RURAL FUNDS GROUP — Capital/Financing Update 2020

Apr 19, 2020

20 April 2020

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ASX Release

Subject: Marketing of the Mooral orchard and confirmation of guidance

Rural Funds Management Limited (RFM), as responsible entity for the Rural Funds Group (ASX: RFF) advises CBRE have been appointed to market the Mooral almond orchard.

The decision to market Mooral follows recent favourable comparable sales. If Mooral is sold, proceeds are expected to be redeployed in-line with RFM’s strategy to acquire assets with higher earnings potential and that improve climatic diversification. The acquisitions are likely to be in northern Australia, in the macadamia and cattle sectors.

Capital management

RFF’s gearing and loan to value ratio (LVR) remain well within their respective limits. Pro forma gearing is 29.3% (target range 30-35%) and the pro forma LVR is 41.0% (covenant 50%), not factoring in the potential sale of Mooral.[1] Due to the stability of agricultural asset values and the performance of the sectors in which RFF is invested RFM considers present gearing and LVR levels to be appropriate.

Confirmation of forecasts

Following the Unitholder meeting on 14 April 2020, RFM confirms increased forecast adjusted funds from operations of 13.5 cpu (FY20). Forecast FY20 distributions per unit (DPU) of 10.85 cents and FY21 DPU of 11.28 cents remain unchanged.

Note:

1. 31 December 2019 gearing and LVR pro forma for: WA cattle properties settled Feb 2020 ($22.6m), Wattlebank settled Jan 2020 ($1.8m), Swan Ridge South settled Mar 2020 ($1.6m), Riverina Beef feedlot forecast to settle May 2020 ($11.4m), $41.7m cash balance and (only impacting LVR) $7.5m additional Guarantee.

About Rural Funds Group (RFF)

RFF owns a diversified portfolio of high quality Australian agricultural assets. RFF’s investment objective is to generate a stable income stream derived from leasing its assets to suitable counterparts and capital growth through any appreciation in the value of those assets. RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805), trading under the ASX code ‘RFF’.

Authorised by:	For further information:
David Bryant	James Powell	Tim Sheridan
Managing Director	General Manager - Investor Relations & Marketing	Chief Operating Officer
Rural Funds Management	Rural Funds Management	Rural Funds Management
T 02 6203 9700	T 0420 279 374	T 0400 634 230
E DBryant@ruralfunds.com.au	E JPowell@ruralfunds.com.au	E TSheridan@ruralfunds.com.au