Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2013 Earnings Presentation
42 slides from Lifestyle Communities's earnings presentation, Aug 21, 2013
Slide 1: Results Presentation Year ended 30 June 2013
For personal use only Results Presentation Year ended 30 June 2013 21 August 2013
Slide 2: Contents
CONTENTS For personal use only 1. Executive Summary / Key Metrics 2. Financial & Operational Results SHEPPARTON 3. Market MELTON TARNEIT SHEPPARTON WOLLERT CHELSEA HEIGHTS CRANBOURNE 4. Business Model WARRAGUL HASTINGS 5. Outlook MELTON WOLLERT 6. Summary TARNEIT CHELSEA HEIGHTS CRANBOURNE WARRAGUL
Slide 3: Executive Summary
EXECUTIVE SUMMARY Lifestyle Communities made very good progress during FY2013 For personal use only Home sites (annuities) under management (1) • Another strong year of settlements (149) and sales (190)(1) 800 –– • 695 occupied home sites(1) 700 –– • Entered into an agreement to expand Lifestyle 600
Slide 4: Key Metrics: Settlements and Sales
KEY METRICS Settlements and Sales For personal use only 200 –– 150 –– 100 –– • Another strong year of settlements and sales 50 –– - 149 home settlements in FY2013 compared to 134 in FY2012 (1) FY2010 FY2011 FY2012 FY2013 - 190 net sales commitments in FY2013 Settlements Net Sales Commitments compare
Slide 5: Key Metrics: Net Assets and Gearing
KEY METRICS Net Assets For personal use only $90,000,000 –– $75,000,000 –– $60,000,000 –– $45,000,000 –– $30,000,000 –– $15,000,000 –– • Net assets $81.4 million (at 30 June 2013) up from $40.0 million (at 30 June 2012) FY2010 FY2011 FY2012 FY2013 • Completed $35.3 million (net of costs) entitlement
Slide 6: Portfolio of communities continues to grow
KEY METRICS Lifestyle Communities’ portfolio of communities continues to grow For personal use only Home sites Home sites occupied and awaiting Total home Home sites sold & settlement Communities sites in sold & awaiting communities occupied # % settlement Existing Communities – Mature Melton 228 22
Slide 7: Financial & Operational Results
For personal use only Section 2 FINANCIAL & OPERATIONAL RESULTS Lifestyle Communities Limited Downsize to a Bigger Life 7
Slide 8: Financial Results: Growing Annuity Income Streams
2.1 FINANCIAL RESULTS Eight Years of Growing Annuity Income Streams For personal use only Annuity Income There are two components to the annuity stream: $6,000,000 –– $5,000,000 –– 1. Site Rental Fee • pproximately $160.00 per week per A $4,000,000 –– home $3,000,000 –– • Indexed at greater of CPI o
Slide 9: Sales and Settlements
2.2 SALES AND SETTLEMENTS Another strong year of sales and settlements For personal use only Sales Commitments Settlements • 190 new home sales in FY2013.(1) • 149 settlements in FY2013.(1) • Chelsea Heights sales exceeding expectations. • 55 settlements at Cranbourne, 32 at Chelsea Heights, 27 each
Slide 10: Profit & Loss
2.3 PROFIT & LOSS FY2012 FY2013 % For personal use only Profit & Loss highlights ($’000) ($’000) Movement Home settlement revenue 31,660 36,552 15% • Net profit attributable to shareholders up 3% to Rental and utilities revenue 4,222 5,574 32% $6.2 million Deferred management fee 1,805 2,826 57% • H
Slide 11: Balance Sheet
2.4 BALANCE SHEET FY2012 FY2013 % For personal use only Balance sheet highlights ($’000) ($’000) Movement Cash and cash equivalents 3,330 16,144 Inventories 16,367 21,274 • Completion of entitlement offer and Total current assets 20,865 38,978 87% placement raised $35.3 million (net of Trade and oth
Slide 12: Cash Flow
2.5 CASH FLOW FY2012 FY2013 For personal use only Cash flow highlights ($’000) ($’000) Receipts from customers 40,407 46,462 Payments to suppliers and employees^ (43,878) (43,169) Net interest payments (4,338) (3,355) • Adjusted cash flows from operations Cash flows from operations (7,849) (42) (exc
