Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — H1 FY2016 Earnings Presentation
28 slides from Lifestyle Communities's earnings presentation, Feb 18, 2016
Slide 1: Results Presentation Half-year ended 31 December 2015
For personal use only Results Presentation Half-year ended 31 December 2015 18 February 2016 LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life 1
Slide 2: Business Snapshot and Financial Summary
OVERVIEW Business Snapshot Financial Summary BUSINESS • Founded in 2003 1HFY2016 FY2015 ($ Million) ($ Million) SNAPSHOT For personal use only • Develop and manage land lease communities which generate long-term Net profit after tax attributable to shareholders $8.9 $16.7 sustainable revenue streams
Slide 3: Community Locations
OVERVIEW 12 communities in Focus remains COMMUNITY planning, development or in Victoria LOCATIONS under management For personal use only Victoria provides: • Favourable planning legislation • Better access to zoned, flat land for development Community Homes Settled • Lowest saturation of land lease
Slide 4: Portfolio continues to sell through and grow
OVERVIEW Lifestyle Communities’ portfolio PORTFOLIO continues to sell through and grow SNAPSHOT For personal use only 31 DEC 2015 Communities Total home sites in Home sites sold & Home sites sold & Home sites occupied or sold communities occupied awaiting settlement and awaiting settlement # % Exist
Slide 5: A proven business model structured for sustainable growth
OVERVIEW A proven business model Home sites (annuities) under management (1) 1HFY2016 structured for sustainable 1300 SNAPSHOT growth For personal use only 1200 1100 Business Snapshot • Solid half-year of settlements (110) 1000 and sales (82)(1) 900 • 1,256 occupied home sites (1) • Over 1,850 homeo
Slide 6: Our product keeps evolving to meet the needs of the emerging baby boomer
GEELONG Our product keeps evolving COMMUNITY to meet the needs of the emerging baby boomer For personal use only LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life 6
Slide 7: Growing Annuity Income Streams
FINANCIAL Over 10 Years of Annuity Income RESULTS Growing Annuity Income Streams For personal use only $7,000,000 There are two components $6,000,000 to the annuity stream: $5,000,000 1. Site Rental Fee • Approximately $171.00 per week $4,000,000 per home $3,000,000 • Indexed at greater of CPI or 3.
Slide 8: Sales and Settlements
SALES AND Approximately one in three sales are SETTLEMENTS coming from customer referrals For personal use only Sales Commitments • 82 new home sales in 1HFY2016 (1) • Shepparton sales exceeded expectations during the half-year achieving 32 sales (compared to 54 in FY2015) • Geelong has achieved sal
Slide 9: Sales and Settlements (continued)
SALES AND New Home New homes - Resale homes Resale homes - SETTLEMENTS Settlements net sales commitments settlements net sales commitments (CONTINUED) For personal use only 1HFY2016 1HFY2015 1HFY2016 1HFY2015 1HFY2016 1HFY2015 1HFY2016 1HFY2015 Brookfield - - - - 16 8 9 9 Tarneit - 1 - - 3 3 4 4 War
Slide 10: Strategy
STRATEGY For personal use only • Build on the key thematics of the ageing population, affordability and the emerging baby boomer • Maintain a strong balance sheet and liquidity buffer without requiring further equity • Pay dividends from after tax operating cash flow generated from community managem
Slide 11: Business Model
BUSINESS Lifestyle Communities aims to The growing level of free cash flow from the MODEL recover 100% of its project community management business provides related costs from home sales the basis for future dividends For personal use only Development Business Community Management Business Total ann
Slide 12: Portfolio Expansion
PORTFOLIO Expansion of Shepparton Total home sites in the portfolio EXPANSION community and additional increased by 95 homes to 2,255 land at Bittern homes as a result of the expansion For personal use only During the half-year both the Shepparton and Bittern sites were expanded: 1. Shepparton site
Slide 13: Market Environment
MARKET ENVIRONMENT For personal use only Housing Market • The continued strength of the Melbourne housing market has seen positive consumer confidence and an ability to sell their existing homes. Land Access • Focused on acquiring land in the key growth corridors in Melbourne. Not withstanding the m
Slide 14: Debt Re-financing
DEBT New corporate facility provides PREVIOUS POSITION RE-FINANCING greater flexibility to plan the construction of new communities For personal use only • In August 2015 the Company entered into a five year, $80 million facility with Westpac to replace existing core and development facilities • New
