RFF Fund Overview

Rural Funds Group (ASX: RFF) is Australia’s first listed diversified agricultural property trust. RFM is the responsible entity of RFF.

Rural Funds Group (ASX: 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 property trust. Rural Funds Management Ltd (RFM) is the responsible entity of RFF. RFF owns a diversified portfolio of high quality Australian agricultural assets. Investors are expected to benefit from capital growth through appreciation in the value of RFF’s assets, and a stable income stream derived from leasing those assets to suitably qualified and experienced counterparts.

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Key statistics

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Key statistics

31 December 2019
Adjusted total assets2 $950.2m
Adjusted net asset value (NAV)2 $618.5m
Adjusted NAV per unit2 $1.84
Market capitalisation ($2.03 per unit) $681.8m
Number of properties1 38
Sectors 5
Weighted Average Lease Expiry (WALE)3 11.5 years
Gearing4 26.4%
AFFO per unit (FY20 forecast)5 13.5 cents
Distributions per unit (FY20 forecast) 10.85 cents
FY21 forecast distribution yield (paid quarterly)6 5.6%

 

Key forecasts
Distribution per unit FY20 10.85 cents
Distributions per unit FY21 11.28 cents

1 Includes pro forma assets, including: WA cattle properties (settled Feb 2020), Wattlebank (settled Jan 2020), Swan Ridge South (forecast to settle Mar 2020) and Riverina Beef feedlot (forecast to settle Mar 2020).

2 Adjusted assets incorporates most recent independent property valuations, inclusive of water entitlements.

3 Lease expiries weighted by forecast FY20 rental income, expressed in years from 30 June 2019.

4 Gearing calculated as external borrowings (less cash balance)/adjusted total assets.

5 Assumes $7.5m increase to J&F Guarantee from Apr 2020 and Unitholder approval. 

6 Calculated forecast FY21 distribution of 11.28 cpu divided by 24 February 2020 closing price of $2.03.

 

 

 

 

 

 

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Diversified assets and counterparts

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Sector by FY20 forecast revenue

 

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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, vineyard, cotton 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.
Macadamia Farm, Bundaberg, Jan, 2016. 017

Commodities

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Almond assets

LESSEES

Select Harvest (ASX:SHV): Australia’s largest vertically integrated nut and health food company, A$0.5b

Olam Orchards Australia Pty Ltd: a wholly owned subsidiary of SGX-listed Olam International Ltd, A$5.1b, second largest global almond grower

RFM Almond Fund

Cattle assets

LESSEES

Cattle JV Pty Ltd: Wholly owned subsidiary of RFM, structured to accept investment with suitable joint venture partner.

DA & JF Camm Pty Ltd: Operate an integrated cattle business, the Camm Agricultural Group (CAG).

JBS Australia: Australia’s largest lotfeeder and cattle processor.

Stone Axe Pastoral:  A Wagyu cattle breeding enterprise which operates properties in the New England region of New South Wales and Western Australia.

Katena Pty Ltd: A Queensland-based cattle business.

Elrose Enterprises Pty Ltd: A Brahman cattle stud business seeking to expand operations.

Australian Agricultural Company: Australia’s largest and oldest pastoral company. AACo own and operate approximately 1% of Australia’s landmass.

Poultry infrastructure

On 28 October 2019 RFM as responsible Entity of RFF announced it had entered into agreements for the sale of RFF’s poultry assets to ProTen Investment Management Pty Ltd as trustee for ProTen Investment Trust (ProTen) for $72.0m. The completion of the sale was announced on 19 December 2019.

Cotton assets

LESSEE

Cotton JV Pty Ltd (CotJV): 50:50 joint venture between Queensland Cotton Corporation Pty Ltd and RFM, both with significant cotton experience

Vineyards

LESSEES

Treasury Wine Estates (ASX:TWE): World’s largest listed pure-play wine company, A$6.8b.Key brands: Penfolds, Wolf Blass, Seppelt.

Macadamias

LESSEES

2007 Macgrove Project: A managed investment scheme providing investors (Growers) the opportunity to participate in the macadamia market

RFM