Centuria Capital Group (CNI) Earnings Call Transcript & Summary

Thank you, and welcome, everybody. Thanks for your time this morning. I'm John McBain, Joint Chief Executive of Centuria Capital Group. With me today is our Chief Financial Officer, Simon Holt; and Bass Salah, Joint CEO and Co-Founder of ResetData. We're also joined by Tim Mitchell and Peter Ho from our Investor Relations and Corporate Strategy team. As looking at Slide 4, today, we're presenting a $300 million fully underwritten equity raising to fund the next phase of growth across Centuria. The offer comprises a $200 million institutional placement and a $100 million accelerated [indiscernible]. At its core, this transaction reflects the continued repositioning of Centuria into a diversified multi-engine earnings platform underpinned by a scaled and compounding real estate platform across both equity and debt and a differentiated AI infrastructure business through ResetData. We're particularly focused on the ResetData opportunity. Everything is now in place to create significant value for Centuria security holders. Following the AI-F1 offtake agreement, our first AI factory, we're seeing increased customer engagement, supporting confidence in the outlook and earnings trajectory. So this raising provides capacity to accelerate the activation of the ResetData pipeline and convert customer inquiries across a 10,000-plus GPU opportunity set. Post this raise, we have created maximum flexibility to deploy capital on the opportunities in front of us. Slide 6. Our core thesis is simple. Centuria and ResetData combined real estate, power and capital with AI compute infrastructure. Centuria provides 25-plus year real estate platform and access to land, capital and power pipelines. ResetData brings specialist AI infrastructure capability and NVIDIA Cloud partner status. Together, this creates a vertically integrated AI infrastructure platform spanning land, power, capital and compute. This is a key differentiator versus traditional data center operators or stand-alone AI players. I have pleasure in handing over to Bass Salah to discuss the near-term 23-megawatt pipeline which this equity raising supports.

Thanks, John. This strategy is not simply about deploying GPUs. It's about building a full stack AI infrastructure platform, spanning capability, land, power and shell, infrastructure, funding and customers. Centuria and ResetData have the components in place to deliver customers and support scalable growth. Against this backdrop, I'll now focus on two areas: customer acquisition and pipeline progression. Demand for AI infrastructure continues to materially exceed supply. We're seeing strong inbound demand for Australian capacity, particularly for 2026 and 2027 deployments. Demand is driven by constraints across the U.S. market, Japan, South Korea and India, to mention a few. This demand spans both hyperscaler and enterprise customers with inquiry volumes accelerating on a near daily basis. We're focused on investment-grade customers, which matches our capacity. And so what does this mean for ResetData? Well, ResetData pipeline spans 4 key capacity buckets, just less than 3 megawatts, 13 megawatts, 7 megawatts of short-term supply and over 200 megawatts in Centuria's portfolio of long-term pipeline. The less than 300 megawatts -- sorry, the less than 3 megawatts of capacity is within Centuria's existing portfolio and is progressing through active customer engagement. We've completed multiple meetings here and in Asia and expect to be able to provide a positive update in the coming months. The 13 megawatts of capacity currently under heads of agreement expiring on the 30th of June but with an extension, we believe we can secure through a very strong relationship with the provider. We're progressing through NVIDIA design certification for the AI factory, which enables us to access demand through the NVIDIA Cloud Partner program. NVIDIA demand is contingent on validated capacity with clear delivery time lines. This is a standard pathway followed by our peers within the NCP ecosystem, and that allows us to secure customers. Once we have that in place, this demand becomes accessible to us via the NCP program, and this is something we are close to landing. The 7 megawatts of capacity is under a negotiated master services agreement, which provides flexibility to procure capacity in stages through purchase orders effectively, starting with the 7 megawatts and scaling with customer demand. This MSA is with one of the largest data center operators and owners in this country and it's also progressing through NVIDIA's engineering review process. And validation enables us again to secure partner-driven demand. Finally, Centuria's 200 megawatts plus pipeline reflects longer-term development in conjunction with Centuria's asset base. This provides forward capacity optionality, which is increasingly important in securing larger and longer-dated customer commitments. The timing for the 13 megawatts and 7 megawatts capacity is weighted to the second half of FY '27 with the 7 megawatts conservatively assumed to extend into FY '28 where required. So the short-term DC capacity in Centuria's pipeline provide a clear pathway to scaling the platform through 2028 and beyond. Slide 8 talks to Australia's first operational sovereign AI factory, which is 1.1 megawatts of capacity. 100% of the initial capacity is leased with the remaining GPUs ordered on the back of emerging enterprise and government pipeline. Once at capacity, AI F1 is expected to generate 15 megawatts of revenue -- sorry, $15 million of revenue. Slide 9 and 10. Moving into Slides 9 and 10. The key constraint in AI infrastructure is power. Our advantage is capability is embedded within Centuria's existing real estate and data center platform. This is not theoretical capacity. It sits within our current asset base with clear pathways to development. This represents a structural advantage, which is difficult to replicate. I'll now hand back to John.

