Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — H1 FY2019 Earnings Presentation
35 slides from Lifestyle Communities's earnings presentation, Feb 21, 2019
Slide 1: Results Presentation Half year ended 31 December 2018
A Business for Purpose For personal use only Results Presentation Half year ended 31 December 2018 February 2019 LIFESTYLE Lifestyle LyndarumCOMMUNITIES LIMITED A BUSINESS FOR PURPOSE 1
Slide 2: Contents
Contents Appendix For personal use only 1. Overview 3 A.1 Model of Living 26 2. Financial & operational results 10 A.2 Growing Recurring Revenue 27 3. Outlook 20 A.3 Industry Dynamics 28 4. Summary 24 A.4 Land Acquisition Strategy 29 A.5 Sales and Settlements 30 A.6 Deferred Management Fees 31 A.7 C
Slide 3: 1.1 Our Story
1.1 Our Story For personal use only 2003 James Kelly, Dael Perlov “We believe that all Australians over 50 and Bruce Carter develop business plan deserve the choice to 2004 live their life full of Development of first community at Brookfield - possibilities.” Opened in June 2005 2007 Listed on the A
Slide 4: 1.2 A Business for Purpose
1.2 A Business for Purpose For personal use only An affordable housing option - 50% of Australians aged over 50 who have less than $620,000 in total equity An affordable and sustainable financial model where homeowners can prosper An empowering and engaging customer service strategy that reimagines
Slide 5: 1.3 Overview
1.3 Overview 1HFY19 results snapshot Financial Summary 1HFY19 1HFY18 ($ Million) ($ Million) Net profit after tax attributable to shareholders $21.9 million $15.8 million For personal use only Total assets $426.9 million $275.8 million Equity $223.4 million $169.5 million Dividend (interim) 2.5 cent
Slide 6: 1.4 Overview: A repeatable business model structured for sustainable growth
1.4 Overview A repeatable business model structured for sustainable growth 1HFY19 Highlights For personal use only • 186 new homes settled and 94 new homes sold Home sites (annuities) under management (1) • 41 resale homes settled of which 30 attracted a DMF • 2,133 occupied home sites(1) 2200 • 3,1
Slide 7: 1.5 Portfolio Overview
1.5 Portfolio Overview 17 communities in planning, development or under management Focus remains in Victoria For personal use only Community Homes Settled • Favourable planning legislation • Better access to zoned, flat land for development Brookfield at Melton 228 100% • Low saturation of land leas
Slide 8: 1.6 Overview: Portfolio snapshot
1.6 Overview Lifestyle Communities’ Portfolio snapshot portfolio continues to grow organically 1HFY19 For personal use only Homes occupied or sold Total homes in Homes sold & Homes sold & and awaiting settlement Communities communities occupied awaiting settlement No. % Existing Communities – Sold o
Slide 9: Financial & operational results
Section 2 For personal use only Financial & operational results Lifestyle Shepparton 9
Slide 10: 2.1 Property Market Update
2.1 Property Market Update Median House Prices for Lifestyle's Sales Catchments ($'000) Median house prices in the Mount Duneed - 74.7% Kaduna Park - 76.4% Ocean Grove - 64.7% catchments where Lifestyle For personal use only $700 $700 $700 Communities is selling $600 $600 $600 increased in 2018 605
Slide 11: 2.2 Lifestyle Wellness
2.2 Lifestyle Wellness Putting the extra in the ordinary For personal use only Lifestyle's Wellness programme continues to gain momentum and participation, particularly with the emerging baby boomer, through: • Enabling homeowners to customise their lifestyle before they move in, creating a personal
Slide 12: 2.3 Sales and Settlements
2.3 Sales and Settlements For personal use only • The Company had limited new homes available for sale during 1HFY19, although this No.of Community Homes Sold % Sold will change as the Company commences actively selling new communities at Kaduna Park, Wollert North and Plumpton during the next six m
Slide 13: 2.4 Sales rates
2.4 Sales rates Sales profile from date of first sale For personal use only • Dual consultants at each community and Berwick Waters Bittern 200 additional sales support resources to optimise the customer experience • Additional training for the sales team to adapt Chelsea Heights to changing market
Slide 14: 2.5 Land Acquisitions & Development Update
2.5 Land Acquisitions & Development Update For personal use only • Land settled in the first quarter of FY19 • Land expected to settle during FY19 • Clubhouse and Aqua Club officially opened in January 2019 • Sales launched in September 2018 • Construction expected to commence in the fourth quarter
Slide 15: 2.6 Financial Results
2.6 Financial Results There are two components to Home sites (annuities) under management (1) For personal use only the annuity stream: 2200 2,133(2) 1. Site Rental Fee 2000 - $179 per single and $207 per couple per week per home 1800 - Indexed at greater of CPI or 3.5% p.a. 1600 - Gross rental inco
Slide 16: 2.7 Income Statement
2.7 Income Statement For personal use only • Net profit attributable to shareholders increased by 38% to $21.9m 1HFY19 1HFY18 % Income statement ($’000) ($’000) Movement • Gross profit from home settlements increased to $14.6m due to a 35% Home settlement revenue 62,962 46,637 35.0% increase in se
Slide 17: 2.8 Balance Sheet
2.8 Balance Sheet • Inventories increased due to a build up of completed homes at Ocean Grove For personal use only which were delayed in settlement due to delays with the public access road. 1HFY19 2HFY18 % The community opened in late December and the inventory will reduce in the Balance sheet hig
Slide 18: 2.9 Cash Flow
2.9 Cash Flow For personal use only • The $5.5 million outflow from operations included cash draw for 1HFY19 1HFY18 Cash Flow highlights Bittern and Ocean Grove of $17.8 million as the projects were in their ($’000) ($’000) development phase Receipts from customers 76,481 63,683 Payments to supplier
Slide 19: Outlook
For personal use only Outlook Section 3 19
Slide 20: 3.1 Settlement Goals
3.1 Settlement Goals New sales Settlements of 630-695 For personal use only • Settlements in FY19 expected to be in the range of 310 to 350 settlements expected to be delivered • The settlement ranges constitute a forecast for FY19 and a in FY19 and FY20 projection for FY20 which is indicative only.
