Slide 1: 2015 Interim Results Presentation
Ingenia Communities Group For personal use only 2015 Interim Results Presentation 24 February 2015 Stoney Creek Estate, Marsden Park (Sydney)
Slide 2: Agenda
Agenda For personal use only Topic Speaker Page Group update Simon Owen 3 Key financials Tania Betts 8 Operational update Simon Owen 13 Sales overview Kate Melrose 33 Outlook Simon Owen 39 Simon Owen Tania Betts Kate Melrose Ingenia Communities speakers CEO CFO GM, Project Sales p2
Slide 3: Overview
Ingenia Communities Group Overview For personal use only > Leading provider of rental based Proforma asset value (post independent living for Australian seniors announced acquisitions) Seniors Rental > Established in 2004 – internalised as Ingenia Villages 32% in 2012 > Industry growth fuelled by ag
Slide 4: Results Overview
Results Overview For personal use only Category Achievement Status > Underlying profit of $6.7 million – up 85% Financial > Underlying profit per security up 50% > Portfolio of 20 Lifestyle Parks – actively assessing 10 additional parks Strategy > Cash yielding assets - now over 80% of total portfol
Slide 5: Acquisitions update
Acquisitions update BIG4 Lake Macquarie Tourist Park, NSW For personal use only Acquisition metrics Purchase price $6.8M Terms agreed – subject to due diligence and Board Ingoing yield >9% approval Number of existing sites > BIG4 Lake Macquarie is located on the shores of Lake Permanent sites 13 Mac
Slide 6: Disciplined deployment into accretive acquisitions
Disciplined deployment into accretive acquisitions Capacity for further growth For personal use only Growth through on-strategy acquisitions Interest in sector growing - Ingenia well positioned $115 million Capital Raising & Debt > Internally generated pipeline coupled with experienced in-house team
Slide 7: Changing business mix
Changing business mix Rapidly growing cash yielding asset base For personal use only 30 June 2014 Proforma asset value asset value (post announced acquisitions) Target allocation Garden Villages Garden Villages Lifestyle Garden Villages 32% 32% Parks ~ 25% 50% DMF 21% Continued growth NZ Students 13
Slide 8: Key financials
Key financials For personal use only Stoney Creek Estate, Marsden Park (Sydney) p8
Slide 9: Key financials
Key financials For personal use only Key financial metrics 1H15 1H14 Change Statutory profit / (loss)1, 2 ($1.0m) $4.3m nm > Statutory loss resulting from write off of recent transaction costs on acquisitions Revenue $28.7m $19.3m 48% > Increasing revenue driven by growth in cash Underlying profit3
Slide 10: Underlying profit
Underlying profit Driven by significant increase in rent flows For personal use only 1H15 1H14 Underlying profit (A$m) (A$m) Comments (1H15) Continuing operations - Garden Villages 5.4 4.9 Occupancy and rate growth continue to drive earnings - Settlers Lifestyle 2.7 1.7 Lower spend on marketing as p
Slide 11: Australian underlying profit
Australian underlying profit Foundation established for further growth For personal use only > Ingenia’s profit has traditionally been characterised by stronger second half returns > This trend is anticipated to continue • Consistent with residential housing, the warmer months are historically stron
Slide 12: Capital management
Capital management Strong capital position with significant funding capacity For personal use only New facility Covenant Covenant New multi-bank $175 million facility in place FY15 FY16 > Provides additional funding ($45.5m) on improved terms Interest cover ratio (ICR) 2.0x 2.0x > Tenure extended –
Slide 13: Business model
Business model For personal use only A large and growing rent roll largely funded through Government pension payments, a complementary and accretive short term rental accommodation business with significant upside and a capital light, low risk development pipeline ~ 2,600 residents paying fortnigh
