Fund Overview

Rural Funds Group (ASX: RFF) is Australia’s first listed diversified agricultural Real Estate Investment Trust (REIT). Rural Funds Management Limited (RFM) is the responsible entity of RFF.

RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805). The fund listed on the Australian Securities Exchange (ASX) in February 2014, becoming Australia’s first listed diversified agricultural REIT. RFM is the responsible entity of RFF.

RFF owns a diversified portfolio of Australian agricultural assets which are leased predominantly to corporate agricultural operators. RFF targets distribution growth of 4% per annum by owning and improving farms that are leased to good counterparties.

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Key statistics

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Key statistics

30 June 2021
Pro forma adjusted total assets1 $1.2b
Pro forma adjusted net assets1 $745.5m
Pro forma adjusted NAV per unit1 $2.20
Number of properties 66
Sectors 5
Weighted Average Lease Expiry (WALE)2 9.3 years
Pro forma gearing3 24.6%
FY22 forecast AFFO4 per unit 11.6 cents
FY22 forecast distributions per unit 11.73 cents
FY22 forecast distribution yield5 4.5%

1 Adjusted assets incorporates most recent independent property valuations, inclusive of water entitlements. Pro forma relates to $100m Entitlement Offer announced 8 July 2021. Funds raised to acquire water assets ($38.4m), debt reduction ($58.6m) transaction costs ($3.0m).

2 Calculated as the FY22 forecast rent and the year of lease expiry. Excludes properties not leased (see disclosure 8 July 2021).

3 Gearing calculated as external borrowings/adjusted total assets. Pro forma relates to $100m Entitlement Offer announced 8 July 2021.

4 Adjusted funds from operations, a financial metric used in the REIT sector to measure available cash flow from operations (adjustment relates to non-cash tax expense).

5 Calculated forecast FY22 distribution of 11.73 cpu divided by the closing price of $2.59 (23 August 2021).

 

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Diversified assets and counterparts

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Note:
1. Figures shown are subject to rounding. Lessees shown by FY22f revenue. Olam refers to Olam Orchards Australia Pty Ltd, a wholly owned subsidiary of SGX-listed Olam International Ltd (SGX: O32). Income from J&F Australia Pty Ltd attributed to JBS Australia. Cotton JV income split 50% RFM and 50% listed and corporate (Queensland Cotton Corporation Pty Ltd). Excludes other income (e.g. from annual water allocation sales, cropping operations and agistment).

2. Figures shown are subject to rounding. Sectors shown by FY22f revenue. Excludes other income (e.g. from annual water allocation sales, cropping operations and agistment).

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Structure

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Rural Funds Trust is a passive entity for tax purposes and incorporates the majority of RFF assets including almonds, macadamias, vineyards, cropping and cattle sectors. The income received from these assets is passive in nature and thus attracts flow through taxation treatment, meaning that earnings on these assets are taxed in the hands of the investor at their marginal rate. RF Active houses assets which are considered operational in nature from a taxation perspective. As these assets are held within RF Active they do not impact on the flow through taxation treatment on the assets held within Rural Funds Trust. RF Active is taxed as a public trading trust. As a public trading trust, RF Active:

  • pays tax at the corporate tax rate (currently 30%) on the profit it generates from its operational activities; and
  • may, from time to time, make distributions to Unitholders of the profit generated from its trading activities. Distributions from RF Active may attract franking credits.