Investments
OVERVIEW
Rural Funds Group (ASX: RFF) is Australia’s first ASX listed diversified agricultural Real Estate Investment Trust (REIT). RFF is included in the S&P/ASX 300 index.
RFM is the manager and responsible entity of RFF. RFF owns a diversified portfolio of Australian agricultural assets in five core sectors which are predominantly leased to corporate agricultural operators. RFM seeks to generate earnings and income growth through productivity improvements and conversion of assets to higher and better use. Distribution growth of 4% per annum is targeted.
RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805).
Key statistics as at 31 December 2021
FY22f revenue by sector as at 31 December 2021:7
2 Includes cattle and cropping property aggregation Kaiuroo, which has a settlement period of up to November 2023.
3 Weighted average lease expiry (WALE) is calculated as the FY22 forecast rent and the year of lease expiry, excludes income from annual water allocation sales, revenue from owner occupied properties and agistment. Revenue from owner occupied properties include Beerwah & Bauple – Macadamias; unleased Maryborough properties and Baamba Plains – Cropping; Yarra – Cattle
4 Gearing calculated as external borrowings/adjusted total assets.
5 FY23 forecast distributions per unit to include franking credits. Cash distribution to be at least 11.73cpu.
6 Calculated forecast FY22 distribution of 11.73 cpu divided by the closing price of $2.96 (8 February 2022).
7 Figures shown are subject to rounding. Lessees shown byFY22f revenue. 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 income from annual water allocation sales, revenue from owner occupied properties and agistment. Revenue from owner occupied properties include Beerwah & Bauple - Macadamias; unleased Maryborough properties and Baamba Plains - Cropping; Yarra - Cattle.
STRATEGY
RFF targets distribution growth of 4% per annum. Income growth is achieved through lease indexation, productivity improvements and conversion of assets to higher and better use.
RFF owns a diversified portfolio of agricultural assets predominantly leased to corporate operators. Historically RFF assets have been acquired in sectors where Australia has a comparative advantage and RFM has operational experience.
Information on three key elements of RFF’s strategy including lessee selection, diversification and acquisitions and developments is included below.
Lessees
RFF lessees predominantly consist of corporate entities, representing 78% of FY22 forecast income. Many of these corporate entities are also listed on domestic or international securities exchanges, either directly or via their parent entity.
Private farming operations of varying sizes represent 11% of lease income. In addition, RFM entities (10%) and investment funds (1%) lease properties from RFF. Both of these arrangements provide RFM operating experience which can benefit RFF’s asset and sector due diligence, identifying and executing development opportunities and lessee selection and management.
FY22f revenue by lessee type (as at 31 December 2021)1,2
2. ‘Other’ in revenue by lease indexation mechanisms, includes: J&F guarantee fee, other short term leases, revenue from Kaiuroo deposit and cattle finance leases. Excludes revenue from owner occupied properties (see note 1).
Diversification
RFM seeks to achieve multiple layers of diversification within RFF, including by:
- Asset type: this incorporates diversification across both infrastructure predominant and natural resource predominant assets. More information included under ‘Acquisitions and developments’.
- Climatic zone: climatic diversification moderates the likelihood of multiple lessees being exposed to adverse weather events at any one point in time (see ASX: RFF Climatic Diversification discussion paper 20 June 2016).
- Lessees: diversification of counterpart risk. More information under 'Lessees'.
Climatic diversification map (as at 31 December 2021)1
1 Shaded areas denote climatic zones differentiated by rainfall seasonality (source: Bureau of Meteorology); see Climatic Diversification discussion paper dated 20 June 2016. Numbers in the circles/boxes on map show number of assets. Natal cattle property aggregation previously shown as three properties now shown as one. Cattle property Kaiuroo, which has a settlement period of up to November 2023,included in number of properties. Blue square boxes denote cattle feedlots.
Acquisitions & developments
RFF will pursue the acquisition of additional assets that grow the quantum and diversity of RFF’s earnings. The investment strategy is to invest across the full range of the asset continuum shown to right1, with the objective of ensuring the asset mix can continue to fund distributions.
Within various agricultural sectors, RFF is pursuing investment opportunities which may provide productivity gains or conversion to higher and better use.
Both strategies aim to lift the value and income earning potential of an asset. The productivity strategy achieves this objective by enhancing a property’s ability to produce a given commodity. Whereas the higher and better use strategy aims to transform the use of an asset to a different, more profitable commodity. Put simply, increased productivity or production of a more valuable commodity enhances the ability of the operator to generate higher profits, leading to a higher valuation and enabling the landlord to charge more rent thus supporting RFF’s distribution growth target of 4% per annum.
Spectrum of investment opportunities1
1 The income and growth figures presented have been provided to differentiate the profile of income and growth that can be derived from different assets. They are based on RFM’s experience and observations of agricultural lease transactions and historical rates of growth. They are neither forecasts nor projections of future returns. Past performance is not a guide to future performance.