Slide 14: Portfolio update
Portfolio update Diversified Australian portfolio dominated by cash yielding assets For personal use only Ingenia has 62 Australian communities and growing 34 Rental villages 8 DMF villages > 1,801 units > 838 units Largest owner and operator of seniors > In all States except SA > WA, QLD and NSW re
Slide 15: Garden Villages (Seniors rental)
Garden Villages (Seniors rental) Book value: $116.8 million For personal use only > Ingenia is the largest owner and operator of seniors rental accommodation in Australia > Stable, recurring cash flows underpinned by Government payments (pension and rent assistance) > Growth being delivered through
Slide 16: Garden Villages (Seniors rental): Key driver of revenue
Garden Villages (Seniors rental) Key driver of revenue For personal use only Occupancy (%) SIX MONTHS to 31 DECEMBER 2014 Addition of five distressed villages with 86.0 occupancy < 50% Revenue increased 21%, driven by growth in rents 85.7 85.7 84.6 and occupancy 82.3 > Occupancy closed 31 December a
Slide 17: Garden Villages (Seniors rental): Continuing to deliver growth
Garden Villages (Seniors rental) Continuing to deliver growth For personal use only FOCUS > Continue to increase occupancy towards long term target of 92% > Increase conversion metrics to improve occupancy and earnings growth > Use resident surveys to monitor and enhance resident satisfaction > Main
Slide 18: Settlers Villages (DMF)
Settlers Villages (DMF) Book value: $66.9 million For personal use only ► Traditional retirement villages providing accommodation to self-funded retirees ► Conversion and development program has delivered significant value ► Focus on reducing exposure to recycle capital into higher yielding opportun
Slide 19: Settlers Villages (DMF): Focus on sales program
Settlers Villages (DMF) Focus on sales program and reducing investment For personal use only KEY DATA 1H15 1H14 SIX MONTHS TO DECEMBER 2014 Total properties 8 9 > 21 new unit settlements totalling $4.4 million 1H15 - additional 24 Total units 838 961 contracts in place as at 31 December 2014 Accrued
Slide 20: Lifestyle Parks strategy
Lifestyle Parks strategy Opportunity driven by ageing population and housing affordability For personal use only National Over 50 Age Cohort Forecast Australia’s population is rapidly ageing Percentage of Total Population 20m 45% 18m 40% > The number of Australians aged over 50 is forecast to grow t
Slide 21: Lifestyle Parks strategy: Sector in early stages of consolidation
Lifestyle Parks strategy Sector in early stages of consolidation For personal use only Aged Care Retirement Villages (DMF) Lifestyle Parks Facilities 2,700 Facilities 2,160 Facilities 2,563 Beds 190,000 Units 112,296 Top 10 operators own <5% parks3 Top 10 operators own 23% total Top 6 operators own
Slide 22: Active Lifestyle Estates
Active Lifestyle Estates Book value: $138.5 million For personal use only > Ingenia’s Active Lifestyle Estates business provides exposure to a growing market dominated by stable cash flows from permanent and short-term rents > The portfolio, which is focused on NSW and SE QLD, is rapidly gaining sca
Slide 23: Active Lifestyle Estates: Focus on stable permanent rent flows
Active Lifestyle Estates Focus on stable permanent rent flows For personal use only • Diversifies and increases cash flow Tourism • Mix of location | product reduces volatility • Regional markets offer all season tourism complementary returns Permanent Residents strong cash flow • Coastal areas ‘hig
Slide 24: Active Lifestyle Estates: Highest and best use drives mix
