Slide 1: FY09 Results Presentation
Peet Limited FY09 Results Presentation August 2009 1
Slide 2: Contents
Contents » Overview » Financial performance » Peet trading update and strategy » Outlook » Appendices » Detailed financial statements » Funds Management division » Development division 2 2 Peet Limited | Enriching lives since 1895
Slide 3: Overview
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Slide 4: Key messages
Key messages » Solid operating performance in challenging trading conditions » Good capital management, disciplined approach to be maintained » Strengthened balance sheet – capital raising and gearing reduction » Debt facilities have been extended » New syndicate launch in August 2009 » Economic con
Slide 5: FY09 factors
FY09 factors » Tighter margins » highly competitive environment » part of capital recycling strategy » strategic decision to meet the market » Funds management – no new syndications in FY09 » Improved affordability » FHOB, FHOG, stamp duty relief, low interest rates, industry incentives » flow‐on to
Slide 6: Financial performance
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Slide 7: Group key financial highlights
Group key financial highlights » Increased revenue from developments and Funds $m FY09 FY08 Var (%) Management due to increased lot sales Revenue 176.8 168.0 5% » Operating EBITDA (pre write‐down of inventories) of EBITDA4 57.2 78.5 (27%) $57.2m, a decrease of 27% pcp Operating NPAT 31.2 49.3 (37%)
Slide 8: Group operating performance
Group operating performance Key performance statistics FY09 EBITDA composition by business type1 $m FY09 FY08 Var (%) Revenue 176.8 168.0 5% Operating expenses (119.6) (89.5) (34%) EBITDA1 57.2 78.5 (27%) Net EBITDA margin 32% 47% (32%) Key operating statistics FY09 EBITDA composition by geography1
Slide 9: FM operating performance
FM operating performance Key performance statistics FY09 FM revenue composition by type $m FY09 FY08 Var (%) Revenue 36.6 34.1 7% Operating expenses (13.3) (8.7) (53%) EBITDA 23.3 25.4 (8%) Net EBITDA margin 64% 74% (14%) Key operating statistics FY09 FM revenue composition by geography $m FY09 FY08
Slide 10: JV operating performance
JV operating performance Key performance statistics $m FY09 FY08 Var (%) » Significant increase in lot sales from joint venture projects Revenue 11.4 19.8 (42%) » Earnings from joint ventures were Operating expenses (10.2) (15.5) (34%) down due to timing of lot EBITDA 1.2 4.3 (72%) settlements Net E
Slide 11: Development operating performance
Development operating performance Key performance statistics FY09 revenue composition by geography $m FY09 FY08 Var (%) Revenue 125.9 107.5 17% Operating expenses1 (94.5) (64.4) (47%) Write‐down in Inventory3 27.3 1.9 ‐ EBITDA2 31.5 43.1 (27%) Net EBITDA margin2 25% 40% (37%) Key operating statistic
Slide 12: Cash flow analysis
Cash flow analysis » Operating cash flow influenced by focus on » working capital optimisations, i.e. sales activity » cost‐conscious management » deferral of developments » fewer cancellations of agreed sales 12 12 Peet Limited | Enriching lives since 1895
Slide 13: Inventory revaluations
Inventory revaluations » Company‐owned development land bank on‐completion value of $2.7bn » approximately 15,800 lots across 39 projects; and » industrial land holdings identified for future divestment or joint venture following rezoning » Peet has internally reviewed its portfolio. This process wa
Slide 14: Capital management
Capital management » Core debt facility of $250m extended for a further 3 years to Oct. 2012 » no debt maturity until July 2011 » single banking relationship for over 114 years » Gearing covenant based on market value of inventory » Compliant with all debt covenants » significant headroom to covenan
Slide 15: Peet trading update and strategy
Peet trading update and strategy 15
Slide 16: Peet investment case
Peet investment case Australia’s only pure‐play residential exposure; ability to leverage existing platform Pure play » Australia’s only scale pure‐play land development business exposure » Disciplined focus on core competency – not distracted by other operations » Capital efficient business model B
Slide 17: Business model
Business model High margin business with operating synergies across divisions Target Capital Land bank Operations EBIT margin employed3 » Acquisition Funds Lots: 18,642 » Development management Management1 60‐70% $120m GDV ($bn): 4.2 » Marketing No. of projects: 31 » Sales management 59% of EBIT2 »
Slide 18: Scale and diversification
Scale and diversification » Strong market position especially in metropolitan regions in Vic & WA » Sizeable land bank creates scale benefits Western Australia Victoria Queensland New South Wales 18 18 Peet Limited | Enriching lives since 1895
Slide 19: Sales update – 2H09 & FY10 YTD
Sales update – 2H09 & FY10 YTD » Over 1,500 sales recorded in 2H09 (up 57% from 1H09) » Sales of 2,409 lots in FY09; strong increase in sales particularly in Q309 » Already 423 gross lot sales in FY10 YTD1 » 1,035 lots under contract ($200.5m)1; lot increase of approx. 10.8% vs. 31 Dec 2008 Lot sale
Slide 20: New syndicate launched
