Centuria AGM Chairman and CEO Addresses

2011 Annual General MeetingChairman & Chief Executive Addresses

Centuria Capital Limited Melbourne, 28 October 2011

Centuria Capital Limited 2011 Annual General MeetingChairman’s Address

Centuria Capital Limited

2011 Annual General Meeting

I would like to welcome shareholders to the 2011 Centuria Capital Limited Annual General Meeting, including those shareholders attending by video-link in our Sydney office. We really do appreciate you attending this meeting and showing an interest in Centuria.

The primary focus for Centuria Capital in the 2011 financial year has been our commitment to strong company growth.

A clear example of the implementation of this strategy is the successful growth in our property funds management activities. During the year, the property division purchased two commercial investment properties for new property funds and we effectively took over the management of two former Becton property funds.

Jointly these transactions generated in excess of $300 million of growth in funds under management and for the first time property funds under management exceeded $1 billion and total group funds under management rose 16% to over $1.9 billion. I will come back to discussing our growth strategy shortly.

When I look back over the financial year just finished, I would have to say that one of our successes was the completion of the rebranding of the majority of business units under the “Centuria” brand. You will recall that there was a lot of discussion at last year’s AGM when the change of name from Over Fifty Group to Centuria Capital was put to a vote. The change was overwhelmingly approved by shareholders and so now the listed parent company is Centuria Capital Limited ASX code “CNI”. Accordingly, the main operating divisions are now Centuria Life, which encompasses our friendly society activities, and Centuria Property Funds, which is our property funds management business.

I will only comment briefly on our 2011 financial year results because your CEO, John McBain, will discuss them in his presentation shortly. Our underlying earnings before interest and tax were $10.5 million and we declared a dividend of 6 cents per ordinary share year, an increase of 20% over the 2009/2010 dividend. We also took the decision to book an $8.0 million impairment to the carrying value of the company’s legacy holdings in three investments, all committed to prior to 2007. As I said, John will discuss these results in more detail shortly.

I’d like to spend just a bit more time talking about the direction Centuria is heading. At last year’s Annual General Meeting I spoke of the work we were doing to reposition Centuria to a more growth-oriented strategy. That repositioning has continued and in the past 12 months we have made several senior management appointments, all of which are intended to give us the capability and resources to be able to execute our growth strategy. So in the last 24 months or so, we have gone from a company which was focussing on downsizing by necessity because of market and legacy issues, including high

Melbourne, 28 October 2011

2011 Annual General Meeting Chairman’s Address



corporate debt, to investing in our people and our business to enable substantial growth. You saw some of our growth strategy executed with the acquisition of the 2 Becton funds I mentioned earlier. As some of you know, we unsuccessfully tried a similar approach earlier this year to acquire some of the property funds managed by another property fund manager. We are continuing to look at acquiring other property funds or management rights.

However, our growth strategy and investment is not confined to our property funds management business. It extends in particular to our friendly society business.

While the difficult market conditions present us with opportunities to make acquisitions at much lower prices than was the case pre-GFC, those market conditions also give rise to significant delays and risks in executing or completing large acquisitions. Nevertheless, achieving significant growth is a key strategy for Centuria and that is something which your Board and the senior executives of the Company understand.

Finally, I would like to thank my fellow directors, the senior executive team and all of our staff for all of the hard work during the last year and I now wish to hand the microphone over to our Chief Executive Officer, John McBain.

Roger Dobson28 October 2011


Roger Dobson Chairman LLB (Hons) LL.M

Centuria Capital Limited 2011 Annual General MeetingChief Executive’s Address



Thank you Mr Chairman.

Today I want to update you on the performance of Centuria Capital for the year to 30 June 2011 and our outlook for the future.

By 2010, all restructuring was behind us including the elimination of 35% of corporate expenses during the 2008 to 2010 period and Centuria is now well positioned with strong recurring underlying earnings and low levels of debt. We have created a strong, stable platform.

As our chairman has stated, the over-arching strategy for the company is to achieve growth in what we forecast to be ongoing turbulent financial markets. These markets have produced tough trading conditions all round and not all businesses will weather the storm undamaged. Along with our day-to-day trading activities, to execute our expansion plans we will continue to use the relative strength of Centuria to acquire these weaker businesses provided they are accretive to us.

