Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2023 Earnings Presentation
42 slides from Lifestyle Communities's earnings presentation, Aug 16, 2023
Slide 1: A business for purpose
Results A business for purpose Presentation for the year ended 30 June 2023 20 Celebrating years of Lifestyle
Slide 2: Contents
Contents Appendix Our story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i A.1 Model of living. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 A business for purpose. . . . . . . . . . . . . . . . . . . .
Slide 3: Our story
Our story W e build communities because our homeowners have worked hard for what they have, and they deserve beautifully designed and low maintenance homes in We’re champions for facilitating a bigger life for our concert with best-in-class amenities. We create communities homeowners. A cohort of li
Slide 4: A business for purpose
A business for purpose An empowering and engaging homeowner An affordable housing experience offering option for Australians that reimagines aged over 50. A sustainable traditional retirement. financial model where homeowners can prosper. High quality resort-style facilities that exceed expectation
Slide 5: Overview
Artist impression of Lifestyle St Leonards – The Shores Overview Lifestyle Communities — End of financial year results presentation — June 2023 1
Slide 6: FY23 results snapshot
FY23 results snapshot Overview Key metrics Operating earnings per share Measure FY23 FY22 FY21 FY20 FY19 80 New home settlements Homes 356 401 255 253 337 Established home resales Homes 178 156 121 102 71 Total settled homes (end of year) Homes 3,549 3,193 2,792 2,537 2,284 70 Portfolio + pipeline (
Slide 7: FY23 highlights
FY23 highlights Overview Growing annuity income streams • Celebrated 20 years of operations - Welcomed our 5,000th $50 Homeowner and settled our 3,500th home • Revenue from Community management increased by 16% from $45 $40.6m to $47.2m underpinned by increased annuities from a $12.9m higher number
Slide 8: Portfolio snapshot FY23
Portfolio Overview snapshot FY23 Homes occupied or sold and awaiting settlement Total homes Homes sold Homes sold and Communities in communities and occupied awaiting settlement No. % Established Communities 15 fully completed Communities 2,864 2,864 2,864 100% Communities — under construction Wolle
Slide 9: Lifestyle Meridian Clubhouse
Overview Lifestyle Meridian Clubhouse Lifestyle Communities — End of financial year results presentation — June 2023 5
Slide 10: Portfolio overview and land acquisition strategy
Portfolio overview and land Overview acquisition strategy Focus remains on Melbourne and Geelong’s growth corridors: 30 Communities in planning, development or under management. Yarrawonga • Melbourne has the strategic benefit of flat topography which increases site choice • Multiple communities can
Slide 11: Operating model
Operating model Overview Our Operating Model is unique in the Land Example Project — cumulative cash flows Lease Industry: 80,000 Development Rent DMF 60,000 • Customer centric and purpose driven approach built solely through organic growth over 20 years 40,000 ($000) • Portfolio approach delivering
Slide 12: Protecting our brand
Protecting our brand Overview • Registered owner of the trademark for the brand “Lifestyle Communities” since 2005 Our trademarks • Protects the significant investment we have made in our brand over 20 years Registration number Trademark Registration Class • Whilst we welcome fair competition and gr
Slide 13: How we create value
How we create value Overview We re-imagine over 50s community living for those Our economic value creation who want to live more, not less. Suppliers Team members Shareholders Government Wider Community We are agents of meaningful change, creating long-term value for our homeowners, team members, sh
Slide 14: Measuring social impact on homeowners
Measuring Overview social impact Progress on our journey on homeowners Phase 1 Our approach to sustainability prioritises positive social outcomes for our homeowners. Voice of the Homeowner Surveys In order to drive better outcomes for our homeowners, we are on a journey to conducted twice a year un
Slide 15: Transition to Net Zero 2035
