Ingenia Communities Group · ASX:INA
Ingenia Communities — FY2020 Earnings Presentation
39 slides from Ingenia Communities's earnings presentation, Aug 18, 2020
Slide 1: ASX / Media Release
ASX / Media Release 18 August 2020 Ingenia Communities Group (INA) provides its FY20 Results Presentation which is authorised for release by the Ingenia Communities Group Board. ENDS For further information please contact: Donna Byrne General Manager Investor Relations P 02 8263 0507 M 0401 711 542
Slide 2: Full Year 2020 Results Presentation
Presented by Simon Owen and Scott Noble 18 August 2020 Freshwater by Ingenia Lifestyle, QLD INGENIA COMMUNITIES GROUP FULL YEAR 2020 RESULTS PRESENTATION
Slide 3: Results summary
Results summary Strong performance, impacted by COVID-19 from March FINANCIAL DEVELOPMENT • Settled 325 new homes – down only 3% on • Revenue of $244.2 million – up 7% on FY19 record FY19 result • EBIT $71.9 million – up 17% on FY19 • Average home price up 12% to $430,000 • Underlying EPS 22.1 cents
Slide 4: Business model demonstrating resilience
Business model demonstrating resilience Quick, agile response reduced impact of COVID-19 Prior to March 2020 the business was performing well and expected to deliver another year of record growth COVID-19 and associated restrictions have created unprecedented challenges and ongoing uncertainty in op
Slide 5: Lifestyle and Gardens rental inflows remained intact through COVID-19
Lifestyle and Gardens rental inflows remained intact through COVID-19 Compared to other commercial real estate classes Ingenia has performed strongly Rent Collections 110.0% 100.0% 100.0% 100.0% 100.0% 100.0% 88.0% 89.0% 89.0% 90.0% 86.0% 84.6% 82.0% 80.0% 71.0% 70.0% 61.2% 60.0% 50.0% Ingenia (Life
Slide 6: Business overview
Business overview Rental base growing through acquisition and development $ Rent base $1.1B $2 million/pw Over 9,900 Income producing sites Property Portfolio 3,015 Development sites 74 Communities 9 communities under development 37 Lifestyle and Holidays >971,000 ‘room nights’ p.a. 26 Ingenia Garde
Slide 7: Sector remains attractive as cash flows demonstrate resilience
Sector remains attractive as cash flows demonstrate resilience Ingenia remains well placed to grow Competitive Landscape Market for lifestyle communities (Total Sites) increasingly competitive • New entrants emerging Long Term Tourism Development Pipeline • Quality lifestyle communities remain tight
Slide 8: Acquisitions will contribute to future growth in cash flows
Acquisitions will contribute to future growth in cash flows Focus on sector leadership and scale supported by significant funding capacity Over $100 million invested in established communities and land adjacent Pipeline expanding - further transactions well progressed to existing sites over the past
Slide 9: Development Joint Venture to acquire large DA approved site
Development Joint Venture to acquire large DA approved site Approval in place for 427 homes on NSW Central Coast • Ingenia has been working with the vendor on a large residential land lease development site on the former Morisset golf course • It will form part of a community hub with commercial and
Slide 10: Performance and Capital Management
Ingenia Lifestyle Plantations, NSW Performance and Capital Management 9 FY20 RESULTS PRESENTATION
Slide 11: Key financials
Key financials Growth in EBIT despite impact of COVID-19 KEY FINANCIAL METRICS FY20 FY19 Revenue and EBIT growth driven by increase in rental sites from Revenue $244.2m $228.7m 7% development and acquisition, increased development margin and cost management EBIT1 $71.9m $61.5m 17% Underlying profit1
Slide 12: Underlying earnings growing as business expands
Underlying earnings growing as business expands EBIT FY20 FY19 Lifestyle and Holidays Operations $29.8m $27.4m 9% Expanding rental base – driven by recent acquisitions, new home settlements and additional rental cabins Lifestyle Development $39.9m $33.4m 19% Ingenia Gardens $10.2m $10.0m 2% Developm
Slide 13: Capital management