In summary, what we have done as a company is try to find a way to take advantage of these difficult market conditions, rather than use them as an excuse for mediocre performance. It is not an easy strategy and we have been the under bidder on several large opportunities since I last addressed you. However, as we have predicted, opportunities continue to present themselves and we simply need to duplicate the type of success we recently achieved with the ex Becton funds to meet our goal.

We are growing Centuria into a larger financial services business and while our commitment to this goal is clear, the Board has set high targets and there is much more to do.

This year we successfully re-branded the Over Fifty Group to Centuria Capital including the consolidation of our major divisions, Centuria Property Funds and Centuria Life under this brand. This has been an important component of focusing the markets attention on the company as a whole rather than a series of different brands with no apparent connection.

Finally, we have made important investments in systems and key staff during the year and whilst this has been at the expense of some profitability, they are essential components of our ongoing growth platform. We need experienced and motivated people throughout the business to achieve the targets I have discussed above.

Key Business Highlights during the year include:• Group Funds Under Management (FUM) increased 16% • Centuria Property Funds FUM increased 40%• Full year dividend up 20% to 6.0 cents per share• Underlying earnings EBIT of $10.5 million and corporate gearing below 10%


2011 Annual General Meeting Chief Executive’s Address



I will now hand over to our CFO, Matthew Coy who will provide a more detailed financial commentary. Thank you Matthew.

Before moving on from financial results I want to discuss one issue in further detail.

During the 2010/2011 financial year we took the decision to book an $8.0 million impairment to the carrying value of the company’s legacy holdings in three investments, all committed to prior to 2007. The impairments relate to the 50% interest in Mortgageport Pty Limited and two non-core properties which had been held on balance sheet for a considerable time.

The impairments are non-cash in nature and did not impact on our ability to distribute dividends. Ultimately the fact that the assets were inherited has no bearing on our responsibility to mark them to market and we are confident that this effectively deals with last of the legacy issues.

Centuria Property Funds performed strongly during the period, establishing two new property funds totalling $68 million. Centuria is one of a handful of property fund managers which have weathered the GFC and are able to attract debt and equity to take advantage of historically low investment property values.

In December 2010 Centuria was awarded the management rights for two property funds totalling $240 million, bringing total property funds under management to $1 billion for the first time, and making Centuria one of the top 3 unlisted property fund managers in Australia. During the 2010/11 year only six months of additional management fee revenues were reported from this acquisition and of course this year we will book a full 12 months revenue.

Centuria Life, our core Friendly Society management business, continues to generate stable, strong returns for the group, and year-on-year underlying earnings contribution for the division rose 2.4% to $9.14 million, with funds under management at year end of $736 million. Friendly Society funds under management have remained quite stable given the turbulent financial markets experienced during the year.

We have appointed a highly experienced Head of Distribution and our goals for this business are to achieve a stable platform of funds under management and in particular, to highlight the attractiveness of our capital guaranteed investments in the present highly volatile investment markets.

Our other financial services businesses also reported strong recurring earnings. Over Fifty Insurance recorded an underlying earnings contribution of $1.04 million and our reverse mortgage operation earned an underlying earnings contribution of $3.5 million – both up slightly on the 2009/10 year.

I want to speak briefly about investor initiatives we have undertaken during the year:

The past few years have been tough for investors and this hardship has brought about a degree of mistrust towards the funds managers in general. We believe that fund managers need to recognise this situation and rebuild trust with the investing community.




To give you just one example, within our property funds management business we have made significant changes to our recent investment products which all give investors more control over their investment. These changes include more realistic voting rights if investors wish to change their manager and stricter testing of performance fees.

In addition, Centuria property investors now receive quarterly updates and each property fund has regular investor dial-in sessions where investors gain direct access to their fund manager and senior staff. These initiatives enhance Centuria’s reputation for professionalism and fair dealing and during 2010/11 we received investment inflows from several new institutional sources.Shareholders may also have noticed that this year we provided a detailed financial commentary with our notice of meeting; we want to ensure we give shareholders clear information about the company’s activities.

Two of the resolutions before you today deal with the re-election of directors.

Mr Peter Done has served as a board member and chairman of our audit committee since 2007 and I am very grateful for the dedicated service he has provided the company. We value Peter’s counsel and I am very pleased he has made himself available for re-election.