Slide 13: Market
For personal use only Section 3 MARKET Lifestyle Communities Limited Downsize to a Bigger Life 13
Slide 14: The Market
3.1 THE MARKET Lifestyle Communities operates in an under-serviced sector of the over 55’s housing market For personal use only Equity Income Distribution 40% of those on a pension own 77% of over 65s singles and their own house and 65% of over 65s couples have a median net rely on the pension worth
Slide 15: Key Market Drivers
3.2 KEY MARKET DRIVERS Demographic changes are driving an increase in the size of the potential market The big housing market themes include: For personal use only Affordability • The median net worth of a single person over the age of 65 is approx. $380,000 • 77% of single people [over 65] rely on
Slide 16: Market Size
3.3 MARKET SIZE Lifestyle Communities’ affordable housing solution targets the largest segment of the over 55’s market For personal use only Over 55’s Market Size (Number of people) It is estimated that 53% of the 47% of the Victoria has over 355,000 total market total market people aged over 65 who
Slide 17: Marketing Strategy
3.4 MARKETING STRATEGY Straddling two markets but focusing on the emerging baby boomer For personal use only War Generation Baby Boomer Generation (1925-1945) (1946-1964) • Now turning 70 plus • Aging into the retirement space • Negative trigger buyers • Positive trigger buyers • Characterised by: •
Slide 18: How We Market
3.5 HOW WE MARKET Continued investment in marketing and branding during the year For personal use only Positioning Market Research Based Execution • Differentiated in homogenous clutter • Strategy based on in-depth qualitative • Multi-channel of ‘retirement’ sector segment analysis • Above the line
Slide 19: Current Marketing
3.6 CURRENT MARKETING A BIGGER The benefits life 9747 6909 111-139 Coburns Rd, Brookfield doWnSize to a BiGGeR LiFe D OW N S I Z E TO A B I G G E R L I F E of moving to a Lifestyle Communit y For personal use only $196,000 $199,900 $235,000 $235,900 Free up cash enjoy spectacular the things you’ve w
Slide 20: Current Marketing (cont.)
3.6 CURRENT MARKETING (CONT.) Lifestyle Communities runs a strong TV and radio campaign in selected markets For personal use only Click here to watch our latest TV commercial Click here to listen to our latest radio commercial www.facebook.com/abiggerlife www.lifestylecommunities.com.au www.youtube.
Slide 21: Brand Awareness
3.7 BRAND AWARENESS Brands of retirement villages - aided awareness For personal use only 50% –– 45% –– 40% –– Percentage of people surveyed 35% –– 30% –– 25% –– 20% –– 15% –– 10% –– 5% –– Lend Lease Stockland Australian Unity Lifestyle None / Aveo Retirement Retirement Villages Communities Don’t kn
Slide 22: Business Model
For personal use only Section 4 BUSINESS MODEL Lifestyle Communities Limited Downsize to a Bigger Life 22
Slide 23: Business Strategy
4.1 BUSINESS STRATEGY Lifestyle Communities will continue rolling out affordable housing for the over 55’s For personal use only • Focused strategy to dominate the niche of affordable housing to the over 55’s market • Lifestyle Communities’ brand is now clearly differentiated in the consumer’s mind
Slide 24: Business Model
4.2 BUSINESS MODEL Lifestyle Communities develops and manages affordable land lease communities delivering long term annuities from home site fees and resales For personal use only Moving in Living Moving out Move into a new, affordable, low Release of equity on downsizing Net proceeds of home sale
Slide 25: Business Model (cont.)