Capital management Capital position enhanced DEBT METRICS 30 JUN 20 30 JUN 19 Loan to value ratio (covenant <55%) 8.4% 29.8% $450m 2.5% 3.3YRS 8.4% Gearing ratio1 5.7% 23.7% COST OF Interest cover ratio (total) DEBT WT AV DEBT 8.35x 6.4x DRAWN LVR (covenant >2x) CAPACITY MATURITY DEBT3 Total debt fa
Slide 14: Growth in value across core portfolios
Growth in value across core portfolios Lifestyle capitalisation rates continue to compress • Independent valuation of 15 assets in 2H20 Av. Cap Rate Av. Cap Rate Jun 20 Portfolio • Ingenia Gardens and Lifestyle and Holidays portfolio value up 3.6% Jun 201 Jun 191 Book Value ($27.4 million) like for
Slide 15: Performance
Ingenia Rental Chambers Pines, QLD Performance core rental business demonstrating resilience 14 FY20 RESULTS PRESENTATION
Slide 16: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays Expanding rental base in capital city and coastal markets • Permanent sites increased by 24% over the past 12 months KEY DATA 30 JUN 20 30 JUN 19 • Portfolio enhanced as new communities acquired and developments Total properties1 37 35 progress Permanent sites 4,034 3,
Slide 17: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays Rental income growing KEY DATA FY20 FY19 Lifestyle and Holiday rental income up 6% Permanent rental income $31.8m $25.0m 27% • Permanent rental income not impacted by COVID-19 – no loss in rent or increase in bad debts Annuals rental income $4.5m $4.7m (4%) • Temporary
Slide 18: Ingenia Holidays
Ingenia Holidays Well positioned to capture domestic demand Holidays revenue down only 6% on prior corresponding period • Closure of some parks on NSW South Coast over December/January and FY20 FY19 of all parks from late March to June significantly reduced revenue opportunity Cabins • Cost manageme
Slide 19: Ingenia Gardens (seniors rental)
Ingenia Gardens (seniors rental) Strong, stable, government supported rent Record high occupancy of 94.4% supporting ongoing KEY DATA FY20 FY19 stable cash flows Total revenue $25.0m $24.6m • Residents attracted to supported environment during COVID-19 EBIT $10.2m $10.0m • Reduced ‘move-outs’ contri
Slide 20: Funds Management Platform
Funds Management Platform Generating new revenue streams and capital efficiency Integration of Eighth Gate platform complete Funds Management is a key growth platform • Established platform acquired August 2019 – nine communities valued • Appetite from investor base for investment opportunities at $
Slide 21: Development
SOD turning event at Ingenia Lifestyle Hervey Bay, QLD Development 20 FY20 RESULTS PRESENTATION
Slide 22: Development
Development Settlement volumes impacted by restrictions, average home sales price increased New home settlements down slightly due to COVID-19 pandemic KEY DATA FY20 FY19 • On track for record sales prior to COVID-19 New home settlements1 325 336 (3%) • Restrictions slowed sales inspection and settl
Slide 23: Development Joint Venture with Sun Communities
Development Joint Venture with Sun Communities Generating new revenue streams and capital efficiency First settlements at Freshwater (Burpengary, QLD) at end FY20 Targeting growth in FY21; additional acquisitions progressing • First residents settled in April 2020 • Expect to finalise acquisition of
Slide 24: Greenfield projects
Pipeline supporting ongoing development returns VACANT DEVELOPMENT COMMENCEMENT TO COMPLETION SITES REMAINING1 KEY PROJECTS Jun 20 Jun 21 Jun 22 Jun 23 Latitude One 214 Strong sales – 59 approved sites remaining Additional 155 sites (STA) Greenfield projects Plantations 83 Second greenfield project
Slide 25: Sustainability
Sustainability ESG initiatives and reporting are a key focus for Board and Current projects Management • Audit and Risk Committee oversees the Group’s sustainability program and reporting, and recommends to the Board • Internal working group driving identification of initiatives, key projects and re
Slide 26: Strategy and Outlook
Strategy and Outlook 25 FY20 RESULTS PRESENTATION
Slide 27: Outlook – market uncertainty remains but business well placed
