)



This document has been issued by Centuria Capital Limited ABN 22 095 454 336 and contains general information about Centuria Capital Limited and its related bodies corporate (“Centuria”) which is current as at 19 August 2011.

The information in this document is in summary form and does not purport to be complete. Due to the impact of rounding, the totals shown for charts, graphs or tables in this document may not equate to the sum of the individual components of the relevant chart, graph or table. Accordingly, it should be read in conjunction with all other information concerning Centuria filed with the Australian Securities Exchange.

The document has been prepared from information believed to be accurate, however, no representation or warranty is made as to the accuracy or adequacy of any information contained in the document. To the extent permitted by law, Centuria, its related bodies corporate and their respective directors, officers and employees, exclude liability for any loss or damage resulting from the issue or use of, or reliance on, anything contained in or omitted from this document.

This document is not a recommendation or personal advice in relation to Centuria or any product or service offered by Centuria and does not take into account the investment objectives, financial situation or needs of any particular person. Past performance is not indicative of future performance.

To the extent this document contains prospective financial information, that information has been based on current expectations about future events and is, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from expectations.

Disclaimer

2011 centuria results presentation

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