CENTURIA CAPITAL GROUP — Annual Report 2005

Sep 11, 2005

OEM-INNESTMENT GROUP

CE OFM PARTNERSHIP. PROSPERITY. PROGRESS.

ANNUAL RESULTS 200472005

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2005 Annual Results Presentation Rick Curis - CEO

Agenda

• Business Highlights 灦
• Assets under Management 灦
• Financial Details 羉
• Reverse Mortgage Business 羉
• Mortgageport 灦
• Strategy and Outlook 羉

Business Highlights

• Launch of OFM SHERL reverse mortgage products -羉 'Money Magazine' 2005 Best Reverse Mortgage Finalist
• Launch of OFM commercial mortgage trust 'Strong Buy' 羉 rating from InvestorWeb
• Completion of syndication of OFM Direct Property Trust No 1 羉
• Acquisition of three additional investment properties 羉
• Acquisition of initial 50% interest in \$1.08 billion residential 羉 mortgage portfolio of Mortgageport Management Pty Ltd

Group Assets under Management

Asset Class
Cash & fixed interest	710	59
Equities
Listed property
Unlisted property
Mortgages (excl Mortgageport)	185	15
Total

Financial Results Summary

• Net profit after tax of \$7.22 million exceeded forecast 羄
• Increased dividend payout ratio to maintain half year 羉 dividend of 5 cents per share (franked to 20%)
• Final dividend for the six months ending 30 June 2005 of 6 羉 cents per share fully franked
• Total dividend for the year was maintained at 11 cents per 羉 share (franked to 63.64%)
• Dividend Yield of 5.39% 羉

Financial Details

	2004 \$'000	2005 \$'000
Revenue	32,636	31,765
Expenses	20,906	22,478
Profit before tax expense	11,730	9,287
Tax expense	2,066	1,021
Net profit after tax including outside equity interests	9,664	8,266
Outside equity interests	(278)	(1,044)
Net profit after tax	9,386	7,222
Earnings per share	19.2c	14.1 c
Dividends per share	11 c	11c
Dividend franking percentage	95.45%	63.64%
Number of shares at year end	50,928,272	51,679,896
Average number of shares	48,806,316	51,316,210
Tax rate	18.0%	11.0%

Divisional Profit before Tax

Division
	2004 \$'000	2005 \$'000
Friendly Societies	5,538	5,610
Property	2,678	1,907
Mortgages	1,479	547
Insurance Agency	469	724
Investments	1,566	499
Total	11,730	9,287

Balance Sheet Snapshot

	2004 \$'000	2005 \$'000
Current Assets
Cash	59,983	28,337
Other Financial Assets		20,233
Investment Properties		50,002
Mortgages	8,571	10,512
Other	2,388	9,703
Non-Current Assets
Investment Properties	72,821	14,484
Mortgages	2,499	5,809
Other	1,258	1,043
TOTAL ASSETS	147,520	140,123

Balance Sheet Snapshot (cont.)

	2004 \$'000	2005 \$'000
Current Liabilities
Bank loan		35,000
Other	4,331	9,234
Non-Current Liabilities
Bank loan	41,500	8,085
Other	199	375
TOTAL LIABILITIES	46,030	52,694
NET ASSETS	101,490	87,429

Balance Sheet Snapshot (cont.)

	2004 \$'000	2005 \$'000
Equity
Contributed equity	69,936	71,490
Retained profits	14,338	15,939
Total parent entity interest in equity	84,274	87,429
Outside equity interest	17,216
TOTAL EQUITY	101,490	87.429
NTA excl outside equity interest	\$1.65	\$1.69

Key Profit Before Tax Change Drivers 2005

• Revenue 羉
• Interest received up by \$1.3 m B.
• Friendly Society management fees up by \$0.3 m $\mathbb{R}^{\mathbb{Z}}$
• Rental income down by \$1.2 m $\mathbb{R}^+$
• Other property income down by \$2.2 m
• Expenses 灦
• Staffing costs up by \$2.1 m B.
• Admin/funds mgt/finance expenses down by \$1.3 m $\mathbb{R}^+$ (GST not recovered on most expenses, up-front & trailing commission)
• Borrowing costs down by \$0.6 m $\mathbb{B}^{\mathbb{C}}$
• Start-up costs on reverse mortgage business $\mathbb{R}^d$

Key Balance Sheet Change Drivers 2005

• Sale of remaining units in Property Trust \$17 mill 灦 outside equity interest and related property investments and liabilities deconsolidated
• Purchase of Property Investments \$64 mill 羉
• Borrowings related to property purchases \$43 mill 羉

Seniors Equity Release/Reverse Mortgages Business

• Product launched in October 2004 to meet the growing demand 羉 for reverse mortgages. OFM has already established itself a leading provider in the reverse mortgage market
• Range of marketing pilot programs in order to identify the most 鷚 cost effective method of customer acquisition
• Key sponsorships with 3AW and Ernie Sigley promoting 灦 'SHERL' (seniors home equity release loans)
• Primary focus since launch has been on developing 3rd party 鵽 distribution networks through financial planners, mortgage brokers and other financial institutions

Mortgageport

• Markets and sells loans to borrowers directly and through 窗 a network of accountants and financial planners with exclusive agreements
• Initial 50% acquisition for \$6.6m (subject to adjustments) 翻 with right to OFM to acquire remaining 50% in three years
• Business split is approximately 85% origination, 15% 翻 broker
• No credit risk on residential loan book of approx \$1.08 窗 billion
• Upfront fees and trailing commission arrangements with banks and distribution channels
• Average loan size is higher than national average and 糷 with lower than average churn rate
• Provides distribution channel to sell OFM products 翻

Strategic Focus

• Build on OFM's existing capabilities to go deeper and wider into 羉 the two overlapping segments of funds management and financial services
• Growth through acquisitions and organic development of new 羉 products
• Develop a range of funding sources investment schemes, 羅 wholesale financing, securitisation
• Build OFM brand equity 羉
• To be a leading player in reverse mortgages and other chosen ▓ areas, based on the quality of our product, the strength of our distribution relationships and our commitment to the education of our 3rd party introducers and end customers
• The long term vision is to be a dominant provider of financial 《經 solutions to the emerging seniors markets that provide strong growth opportunities

Forecast Outlook in 2006

• Key focus on securing existing products on approved lists 羉 and developing better distribution relationships
• Profitability and dividends expected to be maintained 羉
• Increased marketing and OFM brand awareness 雛 expenditure
• Continued expansion of reverse mortgage business. 羉
• Expect extension of commercial finance business through 羉 wholesale funding lines and joint ventures
• Continue to seek property acquisitions. Syndication market 羉 is now seeking more value added and development opportunities.
• Strong focus on completing acquisition of identified finance 羉 and funds management business opportunities