Slide 1: 1H20 Results Presentation
1H20 RESULTS PRESENTATION 26 FEBRUARY 2020
Slide 2: Overview
OVERVIEW 2 FY19 RESULTS | AUGUST 2019 | 2
Slide 3: Peet is well positioned to leverage its unique model
PEET IS WELL POSITIONED TO LEVERAGE ITS UNQIUE MODEL MEDIUM TERM OUTLOOK SUPPORTED BY ONGOING MARKET RECOVERY 1H FY20 result in-line with expectations given significant second half weighting of forecast 1 settlements Recovery in market conditions demonstrated by 52% increase in sales during 1H20, co
Slide 4: Largest 'pure play' residential developer in Australia
LARGEST ‘PURE PLAY’ RESIDENTIAL DEVELOPER IN AUSTRALIA INTEGRATED MODEL WITH PROVEN CAPITAL PARTNERING CAPABILITY • Property development company established in 1895 • Listed on the ASX in 2004 Significant and diversified land bank encompassing more than 49,000 lots across 51 projects Integrated
Slide 5: Broad customer and product reach
BROAD CUSTOMER AND PRODUCT REACH SCALE PIPELINE WITH LOW COST BASE PROVIDING SOLID EMBEDDED MARGINS Peet manages a broad property portfolio, encompassing 49,000 lots across 51 projects 49,058 Diversified land bank LOTS strategically located in growth corridors of major cities in every mainland state
Slide 6: Significant operating leverage potential
SIGNIFICANT OPERATING LEVERAGE POTENTIAL c.80% OF LAND BANK EXPECTED TO BE IN PRODUCTION BY FY22 60,000 c.80% Pipeline in 50,000 production 49,058 lots c.65% Pipeline in Projects: 8 Lots: 9,382 NO. OF LOT/UNITS production 39,676 lots 40,000 Projects: 13 30,501 lots Lots: 9,175 30,000 20,000 Projects
Slide 7: Net Asset Value (NAV)
NET ASSET VALUE (NAV) SIGNIFICANT FUNDS MANAGEMENT PLATFORM VALUE NOT CAPTURED IN NTA NET ASSET VALUATION - $2.1bn in Assets Under Management PEET CAPITAL THIRD PARTY CAPITAL NTA PER SHARE3: $1.18 NAV PEET INVENTORIES PEET CO-INVESTMENTS FUNDS MANAGEMENT AND JV $539 million1 $328 million1 $1,241 mil
Slide 8: Delivering against our strategy
DELIVERING AGAINST OUR STRATEGY PORTFOLIO WELL POSITIONED FOR POSITIVE MEDIUM TO LONG TERM GROWTH AND VALUE CREATION STRATEGY KEY ACHIEVEMENTS (1H20) Invest in high quality land in strategic • Two medium density townhouse sites and one broadacre INVEST locations across country project secured during
Slide 9: Results Overview
RESULTS OVERVIEW 1H20 RESULTS | FEBRUARY 2020 | 9
Slide 10: Group 1H20 financial results
GROUP 1H20 FINANCIAL RESULTS RESULT IN LINE WITH EXPECTATIONS GIVEN SIGNIFICANT SECOND HALF SETTLEMENT SKEW KEY PERFORMANCE STATISTICS 1H20 1H19 VAR (%) Lot sales1 1,012 964 5% Group sales were up due to improving east coast markets and lower cancellation rates as restrictive lending conditions grad
Slide 11: Group balance sheet
GROUP BALANCE SHEET CONTINUED EXECUTION OF CAPITAL MANAGEMENT STRATEGY CAPITAL MANAGEMENT METRICS 1H20 FY19 NET DEBT6 ($M) AND GEARING4 (%) Cash at bank1 $29.2m $33.6m 28% 2 Bank debt $53.5m $23.2m 25% 23% Peet bonds/convertible notes3 $225.0m $225.0m 19% Gearing4 28.1% 24.6% 247 Interest cover rati
Slide 12: Group cash flow summary
GROUP CASH FLOW SUMMARY OPERATING CASH FLOW IMPACTED BY LOWER SETTLEMENT VOLUMES IN 1H20 FY19 FY18 1H20 1H19 CASH FLOWS RELATED TO OPERATING ACTIVITIES $M $M Receipts from customers 90.8 120.7 Revenue lower due to lower land settlements and development settlement mix Payments for development and inf
Slide 13: Operating Performance
OPERATING PERFORMANCE 1H20 RESULTS | FEBRUARY 2020 | 13
Slide 14: Group operating performance
GROUP OPERATING PERFORMANCE • Contribution from eastern states’ projects 1H20 SETTLEMENT VOLUMES AND GROUP PROFITABILITY represented 82% of EBITDA1,2 IMPACTED BY LOWER SALES VOLUMES IN FY19 - Contribution driven by low cost VIC Development projects - VIC and QLD to benefit most from an improvement i
Slide 15: Group sales and settlement activity
GROUP SALES AND SETTLEMENT ACTIVITY • Group sales1 for 1H20 of 1,012 lots – up 5% - Group sales were up due to improving east coast MARKET IMPROVEMENT DRIVING SALES PERFORMANCE markets and lower cancellation rates as restrictive lending conditions gradually ease - Customers understanding and prepare
Slide 16: Improving sales activity underpinning outlook
IMPROVING SALES ACTIVITY UNDERPINNING OUTLOOK DECEMBER QUARTER SALES UP 54% ON PRIOR QUARTER QUARTERLY SALES1 (LOTS) Strong recovery in sales volumes, albeit off a low base • Notable uptick in December quarter with sales up 54% on prior quarter • VIC and QLD seeing strongest recovery 613 459 505 Enq
Slide 17: Contracts on hand
CONTRACTS ON HAND CONTRACTS ON HAND1 (LOTS) CONTRACTS ON HAND REFLECT IMPROVING MARKET CONDITIONS 2,257 1,496 1,257 Contracts on hand1 have increased by 19% since 30 June 2019 to 1,496 lots • Reflects gradually improving market conditions across eastern states FY18 FY19 1H20 • Restrictive lending co