Mr Jason Huljich is standing for re-election today. Jason has been responsible for the Centuria property funds management business since 2006 and it has grown under his stewardship to exceed $1 billion in funds under management. I have had the privilege of working alongside Jason for 16 years continuously and Jason’s drive and capacity for hard work are unquestioned.

I commend both of these fellow directors to you for re-election.

The outlook for financial markets in the 2011/12 year is one of continuing market volatility. We believe this volatility will continue to make the stable, low risk returns generated by our property funds and financial services businesses attractive. In addition, these markets favour our continued growth by acquisition strategy and we are looking forward to reporting our successes to you.

We know that our growth strategy will work best in the current market conditions and we can assure you we are in just as much of a rush to implement a major expansion as all of you are. We can also assure you that any further investment will be calculated and accretive in terms of shareholder value and that corporate debt will not exceed reasonable levels.

For 2011/12 we will continue to operate our strong core businesses to provide a reliable profit base and utilise our entrepreneurial skills to add the extra growth which will provide greater scale and value.

John McBain28 October 2011

John McBain Chief Executive Officer Dip. Urban Valuation

2011 Annual General Meeting Chief Executive’s Address



Matthew Coy, Chief Financial Officer Melbourne, 28 October 2011

2011 Annual General MeetingFinancial Commentary

Property FUM increase by 40% during financial year$1 billion property FUM milestone achieved Total group FUM increased by 16% to $1.93 billion

Rebranding to Centuria completed - core divisions now share common branding

Underlying FY11 - EBIT $10.5 million, NPAT $6.4 millionCenturia Life underlying Net Profit steady (+2.4%)

Full year dividends of 6.0 cents per share partly franked to 30% representing a 20% increase over 2009/10 financial year

Corporate gearing remains low at 8.9% (excluding non recourse debt and convertible notes)

2011 Financial Year Highlights

Realising our Growth Strategy

Brand Consolidation

Underlying Earnings

Increased Dividends

Strong Financial Position


2011 Annual General Meeting 2Information in this presentation is general information only. Before you make any decision in relation to your investment, we recommend that you obtain financial advice from a licensed financial adviser.

,

Underlying net profit by major division

- Centuria Property Funds

- Centuria Life

- Reverse Mortgages

- Insurance

- Corporate

- Other (Property Investments/ Commercial Mortgages/ Other Divisions)

Total underlying net profit

Underlying tax expense (i)

Underlying earnings after tax

(i) Tax expense excludes the $3.6 million tax benefit of the one-off adjustments in the 2011 financial year.

$000’s

5,378

8,925

3,130

1,011

(6,204)

(1,049)

11,191

(3,357)

7,834

2010

$000’s

4,755

9,137

3,495

1,037

(8,601)

697

10,520

(4,163)

6,357

2011Year ended 30 June 2011



Underlying Results (excl. Benefit Funds)



Significant and Non-recurring Items (excl. Benefit Funds)

,

Underlying earnings after tax

Non-recurring adjustments

- Prior year non-recurring adjustments (including tax effect)

- Impairment of investment in associates (Mortgageport and CBGF)

- National Leisure Trust write-downs

- Funds spent on Opus 21

- Rebranding costs

- Reverse Mortgages Break-cost adjustments

- PY reversal of executive options

- Tax benefit on 30 June 2011 non-recurring adjustments

Reported net (loss) / profit after tax

$000’s

7,834

(1,516)

-

-

-

-

-

-

-

6,318

2010

$000’s

6,357

-

(3,933)

(6,787)

(575)

(532)

(1,256)

221

3,614

(2,891)

2011Year ended 30 June 2011



Revenue Growth from Core Divisions

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

$ millions

Reverse Mortgages (NB: Gross contribution margin)

Insurance Agency

Centuria Life

Centuria Property Funds

Revenue from Core Divisions(excludes corporate and non-core)

2009 2010 2011



Underlying Pretax Earnings from Core Divisions - (excludes non-core and corporate)

Underlying Pretax Earnings from Core Divisions -

20

15

10

5

0

-5

2009

$ millions

2010 2011

Underlying Pretax Earnings by Core Divisions(excludes corporate and non-core)

Reverse Mortgages

Insurance Agency

Centuria Life

Centuria Property Funds

Centuria AGM Chairman and CEO Addresses

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