Transition to Overview Net Zero 2035 Operational emissions Traditionally this means a reduction in our Scope 1 and 2 emissions. However, due to the unique nature of our communities and our operational control of the energy procurement mix, we have expanded this target We remain committed to our to i
Slide 16: Operations update
Lifestyle Bellarine Operations update Lifestyle Communities — End of financial year results presentation — June 2023 12
Slide 17: Sales and settlements
Sales and settlements Operations update No. of • 443 new home sales and 356 new home Community homes Sold % sold Settled % settled settlements Wollert 246 197 80% 165 67% • Sales higher than settlements in FY22 and FY23 as Deanside 266 167 63% 134 50% we build up the pipeline of new developments St
Slide 18: Sales rates
Sales rates Operations update Sales profile from date of first sale • Three distinct categories of projects in Market: 220 Wollert 1. Northern Growth Corridor: Wollert, Meridian St Leonards - The Waves (Mar-19) 200 Deanside, Woodlea performing in line with (Sep-21) (Aug-20) Ridgelea historical avera
Slide 19: Club Lifestyle
Club Lifestyle Operations update Club Lifestyle is officially open! For months now, our homeowners have been enjoying exclusive access to luxurious villas, furnished motorhomes and serviced van sites at our waterfront Bellarine site, at no extra cost*. This is part of our ongoing commitment to creat
Slide 20: New land acquisitions
New land acquisitions Operations update Clifton Springs • Established brand and operating platform in corridor • 6th project on the Bellarine Peninsula and 8th in wider Geelong catchment • Leverage referral from St Leonards and Lifestyle Bellarine • 8.75 ha - approx 210 homes • Commence in 18–24 mon
Slide 21: Financial results
Lifestyle Phillip Island Financial results Lifestyle Communities — End of financial year results presentation — June 2023 17
Slide 22: Growing annuity income stream
Growing annuity Financial results income stream There are two components to the Home sites under management annuity income stream: 4,000 Site rental fee 3,549 2 3,500 • $212 per single and $245 per couple, per 3,193 week, per home 3,000 2,792 • Indexed at greater of CPI or 3.5% p.a. 2,537 • Gross re
Slide 23: Income statement
Income statement Financial results $000s FY23 FY22 FY21 • Operating profit rose 15.8% to $71.1m underpinned by increased Community operations annuities from a higher number of homes under management Site rental 34,244 29,712 25,043 Deferred management fees 12,921 10,906 7,342 • Community operations
Slide 24: Balance sheet
Balance sheet Financial results • The inventory balance includes: Balance sheet highlights – $103.2m for display homes and houses in progress $000s FY23 FY22 FY21 (FY22: $49.3m) Cash 1,233 1,893 2,300 – $90.3m for Civil and Infrastructure works on developments in Inventories 193,555 135,679 125,243
Slide 25: Cash flow
Cash flow Financial results FY23 FY22 FY21 • Community operations cash flows: Community operations cash flows – increased annuities due to more homes under management Site rentals 34.2 29.7 25.0 Deferred Management Fees 12.9 10.9 7.3 – strong price growth in resales Community operating costs (15.2)
Slide 26: Debt covenants and key metrics
Debt covenants and Financial results key metrics Lifestyle has three main debt and lending covenants which are regularly stress tested. They are: Secured property % In October 2022 the Company agreed terms with its lending LVR <65% 1 ICR>2x group, The Commonwealth Bank of Australia, National Austral
Slide 27: Outlook
Artist impression of Lifestyle Riverfield Clubhouse Outlook Lifestyle Communities — End of financial year results presentation — June 2023 23
Slide 28: Settlement progress
Settlement progress Outlook • Finished the year with 3,549 settled homes under management Settlement Profile of Communities in Development across 21 operating communities FY24 FY25 FY26 • Increased total portfolio of completed homes, homes under development, and homes yet to be developed to 5,912 Co
Slide 29: Outlook
Outlook Outlook • Lifestyle Communities has a focused strategy to service a niche — FY22 FY23 FY24 FY25 FY26 providing high quality affordable housing to downsizers in Victoria New home settlements • Focused on Melbourne’s growth corridors as well as key Victorian FY22 — 3 year range 1,100 to 1,300