Thanks very much, Bass. Slide 11. Switching to the core real estate. That's what we call a repeatable capital flywheel. We originate transactions, seed them with balance sheet capital, and we raise third-party capital, growing funds under management, obviously generating further recurring fee streams and recycling that capital back into new opportunities. This is a model we've executed consistently over many years, and we're now scaling further up, which will drive higher capital velocity, increased earnings visibility and ultimately, a higher return on equity over time. Critically, this is not limited to real estate. This model extends across AI infrastructure and private credit. Our balance sheet acts as an incubator, allowing us to seed opportunities, scale funds and convert capital into recurring fee income and earnings growth, then recycle it. And this is where the current environment becomes critically important. This raise provides additional firepower to scale both the size and volume of acquisitions, particularly in a market where ongoing dislocation is creating attractive entry points. Turning to Slides 12 and 13. These show how we've been scaling our platform through larger and larger and more complex transactions, including our largest office, industrial and agricultural deployments completed in FY '26. Notably, we're also seeing increasing institutional investor engagement. During the year, we onboarded 4 new institutional investors with one participating across multiple transactions. We see this as an inflection point in the platform. As larger pools of institutional capital are introduced, it enables us to increase transaction size, scale funds more efficiently and accelerate platform growth, which in turn drives higher recurring fee streams, larger and more scalable funds, even, and deeper and more repeat institutional participation. And this is the key point. Scale is the driver of economics in this model. Turning to private credit on Slide 14. The third leg of the platform is private credit. We've scaled this business meaningfully. AUM has grown at a CAGR of 36% since acquiring our initial 50% interest in Bass Credit with AUM now at approximately $2.5 billion. Despite that growth, we remain just at 1% market share in a $224 billion market, which goes to highlight the size of the opportunity ahead. Strategically, this business provides a capital-light scalable growth engine with strong demand tailwinds, supported by strong performance, low impairments and our growing distribution platform. In the current environment, we're seeing increasing dislocation in the lending markets, which creates attractive opportunities to deploy capital at a higher risk-adjusted return. Turning to Slide 15. So, bringing everything together, really, on this slide. This equity raising provides capital to scale across ResetData and our real estate equity and credit platform. While we expect quality growth in our core real estate business, we're enthusiastic about the value creation opportunity for Centuria security holders as we accelerate ResetData. All the pillars are in place and the Reset business is uniquely positioned to capture the upswing in international demand for Australian-based AI factory capacity. We note that comparable neocloud platforms in Australia have experienced rapid reratings as contracts are secured and scale is established. The opportunities we've outlined today are showing clear pathways to earnings growth and very attractive risk-adjusted returns. Critically, our deployment will be staged and demand-led and underpinned by defined return hurdles. This capital enables us to scale across multiple growth platforms, delivering more predictable and scalable earnings while maintaining balance sheet discipline. This concludes today's presentation. Thank you for attending, and we look forward to speaking with you in due course.