Region Group

Thank you very much and welcome to our first half FY26 results for Region Group. My name is Anthony Mellows. I'm the Chief Executive Officer. Presenting these results with me today is David Salmon, our Chief Financial Officer. Also in the room with me is Erica Rees, our Chief Operating Officer. I'm really pleased with this set of results. We have increased our earnings growth, which is underpinned by some really strong operational results and our fully hedged interest position. Let me take you to slide four, which sets out our first half FY26 highlights. Our funds from operations or FFO was 7.9 cents per security, which increased by 3.9% from December 2024. The distribution per security was 6.9 cents per security, which was the same as our adjusted funds from operation, or AFFO, which increased by 3% from December 2024. Our statutory net profit after tax of $180 million, including an increase in the fair value of our investment properties. Our assets under management has increased by 3.9% from June 25 to $5.4 billion. Our operational metrics remained resilient. Our comparable MAT growth was 3.1% per annum. Our average annual fixed rent reviews were 4.3% per annum. Our average specialty leasing spreads were 3.4% and our comparable NOI growth was 3.7%. With respect to capital management, our weighted average cap rate had firmed by 10 basis points to 5.87% since June 25. We've continued the on-market security buyback program. 6.7 million securities have been purchased during the half year at an average price of $2.39, for a consideration of around $16 million. And our NTA per security has increased 3.6% to $2.56, off the back of that valuation growth. Our weighted average cost of debt of 4.6% per annum, with 100% of debt hedged or fixed for FY26 at an average rate of 2.89%. Slide 5 remains unchanged. Our strategy is to provide defensive, resilient cash flows to support secure, growing and long-term distributions to our security holders. Moving to our operational performance, which starts with our portfolio overview on slide seven. Our occupancy has improved to 97.7%, up 20 basis points, with the continued strong weighting towards those non-discretionary tenants. 45% of our gross rent is attributable to our anchor tenants, and 55% of our gross rent is to specialties and mini-majors with a focus on food, liquor, retail services, pharmacy and healthcare. We have 87 centres that are owned 100% by region, which are geographically diversified across Australia. Moving to slide 8, our positive sales momentum continues across our non-discretionary categories. Our 3.1% comparable MOT growth is driven by supermarkets at 3.1%, our discount department stores at 3.7%, our mini-majors at 1.7%, non-discretionary specialties at 3.3% and our discretionary specialty tenants improved to 3.6%. Our specialty sales productivity is now at $10,265 a square metre. As with the majority of the market, we have excluded tobacco sales consistent with our June 25 results. Our supermarkets continue to demonstrate resilient growth as shown on slide 9. We continue to capital partner with our anchor tenants to drive sales growth with over 53% of supermarkets generating turnover rent. We have 123 anchor tenants contributing 45% of our gross rent. 76 direct to boot and e-commerce facilities. 97% of stores have online sales included in the turnover rent calculation. And as I said earlier, there was 3.1% supermarket-comparable MAT growth. And the turnover rent generated from 52 anchor tenants with a further 20 anchor tenants within 10% of that turnover rent threshold. Moving to slide 10, over 88% of gross rent is generated from non-discretionary tenants. Our portfolio occupancy of 97.7% is up from 97.5% as at June 25. Our specialty vacancy has improved to 4.5% as at December 25, compared to 5.4% at June 25. Our portfolio whale decreased slightly by 0.1 years to 4.8 years. Our average specialty rent increases to $930 per square metre, representing annualised growth of 5% since December 2022. Our average specialty annual fixed rents remain strong at 4.3%, and these were applied across 96% of our specialty and kiosk tenants. 79% of expiring tenants were retained, which helps to minimise leasing capital expenditure and downtime. Moving on to slide 11, proactive leasing continues to drive increased leasing spreads across the portfolio. Our specialty leasing benefited from slightly increasing annual fixed rent reviews and positive leasing spreads. We completed 177 specialty leasing deals with 3.4% average leasing spreads, a positive uplift on prior December periods. Strong performance from new leases with an average leasing spread of 7% while renewals were relatively flat. The average annual fixed rent reviews increased from 3.9% in December 23 up to 4.3% in December 25. Our leasing incentives on new deals averaged 12.3% and this is aligned with our 12-month leasing incentive for new tenants. Moving on to our sustainability update on slide 12. We're on track to reach our net zero for scope one and two greenhouse gas emissions by FY30 and continue to make a positive impact in the local communities which we serve. We continue to progress towards our sustainability targets, which are spelt out in our annual sustainability report. The key focus has been on environmental, progressing with our net zero investment during the period, contributing to our solar rollout target of having 25 megawatts installed in construction or design on region assets by the end of FY26. and social, we continue to make a real positive impact in the communities that we operate in and have undertaken a number of community initiatives, including the Uniform Exchange Program at Roman Terrace in Newcastle. We also continue to sponsor 128 students through the Smiths Families Learning for Life Program. And with respect to governments, our alignment to the ASRS is on track for our FY27 reporting. I'll now hand over to David, who will talk through our financial performance.