Slide 30: Appendix
Lifestyle Mt Duneed Artist impression of Lifestyle St Leonards courtyard Appendix Lifestyle Communities — End of financial year results presentation — June 2023 26
Slide 31: A.1 Model of living
A.1 Model of living Appendix How does the Lifestyle Communities’ model of living work? Homeowners at Lifestyle Communities own their own home and lease the land upon which their homes are located, via a weekly site fee and a deferred management fee. 75-80% On average, homes typically priced at 75-80
Slide 32: A.2 Macro themes
A.2 Macro themes Appendix Over 50s and First Home Buyers driven to action regardless of the cycle Lifestyle Communities provides a credible option even in falling market Ageing Population First Home Buyers • Downsizing releases equity to improve living • Shortage of affordable housing options • Typi
Slide 33: A.3 Growing recurring revenue stream
A.3 Growing recurring Appendix revenue stream Lifestyle Communities’ business has two core elements 1. Creating communities 2. Managing communities A mix of equity and debt capital is used to develop greenfield Completed communities generate recurring revenue streams which are sites to create new co
Slide 34: A.4 Dividend policy
A.4 Dividend policy Dividend growth over time As a general principle, Lifestyle Communities intends to pay dividends out of post-tax operating cashflow 14 generated from community management including: • Operating cash flow generated from community 12 11.5 management (net rental and DMF) 10.5 • Appo
Slide 35: A.5 Investment property valuation inputs
A.5 Investment property valuation inputs Appendix Last Cap rate (%) DMF values per home ($) Net rental per home ($) Valuation ($m) independent Valuation summary valuation date FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 Land cost Brookfield Jun-22 5.25% 5.25% 50,877 50,877 8,347 7,881 47.8 45.7 6.8 Seas
Slide 36: A.6 Investment property valuations
A.6 Investment property valuations Appendix Investment At fair value Total homes Homes occupied properties at cost ($m) Mature Communities Brookfield at Melton 228 228 6.76 47.85 Seasons at Tarneit 136 136 3.68 23.59 Warragul 182 182 2.53 36.86 Casey Fields at Cranbourne (JV) 217 217 3.37 29.22 Shep
Slide 37: A.7 Deferred management fees
A.7 Deferred management fees Appendix FY23 FY22 FY21 FY20 FY19 No. of resales 178 156 121 102 71 Average tenure (years) 6.6 6.1 6.0 5.5 5.3 Average DMF rate 17.1% 16.9% 16.7% 15.8% 16.4% Average purchase price (move in) 324,553 315,392 305,838 290,318 277,152 Average sales price (move out) 485,707 4
Slide 38: A.8 Fair value breakdown
A.8 Fair value breakdown Appendix Investment properties breakdown Indicative example (per house) Cash flow P&L 1,000 Sale price (incl. GST) 592,900 227.9 800 Sale price (excl. GST) 539,000 539,000 229.3 600 204.3 138.0 Land (104,000) 172.7 400 123.4 143.1 82.7 Cost of sales 114.1 39.7 58.2 104.1 530
Slide 39: A.9 Investment properties
A.9 Investment properties Appendix The table below shows the movement in the investment property balance split between: • Land purchases • Value created through operations • Valuation movement due to changes in valuation assumptions FY23 FY22 FY21 FY20 FY19 Opening balance at 1 July 850.2 636.5 493.
Slide 40: A.10 Cash flow analysis FY23
A.10 Cash flow analysis FY23 Appendix Pakenham Completed Clyde Phillip East Communities Communities 3 Wollert Deanside St Leonards Meridian Bellarine Woodlea Riverfield Island (Ridgelea) Merrifield in planning 4 Total Community operations cash flows Site rentals 29.6 1.5 1.2 1.8 0.1 0.0 34.2 Deferre
Slide 41: A.11 Cash flow analysis FY22
A.11 Cash flow analysis FY22 Appendix Completed Mount Communities Communities 3 Duneed Kaduna Park Wollert Deanside St Leonards Meridian Woodlea in planning 4 Total Community operations cash flows Site rentals 25.0 1.5 1.6 0.7 0.6 0.3 29.7 Deferred Management Fees 1 10.8 0.0 0.1 10.9 Community opera
Slide 42: Important notice and disclaimer
Important notice and disclaimer This Presentation contains general background information about Lifestyle Communities Limited (LIC) and its activities current at 16 August 2023 unless otherwise stated. It is information in a summary form and does not purport to be complete. It should be read in conj