New syndicate launched Peet Point Cook Kingsford Syndicate » New syndicate to be launch in late August 2009 » Total equity raising of $22 million » Closing date 30 October 2009 » Development of 567‐lot community in Point Cook, Victoria » Offer underwritten by Peet » The property is currently owned b
Slide 21: Strategy
Strategy » Peet’s strategic priorities remain » focusing on core businesses of funds management and residential development » continuing expansion of retail platform nationally » continuing to meet the needs of its core markets – first and second homebuyers – with a range of product at affordable pr
Slide 22: Outlook
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Slide 23: Land / residential investment case
Land / residential investment case Medium and long‐term fundamentals for residential land remain compelling » Mortgage affordability at historical highs due to low interest rates and government incentives » Continued federal and state government support of sector » key contributor to the national ec
Slide 24: Australian economic fundamentals
Australian economic fundamentals Several signs that the worst is over » Unemployment rate has been rising, but is not forecast to increase markedly above 7% » Reduction in hours worked rather than jobs supporting consumer confidence » Population continues to grow, while building supply falls short o
Slide 25: Australian residential market fundamentals
Australian residential market fundamentals Housing finance & building approvals are rising despite increasing unemployment » First home owners have been re‐entering the market due to improving affordability » HIA private house sales rose 18% in 2H09 compared to 1H09 » Peet experienced a solid pick u
Slide 26: Outlook
Outlook » Peet’s core market is first and second home buyers » first home buyers’ market likely to remain strong in 1H10, supported by grants » second+ home buyers and investors re‐entering the market as confidence increases » interest rates still at historically low levels » significantly improved
Slide 27: Appendix: Detailed financial statements
Appendix: Detailed financial statements 27
Slide 28: Summary income statement
Summary income statement $m FY09 FY08 Var (%) Funds management 36.6 34.1 7% Development 125.9 107.5 17% Other1 14.3 26.4 (46%) Revenue 176.8 168.0 5% EBITDA (pre inventory write‐downs) 57.2 78.5 (27%) Finance costs2 (12.0) (6.0) (100%) Depreciation and amortisation (0.7) (0.5) (40% ) NPBT (pre‐inven
Slide 29: Summary balance sheet
Summary balance sheet $m 30 Jun 09 30 June 08 Assets Cash 123.1 50.3 Receivables 32.9 36.2 Inventories 438.1 460.0 Investments accounted for using the equity method 32.7 26.2 Other 30.4 6.5 Total assets 657.2 579.2 Liabilities Trade and other payables 24.9 27.6 Land vendor liabilities 88.6 104.0 Int
Slide 30: Appendix: Funds Management division
Appendix: Funds Management division 30
Slide 31: FM key highlights
FM key highlights » Revenue of $36.6m, an increase of 7% pcp » Operating EBITDA of $23.3m, a decrease of 8% pcp » EBITDA margin of 64% » margin remains highly attractive » moderation in margin and EBITDA given deferral of new syndication product » Peet has a strong syndication pipeline and continues
Slide 32: FM and JV managed pipeline
FM and JV managed pipeline » 18,642 lots under management; estimated on‐completion value of $4.2 billion1 No. Lots2,3 2010 2011 2012 2013 2014 Botanic Village 760 Brimbank Gardens 468 Brookland Greens 122 Cardinia Lakes 411 Cranbourne Central 712 VIC Cranbourne Syndicate 711 Melton 540 Point Cook Ju
Slide 33: Composition of FM and JV managed pipeline
Composition of FM and JV managed pipeline » Funds management business is well positioned Geographic composition of land bank by value » Growth in revenues to come from » 2 new syndicated projects expected to contribute to earnings in FY10 » increased profit shares on more recently established syndic
Slide 34: Peet Alkimos – update
Peet Alkimos –update » Peet’s largest managed fund » comprises approximately 3,300 dwellings » est. end value of $1bn (today’s $) over 11 yrs » Peet equity interest approx. $20m / 13% » institutional partners » Planning and approvals progressing on track » State Government approval to District Struc
Slide 35: Appendix: Development division
Appendix: Development division 35
Slide 36: Development key highlights
Development key highlights » Revenue of $125.9m, an increase of 17% pcp » Operating EBITDA (pre write‐downs) of $31.5m, a decrease of 27% pcp » EBITDA margin has moderated to 25% (pre write‐downs) » balancing capital replenishment and earnings » reflects company’s decision to temporarily defer some
Slide 37: Development pipeline
Development pipeline » 15,777 lots owned; estimated on‐completion value of $2.7 billion1 » A total of 39 Company owned projects – 25 located across east coast » Number of owned projects have historically low cost base No. Lots2,3 2010 2011 2012 2013 2014 Kingsford 567 Craigieburn 1,458 Cranbourne 78
Slide 38: Composition of development pipeline
Composition of development pipeline » Targeted towards first and second home Geographic composition of land bank by value buyer market » Land bank located in right markets » Primarily Vic and WA » Company‐owned development pipeline has been strategically repositioned towards eastern states over the
Slide 39: 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. Subject to any terms implied by law and which cannot be excluded,