Outlook – market uncertainty remains but business well placed Operating conditions remain uncertain - changes in travel restrictions, health advice and border closures expected to continue • Operating protocols are in place to flex operations and respond to health advice, including contact tracing a
Slide 28: FY21 focus
FY21 focus Continue to respond to operating environment, maintaining focus on resident, guest and employee health and safety Expand in key markets through acquisition and development – move to clear sector leadership Improve performance of existing assets to drive growth in rental revenue Continue f
Slide 29: Appendices
Ingenia Lifestyle Latitude One, NSW Appendices 28 FY20 RESULTS PRESENTATION
Slide 30: Underlying profit
Appendix 1 Underlying profit FY20 FY19 ($M) ($M) Lifestyle and Holidays – Operations 29.8 27.4 Lifestyle Development 39.9 33.4 Ingenia Gardens 10.2 10.0 Fuel, food & beverage 0.6 0.6 Other 1.3 0.2 Portfolio EBIT 81.8 71.6 Corporate costs (9.9) (10.1) EBIT 71.9 61.5 Share of income/(loss) of a Joint
Slide 31: EBIT and underlying profit by segment
Appendix 2 EBIT and underlying profit by segment LIFESTYLE LIFESTYLE INGENIA FUEL, FOOD CORPORATE ($M) TOTAL OPERATIONS DEVELOPMENT GARDENS AND BEVERAGE AND OTHER1 Rental income 72.2 - 22.3 - - 94.5 Lifestyle home sales - 126.8 - - - 126.8 Catering income - - 2.5 - - 2.5 Fuel, food and beverage inco
Slide 32: Cash flow
Appendix 3 Cash flow FY20 FY19 ($M) ($M) Opening cash at 1 July 20.2 14.5 Rental and other property income 116.1 107.4 Property and other expenses (102.7) (93.3) Net cash flow associated with lifestyle home development 59.5 55.7 Net borrowing costs paid (9.3) (8.9) Government subsidy 2.9 - All other
Slide 33: Consolidated balance sheet
Appendix 4 Consolidated balance sheet 30 JUN 20 30 JUN 19 ($M) ($M) Cash 10.8 20.2 Inventories 36.2 36.0 Investment properties 943.9 846.8 Investment in Joint Venture 15.9 11.6 Other financial assets 13.9 2.3 Assets held for sale 32.6 12.8 Other assets 39.5 23.2 Total assets 1,092.8 952.9 Borrowings
Slide 34: Reconciliation: underlying profit to statutory profit
Appendix 5 Reconciliation: underlying profit to statutory profit Underlying NPAT to Statutory NPAT 70 60 59.1 4.8 16.1 50 40 $m 1.5 8.6 30 3.3 31.5 20 10 0 Underlying NPAT Transaction costs / Stamp Valuation of Investment Valuation of Vendor Profit Impairment of Non Core and Other Tax Benefit Statut
Slide 35: Capitalisation rates have progressively tightened
Appendix 6 Capitalisation rates have progressively tightened Lifestyle and Mixed-use Communities 11.50% 10.50% Crystal Cascades,QLD Murray River,NSW Hervey Bay,QLD Implied cap rate % 9.50% Big4 Mudgee,NSW Grange,Jun16 8.50% Sunshine,NSW Aspley,QLD Capricorn Palms,QLD Green Wattle,QLD Colonial,QLD 7.
Slide 36: Property snapshot
Appendix 7 Property snapshot Ingenia Lifestyle and Holidays Lifestyle Development snapshot snapshot DA approved sites Total properties 37 Ingenia 1,179 Total permanent homes 4,032 Sun Communities Joint Venture 675 Total annual sites 535 Sites requiring approval Total tourism sites 2,398 Ingenia owne
Slide 37: Property snapshot (cont'd)
Appendix 7cont’d Property snapshot Ingenia Gardens snapshot Funds Management snapshot Total properties 26 Permanent Tourism Communities Total units 1,376 sites sites Jun 20 $342 • Federation Village, Glenroy, VIC 182 Ave. weekly rent • Federation Village, Sunshine, VIC 142 - Jun 19 $342 • Federation
Slide 38: Contact Information
Ingenia Holidays One Mile Beach, NSW Contact Information Scott Noble Chief Financial Officer Donna Byrne General Manager Investor Relations Tel: +61 2 8263 0538 Tel: +61 2 8263 0507 snoble@ingeniacommunities.com.au dbyrne@ingeniacommunities.com.au Ingenia Communities Group Level 9, 115 Pitt Street S
Slide 39: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) The forward looking statements included in this presentation involve subjective judgment and and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia analysis and are sub
Ingenia Communities Group — FY2020 Earnings Presentation on 6ix