Manager
RFM has a depth of experience accumulated over 25 years acquiring, developing and operating Australian farmland, agricultural infrastructure and other assets. Sector experience includes almonds, poultry, macadamias, cattle, cropping, viticulture and water.
RFM employs over 150 staff and seeks to maximise returns through its experienced management team including specialist fund managers, finance professionals, horticulturists, agronomists and other agricultural managers. RFM’s key responsibilities in the management of RFF include:
- Compliance to financial, farming and reporting requirements of leases.
- Water asset management including obtaining approvals and engagement with government.
- Management of infrastructure e.g. ongoing and development capital expenditure.
- Coordination of regular independent valuations.
- Facilitating acquisitions.
- Managing lessee/customer relationships.
Under the RFF constitution RFM is entitled to the following remuneration:
- Management fee of 0.6% pa of adjusted total assets; and
- Asset management fee of 0.45% pa of adjusted total assets.
Portfolio
The RFF portfolio comprises 69 properties in five states as at 31 December 2021.
The below map presents information on the RFF property portfolio, including asset locations and sector information. Assets are invested in five core agricultural sectors; almonds, cattle, vineyards, cropping and macadamias. Further information on individual properties is presented in the tables below.
Below you will find more information on the individual sectors.
Cattle
On this page:
FINANCIAL RESULTS
Most recent financial results
Media release
Investor webinar
Historical financial results
Distribution Reinvestment Plan
The RFF Distribution Reinvestment Plan (DRP) provides investors a convenient and cost-effective way to increase their holding by reinvesting all or part of their distributions in the form of additional units.
Participation in the DRP is optional. Investors electing to participate will automatically have their distribution applied to acquire additional units in accordance with the DRP rules, and without incurring brokerage or other transaction costs.
The number of units received is calculated based on a 1.5% discount to the weighted average market price of RFF units traded on the ASX during the 20 consecutive trading days before the Record Date.
Download a summary or the full copy of the DRP.If you would like to register or change your participation nomination in the RFF DRP, please update your preferences on Boardroom InvestorServe.
Analyst Coverage
The following analysts monitor RFF and periodically publish reports about the fund.
RFM is able to circulate reports with issuer approval. To enquire about the latest reports, please contact RFM Investor Services via: investorservices@ruralfunds.com.au
Financial Information
RFF units are listed on the Australian Securities Exchange (ASX).
View the latest RFF ASX announcements at the top or visit the RFF ASX page.
The data and information contained on this webpage relating to the performance and price of RFF is supplied by a third party.
Distribution history
Record date
Reinvestment date
Payment date
Distribution paid (per unit)
Franking Credits
Total
Net Asset Values (NAV)
Date
Adjusted NAV (per unit)1
NAV (per unit)
RFT portion2
RFA portion2
Frequently Asked Questions
RFF units can be traded via the ASX. The following information is provided as a guide to investing in RFF. As with all investments, unit holders should seek personal advice from their professional advisers before investing.
How do I buy and sell units?
You can buy or sell RFF units through a suitably licensed financial adviser, stockbroker or online broking facility. These transactions may incur a brokerage fee.The ASX also provides a ‘Find a broker’ listing which may assist you. Rural Funds Management Limited does not trade units directly with unitholders.
How do I find out what my unit is worth?
You will find the latest unit price, trading volume, announcements and other information about RFF units (ASX: RFF) in the financial section of major newspapers or from the ASX website.
When do I receive a distribution?
RFF pays distributions on a quarterly basis. Distribution announcements can be found on the ASX. Indicative dates for distributions are also included in the Key Dates section of this website.
Where can I find further information?
Research for RFF can be found in the analyst coverage section of this website, or by contacting your stockbroker or financial adviser. Please note that the information and estimates contained in these reports are the views of those of organisations and not of Rural Funds Management Limited (RFM). RFM accepts no responsibility for the content or accuracy of these reports.
Are distributions franked?
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 Unit holders of the profit generated from its trading activities. Distributions from RF Active may attract franking credits.
Forms
The unit registry for RFF is managed by Boardroom Pty Ltd.
The unit registry for RFF is managed by Boardroom Pty Ltd. Registry Forms can be accessed and downloaded Boardroom's Investor Forms page. Investors and advisers can update their details by contacting Boardroom via InvestorServe or by telephone on 1300 737 760. Alternatively, you can contact RFM Investor Services on 1800 026 665 or via email at investorservices@ruralfunds.com.au.
Publications
Sale of poultry assets and acquisition of cattle properties presentation
RFF Annual Report FY19
RFF Financial Results FY19
RFF Financial Results HY19
RFF FY18 Annual Report
RFF Financial Results FY18
Entitlement Offer - Notice of Meetings and Explanatory Memorandum
Entitlement Offer - Retail Offer Booklet
RFF Distribution Reinvestment Plan
RFF Financial Results HY18
Rural Funds Group (RFF) FY17 Annual Report
RFM StockBank Full Year Report 2017
RFM's environmental, social and governance (ESG) activities
Learn about RFM’s incorporation of ESG considerations in the management of agricultural assets.