Active Lifestyle Estates Highest and best use drives mix For personal use only Tourist cabin – 72 m2 Permanent site - 135 m2 Average rent $127 p/n Rent from senior $133 p/w @ 68% occupancy = $6,900 per year = $31,500 per year White Albatross Holiday Park, Nambucca Heads, NSW p24
Slide 25: Active Lifestyle Estates: Portfolio growing rapidly
Active Lifestyle Estates Portfolio growing rapidly as sites and platform expand For personal use only 1H15 1H14 ($m) ($m) Permanent rental 3.8 1.3 > Revenue increasing as business rapidly Short term rental 4.6 1.6 expands Development sales 1.9 1.1 • Significant permanent and short term rental income
Slide 26: Active Lifestyle Estates: Enhanced opportunities across expanded asset base
Active Lifestyle Estates Enhanced opportunities across expanded asset base For personal use only SIX MONTHS to 31 DECEMBER 2014 KEY DATA 31 Dec 14 31 Dec 13 Total properties 16 10 Continued to grow portfolio through acquisition and development Total permanent sites 1,034 693 Total short-term sites 1
Slide 27: Active Lifestyle Estates – Permanent sites
Active Lifestyle Estates – Permanent sites Permanent homes providing growing stable cash inflows For personal use only SIX MONTHS to 31 DECEMBER 2014 31 Dec 14 31 Dec 13 > Permanent site revenue up substantially on 1H14 Total permanent sites 1,034 693 • Represents 35% of Active Lifestyle Estate inco
Slide 28: Active Lifestyle Estates - Tourism
Active Lifestyle Estates - Tourism Tourism enhancing returns For personal use only Tourism 31 Dec 14 31 Dec 13 SIX MONTHS to DECEMBER 2014 Total short-term sites1 1,174 668 Significant income growth, reflecting increasing scale Av. daily rate - Cabins $111 -- Av. daily rate – Caravan & camping $32 -
Slide 29: Active Lifestyle Estates - Tourism: Opportunity for further growth
Active Lifestyle Estates - Tourism Opportunity for further growth For personal use only FOCUS > Integrate recent and pending acquisitions and drive revenue growth > Introduce cross portfolio marketing and reward for customers to drive stronger revenues in non peak periods • Investor Discount and res
Slide 30: Active Lifestyle Estates – Development
Active Lifestyle Estates – Development Rapidly expanding development rollout For personal use only 12 months ago December 14 Total properties x10 x16 Properties in x2 x9 development mode Homes under construction or being installed x6 x61 p30
Slide 31: Development: Process, people and product in place
Active Lifestyle Estates – Development Process, people and product in place for growth For personal use only Development portfolio 1H15 1H14 Change SIX MONTHS to DECEMBER 2014 Product – over 78 homes delivered, installed or under Total active development 9 2 construction (of 104 to date) projects >
Slide 32: Active Lifestyle Estates – Sales update
Active Lifestyle Estates – Sales update Target to deliver 75 – 80 sales FY15 For personal use only > Reservations and contracts in place totalling over $9m will underpin results in 2H15 and into FY16 > Expect to settle majority of current sales in FY15 1 July to 31 Dec 2014 New Refurbished Reserved
Slide 33: Active Lifestyle Estates – Sales
Active Lifestyle Estates – Sales Portfolio with short and long term opportunities For personal use only Portfolio has grown to encompass a range of communities – existing mature communities with infill opportunities and immature communities which provide opportunity to reposition and leverage larger
Slide 34: Active Lifestyle Estates – Sales process
Active Lifestyle Estates – Sales process A dual approach to drive increased sales rates For personal use only > Capture ‘in market’ buyers plus build pent up demand and trust > Take buyers and their families on a journey earlier A Dual Sales Approach: Awareness Education Sales Settlements Community
