CENTURIA CAPITAL GROUP — Capital/Financing Update 2009

Dec 13, 2009

Capital Raising Presentation December 2009 John McBain – Chief Executive Officer & Matthew Coy – Chief Financial Officer

Serving Generations of Australians

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	Offer Summary
	• Undertaking an Institutional Placement (‘Placement’) and Share
	Purchase Plan (‘SPP’) to raise up to $10.5m
	• Proceeds being used to reduce debt ($7.0m), provide working capital
Capital Raising	($3.0m) and pay the costs of the offer ($0.5m)
	• Following the Capital Raising, OFG will be very well positioned to
	pursue attractive organic growth and acquisition opportunities
	• Strong pipeline of potential property purchases and a number of
	property fund managers for sale
	• 15% Placement of c9.0m shares at $0.72 to raise to approximately
Placement	$6.5m
	• Discount of 20.0% to closing price and 19.8% to 5 day VWAP
	• Up to c5.6m shares to raise up to a maximum of approximately $4.0m
Share Purchase	• Pricing is lower of the Placement price or a 10% discount to the 10 day
Plan	VWAP leading up to and including the closing date of the SPP
	• Record date to determine entitlement is 11 December 2009
Lead Manager	• RBS Morgans Corporate has been appointed Lead Manager to both the Placement and SPP

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Overview of the Business

The Offer

Appendices

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OFG – Corporate Snapshot

Key statistics	Key statistics
Shares on issue	60.5m
Share price	$0.90 (8/12/09)
Market cap	$54.5m
Corporate debt	$16.9m (current)
Revenue FY09	$46.1m
Underlying NPAT FY09	$7.2m
Operational Information
Core businesses	Property Funds Management Friendly Society
Employees	50 employees
Substantial Shareholders
Investors Mutual	7.3%
John McBain	6.9%

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Share price graph – 12 months
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Directors and Senior Management
Chairman – Roger Dobson
Managing Director – John McBain
Non Executive Director – Deepak Gupta
Non Executive Director – Peter Done
Exec Director and GM, Property – Jason Huljich
Chief Financial Officer – Matthew Coy
Investment Manager – Sean Webster
05-Dec-08 05-Jan-09 05-Feb-09 05-Mar-09 05-Apr-09 05-May-09 05-Jun-09 05-Jul-09 05-Aug-09 05-Sep-09 05-Oct-09 05-Nov-09 05-Dec-09
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Brief history of OFG

1980	• Over Fifty Friendly Society established
2001	• Demutualised
2002	• Listed on ASX
	Diversified business and established
2002 – 2006
	- Reverse mortgages
	- Residential construction lending
	- Financial planning
	- Insurance
	- Mortgage origination
2006	• Acquired Century Funds Management ($500m FUM)
2007 - 2009	• Change in Management and Board
	• Reduce debt and rationalise operations back to core businesses
Today	• Core business - Property Funds Management and Friendly Society • Other businesses – reverse mortgages, insurance, mortgageport
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FY09 Achievements OFG

� Focus on core businesses of Property Funds Management and Friendly Society

Reduce staff numbers from c100 to c50 �

� Clean up of balance sheet – reduce corporate debt from $24m (FY08) to $16.9m currently � Reduced operating expenses from $18.8m (FY08) to $13.6m (FY09)

� Renewed corporate debt facility with NAB

� Acquired the remaining minority interest in Eclipse Property Group

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Core business – Property Funds Mana ement g

• 1 Century • Established in 1999 • Direct property funds manager specialising in:

  • Commercial Office

  • Industrial (high tech and bulky goods)

• Predominantly Sydney and Melbourne exposure

• No development risk

• 26 unlisted trusts – c1,800 investors (financial planners / platforms and HNW)

• FUM of $668m (30 June 2009)

• Eclipse • Acquired in FY09 • Direct property funds manager specialising:

  • Property with long term leases to government

  • Limited investor occupied high-end residential

• Sydney, Wollongong, Newcastle, ACT, Parramatta and Shellharbour

• 11 unlisted trusts – c300 investors

• FUM of $210m (30 June 2009)

OFG believe Property Funds Management has a strong outlook – significant opportunities being created in the current market

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Core Business – Friendly Society

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2 • Established in 1980
•
Bonds include:
- Australian share bond
- Balanced Bond
- Capital Guaranteed Bond
- Growth Bond
- High Growth Bond
- Income Accumulation Bond
•
110,000 bond and general insurance policy holders
•
FUM of $781m (30 June 2009)
•
Strong recurring revenues and cashflows
•
Two new bond products being launched in 2010 – education and imputation
bonds
•
Proposed changes to Superannuation and Tax Legislation (Henry Tax
Review) likel) likel likely to be a positive for insurance bonds to be a positive for insurance bonds ositive for insurance bonds
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• Two new bond products being launched in 2010 – education and imputation bonds