Slide 18: Outlook
OUTLOOK 1H20 RESULTS | FEBRUARY 2020 | 18
Slide 19: Market volumes and outlook
MARKET VOLUMES AND OUTLOOK CONDITIONS EXPECTED TO IMPROVE ACROSS MOST MARKETS PEET SUMMARY VICTORIA QUEENSLAND WESTERN AUSTRALIA AUSTRALIAN CAPITAL SOUTH AUSTRALIA 1H20 1H20 1H20 TERRITORY 1H20 • Solid economic growth, with 1H20 • Sales volumes and prices • Strengthening population • Despite ongoing
Slide 20: New projects provide medium term earnings visibility
NEW PROJECTS PROVIDE MEDIUM TERM EARNINGS VISIBILITY PIPELINE OF APPROXIMATELY 49,000 LOTS PROVIDING VISIBILITY OF FUTURE EARNINGS FY20 – FY22 NEW PROJECT RELEASE SCHEDULE Up to seven new land projects Project State Segment Commencement of Lots1/Units Project Life and six medium density Sales/Develo
Slide 21: Strong platform for sustainable growth, through cycles
STRONG PLATFORM FOR SUSTAINABLE GROWTH, THROUGH CYCLES TRACK RECORD OF GROWING SHAREHOLDER VALUE OVER THE LONG-TERM • Strategic land bank provides long term earnings visibility SCALE • Counter-cyclical acquisition strategy has allowed the Group to capitalise on value accretive opportunities LAND BAN
Slide 22: Strategic outlook
STRATEGIC OUTLOOK PORTFOLIO WELL POSITIONED FOR POSITIVE MEDIUM TO LONG TERM GROWTH AND VALUE CREATION STRATEGY OUTLOOK • Selective acquisition of projects as cycles, markets and Invest in high quality land in strategic opportunities allow to restock pipeline INVEST locations across country • Focus
Slide 23: Market outlook
MARKET OUTLOOK FOCUSED ON POSITIONING FOR AN IMPROVING MARKET THROUGH A CONSERVATIVE APPROACH TO PROJECT DELIVERY AND IDENTIFYING GROWTH OPPORTUNITIES • Steady employment growth, continued low interest rates, income tax cuts and significant Government infrastructure investment are supporting underly
Slide 24: Appendices
APPENDICES 1H20 RESULTS | FEBRUARY 2020 | 24
Slide 25: FM operating performance
FM OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H20 1H19 VAR (%) FM sales were up due to improving east coast markets and Lot sales1 566 474 19% lower cancellation rates as restrictive lending conditions ease Lot settlements1 408 938 (56%) Revenue Reflects the impact of lower sales volumes in F
Slide 26: JV operating performance
JV OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H20 1H19 VAR (%) Lot sales1 194 205 (5%) Reflects the impact of lower sales volumes in FY19 carrying into Lot settlements1 197 262 (25%) FY20 Revenue $19.5m $18.8m 4% Share of net profit of equity accounted investments $1.3m $2.4m (46%) Equity acc
Slide 27: Development operating performance
DEVELOPMENT OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H20 1H19 VAR (%) Lot sales1 252 285 (12%) Lower sales reflect first phase of Aston (VIC) project developing out Lot settlements1 168 217 (23%) Reflects the impact of lower sales volumes in FY19 carrying into Land only 131 193 (32%) FY20 M
Slide 28: Summary income statement
SUMMARY INCOME STATEMENT 1H20 1H19 Var $M $M (%) Funds Management 10.5 14.8 (29%) Development 56.1 73.3 (23%) Joint Venture 19.5 18.8 4% Share of net profit of equity accounted investments 2.4 8.6 (72%) Other1 2.0 1.6 25% Revenue 90.5 117.1 (23%) EBITDA 12.7 36.3 (65%) Finance costs2 (4.4) (7.0) 37%
Slide 29: Summary balance sheet
SUMMARY BALANCE SHEET 1H20 FY19 $M $M Assets Cash and cash equivalents 29.2 33.6 Receivables 120.7 125.2 Inventories 533.6 518.7 Investments accounted for using the equity method 234.7 233.7 Other 16.2 10.9 Total assets 934.4 922.1 Liabilities Payables 53.8 65.7 Land vendor liabilities 6.4 6.4 Borro
Slide 30: Land bank funds management key projects
LAND BANK FUNDS MANAGEMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Alkimos WA $1,144m 2,341 Selling Burns Beach WA $205m 347 Selling Eglinton WA $252m 1,041 Planning Start up Selling Golden Bay WA $144m 718 Selling Completion Lakelands WA $176m
Slide 31: Land bank development key projects
LAND BANK DEVELOPMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Brigadoon WA $38m 91 Selling Greenlea WA $54m 273 Selling Completion Mundijong WA $187m 781 Planning Start up Selling Other WA $656m 4,041 Planning Gladstone QLD $86m 333 Selling Fla
Slide 32: Land bank joint venture key projects
LAND BANK JOINT VENTURE KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Wellard WA $105m 512 Selling Brabham WA $728m 3,333 Start up Selling Pier Street WA $98m 186 Planning Start up Selling Completion Redbank Plains QLD $194m 835 Selling Googong3 NSW
Slide 33: Disclaimer
DISCLAIMER While every effort is made to provide accurate and complete information, Peet does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. This presentation contains forward-looking statements, including sta