4.2 BUSINESS MODEL (CONT.) Lifestyle Communities has a differentiated business model that produces long-term growing CPI indexed annuity streams for its investors For personal use only Features Benefits ifestyle Communities is the developer, L Lifestyle Communities control all touch points with its
Slide 26: Business Model (cont.): Low risk sustainable model
4.2 BUSINESS MODEL (CONT.) Lifestyle Communities has a low risk sustainable business model For personal use only Community roll out Community management Total homes (annuities) at year end Circulating Settled homes are transferred to the Capital Community Pool Management Business FY06 FY07 FY08 FY09
Slide 27: The Lifestyle Business
4.3 THE LIFESTYLE BUSINESS Lifestyle Communities has two components to its business For personal use only Community roll-out Community management Attributes Attributes • Circulating pool of capital • Growing pool of annuities (homes • Used to fund development of settled) communities • Large proporti
Slide 28: Affordability
4.4 AFFORDABILITY Rent as a percentage of the pension remains affordable For personal use only Site rental as a % of pension 30.0% –– 25.0% –– • Lifestyle Communities’ homeowners who receive the age pension 20.0% –– are paying approximately: - 18.5% of their pension as rental (for couples) 15.0% ––
Slide 29: Key Risks
4.5 KEY RISKS The company ensures diligent risk management at each stage of the development cycle For personal use only Community Financial Site Selection Community Roll Out Sales Management • Strong balance • Long-term • Level of pre-sales • Control customer • Rigorous staff sheet experience in the
Slide 30: Outlook
For personal use only Section 5 OUTLOOK Lifestyle Communities Limited Downsize to a Bigger Life 30
Slide 31: Outlook
5.1 OUTLOOK Lifestyle Communities expects to capitalise on the continued expansion of its community portfolio in FY2014 For personal use only • Continued strong customer support for the Lifestyle Communities brand and product offering • Settlements and net profit attributable to shareholders are bot
Slide 32: Likely Settlement Programme
5.2 LIKELY SETTLEMENT PROGRAMME Currently 1,460 homes in the portfolio(1) For personal use only Community FY14 FY15 FY16 FY17 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Brookfield (Melton) Seasons (Tarneit) Warragul Cranbourne Shepparton Chelsea Heights Hastings Chelsea Heights Expansion Woller
Slide 33: Focused Acquisition Strategy
5.3 FOCUSED ACQUISITION STRATEGY Lifestyle Communities continually performs detailed due diligence on Victoria’s growth corridors For personal use only • Focusing on opportunities in Victoria to capitalise on the lack of supply of affordable housing, forecast population growth and brand equity • Tar
Slide 34: Dividend Policy
5.4 DIVIDEND POLICY Lifestyle Communities intends to pay dividends out of operating cash flow from community management For personal use only As a general principle, the Directors of Lifestyle Communities intend to pay dividends out of post tax, operating cash flow generated from community managemen
Slide 35: Summary
6. SUMMARY For personal use only • FY2013 delivered another strong result for net sales commitments (190) and home settlements (149)(1) • Annuity income from homeowner rentals grew by $1.3 million to $4.9 million as a result of having 695 settled homes • Two acquisitions recently announced, being an
Slide 36: Appendix
For personal use only Appendix Lifestyle Communities Limited Downsize to a Bigger Life 36
Slide 37: Investment Property Analysis
A.1 INVESTMENT PROPERTY ANALYSIS For personal use only Community Valuation Summary Investment properties per 30 June 2013 financials 30 June 2013 Investment Homes At fair value + DMF Total fair Total homes properties at occupied ($m) asset(2) ($m) value ($m) cost(1) ($m) Mature Communities Brookfiel
Slide 38: Investment Property Analysis: Valuation Metrics
A.1.1 INVESTMENT PROPERTY ANALYSIS For personal use only Community Valuation Metrics (on-completion) Rental Metrics DMF metrics (management assessment) (extracts from valuations) DMF Average sale Rental cap. DMF Net rental per home terminal cap. value rate discount rate rate (GST excl.) Mature Commu
Slide 39: Cash Flow Analysis - FY2013
A.2 CASH FLOW ANALYSIS - FY2013 Chelsea Supplementary Cash Flow Cranbourne Melton Tarneit Warragul Shepparton Heights Hastings Equity Total Analysis for FY2013 (50% JV) (50% JV) Total Number of Homes 228 136 182 217 221 105 141 1,230 For personal use only Settled FY2013 2 6 27 55 27 32 – 149* Remain
Slide 40: Cash Flow Analysis - FY2012
A.2.1 CASH FLOW ANALYSIS - FY2012 Chelsea Supplementary Cash Flow Cranbourne Melton Tarneit Warragul Shepparton Heights Hastings Total Analysis for FY2012 (50% JV) For personal use only (50% JV) Total Number of Homes 228 136 182 217 221 105 141 1,230 Settled FY2012 9 28 20 72 5 – – 134* Remaining ho
Slide 41: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER For personal use only • This Presentation contains general background information about Lifestyle Communities Limited (LIC) and its activities current at 16 August 2013 unless otherwise stated. It is information in a summary form and does not purport to be complete. I
Slide 42: Lifestyle Communities Limited
For personal use only Lifestyle Communities Limited Level 2, 35 Market Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au WO LLER T - HASTI NGS - CHE LSEA HEIGHT S - SH EPPARTON - CRANBO U R NE - WA R R AG U L - TA R NE I T - M E LTO N