Review) likel) likel likely to be a positive for insurance bonds

OFG believe the outlook for the Friendly Society is positive – strong cashflows and growth is expected from new products

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FUM from Core Businesses

• FUM has decreased over the past few years – combination of declining values and bond redemptions

• Property values are starting to improve and Property FUM is expected to increase going forward

• Management have successfully slowed bond redemptions and growth is expected from new products

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$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
2006 2007 2008 2009
Property Funds Management (EPG)
Property Funds Management (CFM)
OFG Friendly Society
Funds Under Management ($m)
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Century Trust No 13 – Adelaide (settled Dec 09)

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Strategic Initiatives and outlook

Property Funds Management

Over Fifty Friendly Society

• One of few direct property managers in acquisition mode – fewer competitors

• Maintained a high quality, experienced executive team

• High quality investment property

• Extremely loyal direct investor base and continued financial planner support

• Significant pent-up demand for new direct property trusts

• Recent acquisition for $16m (see picture top left) was closed over-subscribed.

• Substantial opportunity to acquire properties and property fund managers to increase FUM – OFG team well experienced in this regard

• Retaining policyholders by offering more relevant and / or tax effective products

• Enhanced client communication via client seminars regarding switching, strategies and investment markets

• Growing FUM by marketing existing investment products to a range of age groups and leveraging 110,000 client contact list (ie grandparents / parents / children)

• Introducing new products to clients – eg education bonds (relevant to grandchildren) and imputation bonds (relevant for taxation reduction)

• Recent appointment of Sean Webster as a dedicated Investment Manager

OFG has a medium term target of increasing FUM to $3bn...

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Other operations

• 3 • White labeled general, vehicle and travel insurance with over 30 000 policyholders – good expansion capacity available (eg life insurance)

• Over Fifty Group • Plan to leverage wide range of OFG products to this client base for the 1[st] Insurance time also potential for Guardian F/Society members to participate

4 Reverse Mortgages 5

• Lending suspended and existing book of $208m is being managed

• Loan agreement re warehouse funding from ANZ in place

• Expenses attributable to this business reduced dramatically

• Mortgageport is a 50% owned associate of OFG

• Operates in the highly competitive residential mortgage manager market

Mortgageport

• In house credit approval authorities from Interstar and Adelaide Bank

• Mortgage book was $820m at 30 June 2009 with strong performance in customer retention

Insurance and Mortgageport are profitable operations both with excellent growth potential. Reverse Mortgages is non-strategic but profitable and it will be reviewed when securitisation markets re-open...

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Overview of the Business

The Offer

Appendices

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FY10 Guidance and Financial Impact of the Capital Raising

�

Impact on Gearing

• Strengthened Balance Sheet provides substantial financial flexibility going forward

• Reduce gearing (core debt / core assets (including intangibles)) from 15% to 9%

• Improve annualised interest coverage {on Corporate debt only} (EBIT / Net interest exp) from 8.4x to 18.0x

• Improve Net Debt to EBITDA, from 1.4x to 0.8x – {it should be noted that 24% of the group EBITDA is made up of non-cash flow profit from reverse mortgages}

�

Impact on Profitability

• Revised NPAT guidance of $6.3m ($6.5m annualised) – up from $6.0m (after impact of capital raising)

• Equates to FY10F EPS of $0.086 per share

• Based on the Offer Price, represents a PE ratio of 8.3x

• No dividend is expected for the 1[st] half of FY10

• OFG expects to pay a final dividend for FY10 – amount to be confirmed over the next 3 months

• OFG’s dividend policy is to pay up to 60% of NPAT in any period

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Performance & FY10 Guidance

		Profit & Loss - $m	FY08A	FY09A
		Revenue	51.2	46.1
		EBITDA	14.6	11.1
		EBIT	14.2	10.5
		Net Interest Expense	1.5	1.7
		Pre-tax Profit	13.4	8.8
		Tax Expense	5.4	1.7
		NPAT - Underlying	8.0	7.2

Key Points on historical performance

• Revenue FY09 has no property transactional revenue.

Segmental Performance - $m	FY10 “revised” Guidance
Property Funds Management	3.6
Friendly Society	8.5
Other Business Divisions	3.1
Corporate Costs	(3.5)
EBIT	11.7
Net Interest Expenses	(1.1)
Pre-tax Profit	10.6
Tax Expense	4.3
NPAT - Underlying	6.3

Key Points on forecast performance

• PFM assumes one further property acquisition and one disposal fee in addition to set recurring revenue.