Thanks, Anthony, and good morning, everyone. I'll start on slide 14, where we highlight the key drivers of the movement in our funds from operations, which has had strong earnings growth in the first half of FY26, partially offset by an increase in the weighted average cost of debt. Our FFO for the first half of 2026 is 7.9 cents per security representing growth of 3.9% from December 2024. There were positive contributions from the comparable portfolio NOI growing by 3.7% and the impact of our transactional activities and growth in funds under management. The FFO growth was offset by the previously flagged weighted average cost of debt increase from 4.3% to 4.6% during the period. Moving to slide 15, where we provide further information on our financial result for the half. As mentioned, our funds from operations were 7.9 cents per security. Our adjusted funds from operations came in at 6.9 cents per security, an increase of 3% from December 2024, after additional capital this period from the leasing up of vacancies. Our distribution for the period represented a 100% AFFO payout ratio in line with guidance. Comparable NOI growth was 3.7% with moderating property expenses as well as specialty annual fixed rent reviews and positive leasing spreads. Four year comparable NOI growth guidance remains at around 3.3%. Total net operating income has grown by 5.3%, driven by the aforementioned comparable NOI growth, cost reduction phasing from the prior period, lower ECL compared to the mosaic impacted prior period, and completed developments NOI, partially offset by net asset disposals. There was strong growth in funds under management income supported by funds management platform expansion during the period. Corporate expenses were impacted by cost phasing in the prior period, with costs in line with the FY25 average over the year. Statutory profit for the period is $180 million, following an increase in the fair value of investment properties. Moving to slide 16. As of December 2025, our total assets under management was $5.4 billion. This is a 3.9% increase from 30 June 2025 with investment property valuation growth and an increase in funds under management. NTA per security is $2.56, has increased by 3.6% from June 2025, driven by a fair value uplift on investment properties. Our balance sheet remains healthy with gearing of 32.7 at the lower end of our target range. This provides us with the capacity to deploy capital when opportunities arise. 6.7 million securities were purchased during the half year at an average price of $2.39 for a consideration of 16 mil as part of an on-market security buyback program. Since the announcement of the buyback program in April 2025, 8.9 million securities have been bought back at an average price of $2.37 for a total consideration of $21 million. Slide 17, our property valuation movement shows cap rate compression and continued income growth driving the valuation increases. During the period, our portfolio increased by $129 million. The movement was driven by a $92 million fair value increase and $37 million in capital expenditure. Capitalisation rates have firmed by 10 basis points since June 2025 to 5.87%, on top of the 10 basis points firming in the second half of FY25. We have 3 per cent fair value increases since June 2025, with approximately 1.7 per cent driven by cap rate compression and the remainder being valuation and NY growth over the six-month period. On to slide 18, where we talk to our funding. In November 2025, we issued a successful six-year, $300 million Australian dollar medium-term note. We saw significant interest from both offshore and Australian debt investors with the final order book being 3.6 times oversubscribed. This strong demand allowed for the transaction to be priced with favourable borrowing margin of 1.22%. Proceeds from the MTN issuance were used to repay bank debt. We have total debt facilities of $1.9 billion with around $355 million of funding capacity available for us to draw on. We have no debt expiries until FY28 and we have strong interest from both new and existing banks to enter into new facilities. Our weighted average cost of debt increased from $4.3 to $4.6 over the first half and we expect this to decrease slightly to 4.5% for the full year. Moving on to slide 19. Our strong hedging across FY26 to FY28 provides stability and reduces exposure to near-term interest rate changes. We have high hedging levels with 100% of debt hedged or fixed in FY26 at an average rate of 2.89%. We remain highly hedged in FY27 and FY28 with 87% and 70% of debt hedged or fixed in those respective years. This mitigates the impacts of any near-term rate increases, which the RBA has now commenced and is expected to continue. Our average hedged fixed rate over the next three years of around 3%, which is well below forecast market rates. I'll now hand back to Anthony to talk through our value creation opportunities.

Thanks very much, David. Turning on to slide 21. We maintain our disciplined approach to continue to pursue high-quality opportunities that align with our long-term strategy. In January 26 we settled on the acquisition of Treandale Home and Lifestyle Centre for $53 million at a 6.4% initial yield. It's a large format retail centre strategically located directly opposite our existing centre at Treandale Shopping Centre. And this also allows some improved management efficiencies. The centre also has a district centre and urban zoning, providing the ability to house additional retail, such as additional supermarkets, into the future. We remain the largest owner of convenience-based centres, with a proven transactional track record that allows us the opportunity to continue to consolidate this very fragmented market. Slide 22 highlights the targeted reinvestment and increased development spend to drive earnings and portfolio performance. The table shows the first half FY26 actual and FY26 forecast indicative spend on our capital deployment program. In the first half of FY26 we spent $32 million and for the full year of FY26 we expect to spend around $65 million. This forecast has increased by roughly $15 million which is mainly driven by development projects relating to centre expansions across North Orange in New South Wales, Newcastle Market Town in Newcastle and Greenbank in South West Brisbane. Moving on to slide 23 for funds management. Our Metro Fund continues to be a platform for growth with two new acquisitions. We sent Metro Fund, settled on the acquisition of Dalliapp Shopping Centre in Western Australia for $36 million in November 25. growing our funds under management by 5.7% from June 25 to $752 million. The Metro Fund also exchanged on the acquisition of three additional strata properties valued at $89 million at West Village in Brisbane in Queensland. which is driving further growth through these strategic acquisitions. Two of these strata properties have already settled in January 26 and the remainder strata is due to settle by June 26. David will now talk through our AFFO growth target.