Slide 15: Profit & Loss
PROFIT • Net profit attributable to shareholders up 61% to $8.9 million (underlying net profit attributable Profit loss highlights 1HFY2015 ($’000) 1HFY2016 ($’000) % Movement & LOSS to shareholders up 24% to $8.9 million after Home settlement revenue 25,549 30,025 18% For personal use only adjusti
Slide 16: Balance Sheet
BALANCE Balance sheet Balance sheet highlights 30 JUN 15 31 DEC 15 % SHEET remains strong Cash and cash on deposit ($’000) 12,999 ($’000) 4,711 Movement For personal use only • Gearing (net debt to net debt plus equity) was Inventories 30,644 42,364 23.7% at year end Investment properties 132,757 15
Slide 17: Cash Flow
CASH FLOW • Cash flows from operations down by 400% to ($9.6) million, adjusted cash flows from Cash Flow highlights 1HFY2015 ($’000) 1HFY2016 ($’000) operations (excluding project capital Receipts from customers 34,213 40,952 For personal use only expenditure) down by 21% to $6.7 million Payments t
Slide 18: Dividend Policy
DIVIDEND Lifestyle Communities intends to pay dividends The growing level of free cash flow POLICY out of operating cash flow from the community from the annuities provides the basis management business for increasing dividends over time For personal use only As a general principle, the Board of Lif
Slide 19: Likely Settlement Programme
LIKELY Currently 2,255 homes SETTLEMENT in the portfolio (1) PROGRAMME For personal use only Community FY16 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Warragul Hastings Shepparton Wollert Geelong Officer Berwick Waters Bittern(2) Represents tail of development which is
Slide 20: Outlook
OUTLOOK Lifestyle Communities Lifestyle Communities’ model is driven capitalises on the solid by affordability, the ageing population base established and the emerging baby boomer For personal use only for future growth • Emerging baby boomer continues to drive customer interest • Approximately one
Slide 21: Supplementary Cash Flow Analysis for 1HFY2016
CASHFLOW Supplementary Cash Flow Analysis for 1HFY2016 Melton Tarneit Warragul Cranbourne(3) Shepparton Chelsea Heights(3) Hastings Wollert Geelong Rosebud Officer Berwick Waters Bittern Total ANALYSIS Total Number of Homes 228 136 182 217 268 186 141 154 164 - 151 220 208 2,255 1HFY2016 For persona
Slide 22: Summary
SUMMARY • Solid half-year of settlements (110)(1) and sales (82)(1) in line with expectations • The recently announced expansion of For personal use only Shepparton and Bittern has provided a total portfolio of 2,255 homes (2) of which 56% are settled and 63% are sold • Community cash flows (net con
Slide 23: A.1 Market Strategy: Straddling two segments
A.1 Straddling two segments Lifestyle Communities’ business MARKET but focusing on the ageing model is well placed to capitalise STRATEGY baby boomer on this emerging customer For personal use only War Generation (1925-1945) Baby Boomer Generation (1946-1964) • Aged 70+ • Aged 51-69 • Negative trigg
Slide 24: A.2 Market: Victorian Population Growth
A.2 MARKET As at 30 June 2013 there were Lifestyle Communities is well VICTORIAN over 574,000 Victorians aged positioned to meet the needs POPULATION over 70 and over 906,000 aged of the baby boomer age wave For personal use only GROWTH between 55 and 69 85+ (114k) War Generation Average age Baby Bo
Slide 25: A.3 Market: The Emerging Market Gap
A.3 MARKET The two key emerging THE EMERGING trends come together MARKET GAP to create the Lifestyle For personal use only business model Affordability Baby Boomer • Opportunity to create a • Wants to maintain control more affordable model • Want to own their home • Rents sustainable for • Wants to
Slide 26: A.4 Market: Marketing
A.4 MARKET Lifestyle Communities’ Digital marketing is driving MARKETING marketing targets the future growth emerging baby boomer For personal use only RESORT LIVING Join the many happy homeowners over 50 who have discovered the upsides to downsizing at Lifestyle Communities. THAT ISN’T JUST A major
Slide 27: Important Notice and Disclaimer
IMPORTANT • This Presentation contains general background information about Lifestyle Communities only and should not be relied upon as (and is not) an indication of future performance. not to place undue reliance on forward-looking statements and LIC assumes no obligation to NOTICE AND Limited (LIC
Slide 28: Downsize to a bigger life
For personal use only DOWNSIZE TO A BIGGER LIFE LIFESTYLE COMMUNITIES LIMITED Level 2, 25 Ross Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life 28
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