• YTD performance is tracking comfortably to guidance.

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Pro Forma Balance Sheet

		30 June 2009 Balance Sheet – $m		Over Fifty	Adjustments	Pro forma*
		Cash, Cash equivalents and debtors		13.7	3.0	16.7
		Other Current Assets		1.5		1.5
		Non Current Assets Reverse Mort		215.0		215.0
		Book ***
		Non Current Assets (tangible)		83.4		83.4
		Non Current Assets (intangible)		52.6		52.6
		Total Assets		366.2	3.0	369.2
		Current Liabilities		6.0		6.0
		Non Recourse Debt Properties		47.3		47.3
		Non Recourse Debt Reverse Mort
		Loan***		195.0		195.0
		Interest Bearing Debt		19.8	(7.0)	12.8
		Non Current Liabilities		19.7		19.7
		Total Liabilities		287.8	(7.0)	280.8
		Net Assets		78.4	10.0	88.4
		Shares on issue		60.3		75.1**

• Assumes $10.5m gross equity raising with offer costs of $0.5m

** Assumes 0.2m shares issued pursuant to Executive Remuneration Plan, 9.0m shares issued pursuant to Placement and 5.6m shares issued pursuant to SPP

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Summary

Management have taken the steps required to reposition OFG for growth...

• Strong committed management team with large holding in OFG

� Strong diversified recurring cash flow underpinned by FUM

� Achieved a substantial reduction in operating costs

� Reengaged with policy holders and established a strategy for growing Friendly Society

� Leveraged to expected improvement in property and financial markets

� Strong balance sheet for future growth opportunities

� Strong pipeline of property purchases and property fund managers are for sale

The future for OFG is very positive and the capital raising represents an excellent opportunity for investors to participate in the value that will be created over the medium term ...

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Placement

Placement offer	�$6.5m institutional placement
size	– 15% of issued share capital
	�Fixed offer price of $0.72 per share
Placement offer price	−20.0% discount to closing price on 8 December 2009
	−19.8% discount to 5-day VWAP
	�Trading halt – 9 – 10 December 2009
	�Books open 10am on 9 December 2009
Timing	�Books close noon on 10 December 2009
	�Settlement on 18 December 2009
Lead Manager	�RBS Morgans Corporate Limited

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Share Purchase Plan

Eligible	�Australian shareholders registered at the record date of 11
Shareholders	December 2009
SPP Amount	�Up to $4m �Scaling to apply in the event of oversubscriptions
	�SPP Offer Price is the lower of:
SPP Offer Price	−the placement price, being $0.72 per share; or
	−10% discount to the VWAP over the SPP Pricing Period
	�SPP Offer opens 15 December 2009
Timing	�SPP Pricing Period: 5 January 2010 – 18 January 2010
	�SPP Offer closes 5:00pm 18 January 2010
Application	�Subscriptions will be for up to $15,000 worth of OFG shares
amount
Other	�No brokerage or transactions costs �Stamping fee equal to 1.5%

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Timetable

Key dates – Placement
Trading Halt	9–10 December 2009
Institutional bookbuild opens 9 December 2009 10:30am (AEST)
Institutional bookbuild closes 10 December 2009 Noon (AEST)
Placement details announced and shares recommence trading 11 December 2009
Institutional settlement 18 December 2009
Allotment of placement shares 21 December 2009
Key dates – SPP
Record Date for determining entitlement to SPP 11 December 2009
SPP Offer despatched to eligible shareholders & SPP Offer opens 15 December 2009
SPP Pricing Period 5–18 January 2010
SPP Offer closes 18 January 2010
Allotment of SPP shares 25 January 2010

This timetable is indicative only. OFG reserves the right to close the book early.

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Overview of the Business

The Offer Appendices

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Appendix 1

Reduction of Operating Expenses

(major expense reduction for 12 months 30 June 2009 v 30 June 2008)

Staffing	6,888	8,862	(22.3%)
Consulting and Professional(1)	2,579	4,259	(39.4%)
Corporate Operating Expenses	923	979	(5.7%)
Marketing, Sales and Advertising	1,141	1,935	(41.1%)
Information Systems Expense	480	585	(18%)
Rental Expense – operating leases(2)	534	603	(11.5%)
Other	1,065	1,588	(33%)

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General risks for OFG

Appendix 2 Key Risks

• Changes to government policy – OFG, through its different business divisions, is subject to a wide range of legislative rules and regulations. These rules and regulations can change and it is possible that changes in government policy could adversely impact on OFG’s performance.