Slide 35: Active Lifestyle Estates: Tactical marketing
Active Lifestyle Estates: Tactical marketing Targeting ‘in market’ buyers and generating leads For personal use only p35
Slide 36: Active Lifestyle Estates - Awareness and education
Active Lifestyle Estates - Awareness and education Educational morning tea at Lake Macquarie Village For personal use only Meeting like minded people, old friends and new, begins to build the virtual community and confidence Opportunity to educate, ask questions and dispel mis-conceptions Existing b
Slide 37: Typical development, marketing and sales program
Active Lifestyle Estates Typical development, marketing and sales program For personal use only Awareness Education Sales Settlements Customer Homes Insights Ingenia orders delivered & Deposit & informs Spec Homes customers Contracts Settlements Design design Development Inspect Spec Homes enable ea
Slide 38: Focus on portfolio expansion and sales delivery
Active Lifestyle Estates Focus on portfolio expansion and sales delivery For personal use only Stoney Creek Estate – typical immature community with opportunity to reposition and leverage size and scale FOCUS > Continue to expand portfolio with emphasis on a mix of mature and immature opportunities
Slide 39: Outlook
Outlook Key business drivers remain positive For personal use only ► Lifestyle Parks market competition increasing but Ingenia remains well positioned to lead sector consolidation ► Ageing population to drive demand for affordable seniors accommodation ► Growing rental income supported by pension an
Slide 40: Appendices
Appendices For personal use only Ingenia homes under construction at Glendale Homes, Qld p40
Slide 41: Cashflow in detail
Appendix 1 Cashflow in detail For personal use only 31 December 31 December (A$m) 2014 2013 Opening cash at 1 July 2014 14.6 37.6 Cashflow generated from operations 6.0 5.6 Net borrowing costs paid (2.2) (2.1) Income tax received / (paid) 0.8 (0.1) Net cashflows from operating activities – New Zeala
Slide 42: Balance sheet
Appendix 2 Balance sheet For personal use only 31 December 30 June (A$’000) 2014 2014 Cash 24,618 12,894 Inventory 6,437 2,208 Investment property and property under development 520,184 498,863 Other assets 16,794 7,863 Assets held for sale - 5,439 Assets of discontinued operations - 47,657 Total as
Slide 43: Underlying Profit and operating cash flows
Appendix 3 Underlying Profit and operating cash flows For personal use only 1H14 to 1H15 Underlying profit reconciliation 10 1.1 0.7 1.5 (1.0 ) $m 1.0 5 (0.7) 0.5 6.7 3.6 0 Underlying profit Garden Villages Settlers Lifestyle Active Lifestyle Corporate costs Net finance costs Income tax NZ Students
Slide 44: Valuations summary
Appendix 4 Valuations summary For personal use only 1H15 1H15 Independent 31 Dec 14 30 Jun 14 External External Cap rate / Book Book Segment Valuations Valuations Discount rate Value Value # $m % $m $m Comments > Nine external valuations overall reaffirming Active Lifestyle acquisition prices (pre t
Slide 45: December 2014 debt position
Appendix 5 31 December 2014 debt position For personal use only Australian debt 31 Dec 14 Australian Interest rates 31 Dec 14 30 June 14 (A$m) Total facility 129.5 All in cost of funds1 4.65% 5.05% Total debt drawn 21.0 Bank guarantees 24.3 Australian Covenants 31 Dec 14 Covenant Utilised facility (
Slide 46: Portfolio statistics: Garden Villages (Rental)
Appendix 6 Portfolio statistics: Garden Villages (Rental) For personal use only Book Value 31 Dec 2014 Occupancy Occupancy Property Name Location ($m) Cap Rate Total Units 31 Dec 2014 30 June 2014 Western Australia Swan View Gardens Swan View 6.0 11.5% 72 100% 100% Seville Grove Gardens Seville Grov
Slide 47: Portfolio statistics: Garden Villages (Rental) cont.