Slide 21: 3.2 Likely Home Settlement Program
3.2 Likely Home Settlement Program For personal use only Community FY19 FY20 FY21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Shepparton Geelong Berwick Waters Bittern Ocean Grove Mount Duneed Kaduna Park(1) Wollert North(1) Plumpton(1) Represents tail of development which is often a slower settlement rate
Slide 22: 3.3 Dividend Policy
3.3 Dividend Policy For personal use only As a general principle, the Board of Lifestyle Communities intends to pay dividends out of post tax, operating cashflow generated from community management including: • Operating cash flow generated from community management (net rental and DMF) • Apportionm
Slide 23: Summary
Section 4 For personal use only Summary Lifestyle Berwick Waters 23
Slide 24: 4.1 Summary
4.1 Summary • 1HFY19 delivered 186 settlements For personal use only • The recently announced Plumpton acquisition and the extension of the Wollert North site have increased the total portfolio to 3,364 homes(1) • Annuity income from site rental fees grew by $1.7m to $9.8m for the half year as a res
Slide 25: Appendix
Appendix For personal use only Lifestyle Berwick Waters 25
Slide 26: A.1 Model of Living
A.1 Model of Living How does the Lifestyle Communities model of living work? For personal use only Homeowners at Lifestyle Communities own their own home and lease the land upon which their Homeowners at homes are located, via a weekly site fee. Lifestyle Communities are protected by the Residential
Slide 27: A.2 Growing Recurring Revenue
A.2 Growing Recurring Revenue The speed at which Lifestyle can create new communities is limited by the size of the capital Lifestyle's business has two core elements pool and the speed at which it can recover its capital through new home settlements. For personal use only 1. Creating communities 2.
Slide 28: A.3 Industry Dynamics
A.3 Industry Dynamics Key themes The industry fundamentals are driven by favourable medium term demographic trends For personal use only Strong Growth In Demand Expected Housing Affordability Baby Boomers Supply • The population aged 55 and over • Substantial growth in house • Want to maintain contr
Slide 29: A.4 Land Acquisition Strategy
A.4 Land Acquisition Strategy For personal use only Focused on Melbourne and Geelong’s growth corridors Lifestyle Communities undertakes a detailed vetting of each potential • As market softens there are increased site, and prioritises acquisition of sites opportunities to buy super lots from develo
Slide 30: A.5 Sales and Settlements
A.5 Sales and Settlements New home Resale homes net sales Net sales commitments Resale home settlements For personal use only settlements commitments Mature Communities 1HFY19 1HFY18 1HFY19 1HFY18 1HFY19 1HFY18 1HFY19 1HFY18 Brookfield at Melton - - - - 6 8 9 4 Seasons - - - - 2 - 1 - Warragul - - -
Slide 31: A.6 Deferred Management Fees
A.6 Deferred Management Fees Casey Chelsea Brookfield Seasons Warragul Shepparton Hastings Lyndarum Officer Geelong Total For personal use only Fields Heights Historical resales(1) 119 26 55 41 12 30 25 4 5 2 319 Average tenure (years) 6.1 5.3 4.4 3.5 3.3 3.1 2.5 2.6 1.6 2.1 4.6 Average price growth
Slide 32: A.7 Cash Flow Analysis (1HFY19)
A.7 Cash Flow Analysis 1HFY19 For personal use only Supplementary Cash Flow Analysis for Casey Chelsea Berwick Ocean Mount Kaduna Wollert Brookfield Seasons Warragul Shepparton Hastings Lyndarum Geelong Officer Bittern Plumpton Total 1HFY19 Fields Heights Waters Grove Duneed Park North Total Number
Slide 33: A.8 Cash Flow Analysis (1HFY18)
A.8 Cash Flow Analysis 1HFY18 For personal use only Supplementary Cash Flow Casey Chelsea Berwick Ocean Mount Kaduna Brookfield Seasons Warragul Shepparton Hastings Lyndarum Geelong Officer Bittern Total Analysis for 1HFY18 Fields(3) Heights(3) Waters Grove Duneed Park Total Number of Homes 228 136
Slide 34: Important notice and disclaimer
Important notice • This Presentation contains general reliance on anything contained in or omitted looking statements. Such statements are background information about Lifestyle from this presentation. subject to significant assumptions, risks and and disclaimer Communities Limited (LIC) and its act
Slide 35: Lifestyle Communities Limited
For personal use only LIFESTYLE COMMUNITIES LIMITED Level 2, 25 Ross Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au LIFESTYLE COMMUNITIES LIMITED A BUSINESS FOR PURPOSE 35
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