• Interest rate risks – changes in interest rates can have a positive or negative impact directly or indirectly on OFG and its policyholders investments

• Counterparty credit risk – OFG through its investments has a range of exposures to counterparties. There is a risk that if counterparties fail to perform as contracted, OFG may be exposed to losses.

• Investment risk – OFG invests in a range of investment classes. There is a risk that these investments may not perform as anticipated and OFG could suffer losses as a result.

• Reputational risks – OFG’s property funds management division and friendly society invest in a wide range of investment assets. There is a risk some of these investment may result in losses which could adversely impact on OFG’s reputation and cause further losses through redemptions in OFG’s property FUM or friendly society.

• Impairment risk – OFG has a large number of assets on its balance sheet (including reverse mortgages, property holdings) that are subject to regular impairment testing by auditors and external valuers. There is a risk that OFG may suffer losses as a result of impairments.

Risks for the Friendly Society

• Ability to continue to slow historical Friendly Society redemption rate. Initiatives already in place have slowed redemptions significantly. These include better and more communication to policyholders regarding returns and investment switching, policy holder seminars and simply better returns as a consequence of improved investment process. FY09 redemptions were affected negatively in Sept/Oct 08 as a result of government guarantee on retail bank deposits, this was “one –off”.

• Ability to introduce new Friendly Society products to stabilise and increase Friendly Society FUM. - New tax effective Education bond “Sprout “ being introduced in early 2010. Recent restrictions and further proposes restrictions to Superannuation contributions and eligibility have refocused attention on tax effective Insurance Bonds. An Imputation bond will be launched in calendar 2010 to take advantage of this and to capitalise in a possible reduction in corporate tax rates/friendly Society tax rates.

• Henry Tax Review changes to taxation – The above Tax Review is likely to make significant changes to taxation at both the corporate and personal level as well as to investment products. As the conclusions of the review are unknown it is possible that some of them could be negative regarding the attractiveness of Insurance Bonds as savings vehicles or the outlook for the property market or property funds management generally. Early indications however are that changes will be positive for the relative attractiveness of Bonds and benign in relation to property.

Risks for the Property Funds Management Division

• There are a number of factors that could aversely impact OFG’s performance. These include factors affecting investment property valuations including capitalisation and discount rates, growth outlooks, supply and demand, economic factors, environmental

• issues, native title claims, land resumptions and major infrastructure developments.

• Changes in market conditions for investment properties may impact OFG’s assets held for investment, including vacancy rates, rental rates, incentive levels, and tenant default, potentially adversely affecting OFG’s ability to achieve sales or reducing the income and carrying value of OFG’s assets.

The above should not be taken as full list of the risks that OFG is subject to.

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Disclaimer

• This presentation has been prepared by Over Fifty Group Limited ( OFG ) and is intended to provide preliminary background corporate, financial and other information to enable investors to review the recent activities of OFG and to consider participating in an offer of ordinary shares in OFG ( Offer ).

• This presentation does not constitute an offer, invitation, solicitation or recommendation to apply for the Offer. Nothing in this presentation will form the basis of any contract or commitment, or constitutes investment, legal, tax or other advice. This presentation is provided to you on the basis that you are a person to whom the Offer would not require disclosure under Part 6D.2 of the Corporations Act 2001 (Cth) because you are a "sophisticated investor" for the purposes of section 708(8) or a "professional investor" for the purposes of section 708(11). If you are not a sophisticated investor or a professional investor, you are not authorised to consider the information contained in or accompanying this presentation.

• This presentation should not be relied upon as a representation of any matter that a potential investor should consider in evaluating OFG or the Offer. This presentation is not, and should not be considered to be, the provision of financial advice.

• No representation or warranty is made in relation to the accuracy, reliability or completeness of the information contained in this presentation or any other information accompanying this presentation concerning OFG or the Offer. To the maximum extent provided by law, no responsibility nor liability for any loss or damage (whether direct or indirect and including for negligence) is accepted by OFG, RBS Morgans Corporate Limited or any of their respective affiliates or related bodies corporate or the representatives, directors, officers, employees or professional advisers of any of them, for any information provided in or omitted from this presentation for any action taken by a recipient on the basis of that information.

• No representation or warranty is given as to the accuracy, reliability, completeness, likelihood of achievement or reasonableness of any forecasts, projections, forward-looking statements or prospects contained in this presentation. Such matters by their nature are subject to significant uncertainties and contingencies. You should make your own independent assessment of the information set out in this presentation and seek your own independent professional advice in relation to the information and any investment decision you make based on that information.

• The information contained in this presentation is provided in confidence and may not be reproduced or disclosed to any other person.

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