Appendix 6 cont. Portfolio statistics: Garden Villages (Rental) For personal use only Book Value 31 Dec 2014 Occupancy Occupancy Property Name Location ($m) Cap Rate Total Units 31 Dec 2014 30 June 2014 Victoria Grovedale Gardens Grovedale 4.1 12.6% 51 92% 100% St Albans Park Gardens St Albans Park
Slide 48: Portfolio statistics: Active Lifestyle Estates
Appendix 7 Portfolio statistics: Active Lifestyle Estates For personal use only Book Value Book Value Under Book Value Completed Development Total 31 Dec 2014 Cap Rate 31 Dec 2014 31 Dec 2014 Permanent Short Term Total Property Name Location ($m) Completed ($m) ($m) Sites Sites1 Sites The Grange Vil
Slide 49: Short term accommodation rates and occupancy
Appendix 8 Short term accommodation rates and occupancy For personal use only Average Daily Average Daily Occupancy Rate Self Contained Occupancy Rate Caravan & Caravan & Caravan & Property Name Location Units Self Contained Self Contained Camping Sites Camping camping Nepean River Penrith, NSW 38 6
Slide 50: Portfolio statistics: Settlers (DMF)
Appendix 9 Portfolio statistics: Settlers (DMF) For personal use only Book Value 31 Dec 2014 Occupancy Occupancy Property Name Location ($m) Discount Rate Total Units 31 Dec 2014 30 June 2014 Ridgewood Rise Ridgewood, WA 18.6 14.3% 240 100% 100% South Gladstone South Gladstone, QLD 2.4 15.5% 56 96%
Slide 51: Settlers (DMF) sales
Appendix 10 Settlers (DMF) sales For personal use only WA NSW QLD Lakeside Meadow Ridgewood Cessnock Ridge Rock- Forest Gladstone Noyea Total Springs Rise Estate hampton Lake (strata)2 6 months to 31 Dec 2014 No. of new sales 1 - - 2 5 3 9 1 - 21 Average new sales prices ($’000) 312 - - 167 318 175
Slide 52: Development pipeline – Active Lifestyle Estates
Appendix 11 Development pipeline – Active Lifestyle Estates For personal use only Remaining Dev. Sites Total Approved Requiring Potential Cluster/Community Acq. Date Dev. Sites Approval Dev. Sites Hunter/Newcastle One Mile Beach, NSW Dec 2013 - 45+ 45+ Master plan with Department of Lands The Grange
Slide 53: Project snapshot: Stoney Creek Estate and Lake Macquarie Village
Appendix 12: Project snapshot Stoney Creek Estate and Lake Macquarie Village For personal use only Stoney Creek Estate, Marsden Park (Sydney), NSW Acquired May 2014 Launch planned for March 2015 Estate Major Works – landscaping, new entry statement and site presentation to complete by project sale
Slide 54: Project snapshot: Ettalong Beach Village and Albury Citygate
Appendix 13: Project snapshot Ettalong Beach Village and Albury Citygate For personal use only Ettalong Beach Village, Ettalong Beach, NSW Acquired April 2013 Insert for Ettalong an image Project launched October 2014 of new homes along streetscape Expect to install all 31 new homes by June 2015
Slide 55: Project snapshot: Mudgee Valley and Mudgee Tourist
Appendix 14: Project snapshot Mudgee Valley and Mudgee Tourist and Van Resort For personal use only Mudgee Valley Tourist Resort, Mudgee NSW Acquired September 2013 Project works underway Adjacent land optioned to improve site configuration and facilitate master plan with separate permanent living
Slide 56: Competitor landscape – Lifestyle and Tourism Parks
Appendix 15 Competitor landscape – Lifestyle and Tourism Parks For personal use only Major operators represent <5% of market opportunity Major Operators No. of parks Locations Capital strategy Active Lifestyle Estates 20 NSW and SE QLD Acquire existing lifestyle and tourism parks. (Ingenia) Tourism
Slide 57: The US market is well established
Appendix 16 The US market is well established For personal use only 50,000 MH (Manufactured Home) Communities 12,000 RV (Recreational Vehicle) Communities 19.2 million people (6% of US population) live in an MH Community Three NYSE listed REITs own 500 Communities and have combined market capitalisa
Slide 58: US Market - key statistics
Appendix 17 US Market - key statistics For personal use only 20% of US households earn < $20,000 p.a. One third of all new manufactured homes purchased on credit Number of people turning 55 every day Annual income for a senior provided through social security Cap rate on A-Grade community in key mar
Slide 59: Contact Information
Contact Information For personal use only Simon Owen Donna Byrne CEO & Managing Director Investor Relations Tel: +61 2 8263 0501 Tel: +61 2 8263 0507 Mob: +61 412 389 339 Mob: +61 401 711 542 Email: sowen@ingeniacommunities.com.au Email: dbyrne@ingeniacommunities.com.au p59
Slide 60: Disclaimer
Disclaimer For personal use only This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia Communities Fund (ARSN 107 459 576) and Ingenia Communities Management Trust (ARSN 122 928