Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2021 Earnings Presentation
40 slides from Lifestyle Communities's earnings presentation, August 2021
Slide 1: Results Presentation Year ended 30 June 2021
Results Presentation Year ended 30 June 2021
Slide 2: Contents
Contents Appendix Overview 1 A.1 Model of Living 27 Operations Update 10 A.2 Growing Recurring Revenue 28 Financial Results 17 A.3 Dividend Policy 29 Outlook 22 A.4 Sales and Settlements 30 LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE Summary 24 A.5 Investment Property Analysis 31 A.6 Investment Pro
Slide 3: Our story
1.1 Our story 2012 2004 Major capital raising of Development of first community at $36m to drive future growth Brookfield. First homeowner moves in June 2005 2021 Over 4,000 homeowners. Acquire land for 24th community 1 Community 2 Communities 7 Communities 12 Communities 24 Communities LIFESTYLE CO
Slide 4: A business for purpose
1.2 A business for purpose An affordable housing option for Australians aged over 50 A sustainable financial model where homeowners can prosper An empowering and engaging customer service offering that reimagines traditional retirement LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE High quality resort
Slide 5: Financial Summary
Financial Summary Net profit after tax attributable to shareholders FY21 ($ Million) 91.1 FY20 ($ Million) 42.8 1.3 Overview Total assets 781.3 596.7 FY21 Results snapshot Equity 378.1 291.4 Dividend 8.0 cents per share 5.5 cents per share Net debt 187.7 128.6 Net debt to net debt plus equity 33.2%
Slide 6: FY21 Highlights
1.4 Overview FY21 Highlights • Opened new clubhouses at Mount Duneed, Kaduna Park, Wollert, and Deanside • Launched new display homes at Wollert, Deanside and St Leonards • Welcomed first homeowners at Wollert, Deanside and St Leonards • 248 new sales and 255 new home settlements in a year affected
Slide 7: Portfolio snapshot FY21
Lifestyle Communities’ portfolio continues 1.5 Overview to grow organically through recycling capital Portfolio snapshot FY21 Homes occupied or sold and awaiting settlement Total homes in Homes sold and Homes sold and Communities communities occupied awaiting settlement No. % Existing Communities –
Slide 8: Portfolio overview and land acquisition strategy
1.6 Portfolio overview and land acquisition strategy 24 Communities in planning, development or under management Lifestyle Communities undertakes a detailed vetting of each potential site, and prioritises acquisitions based on Shepparton Focus remains on Melbourne and Geelong’s the following criteri
Slide 9: ESG materiality assessment
1.7 ESG materiality assessment Prioritising ESG Focus Across the Business There are numerous ingrained environmental and social benefits underpinning the business. Affordable Housing Homeowner Health & • Community living promotes social inclusion which Health & Wellbeing Safety reduces loneliness an
Slide 10: Greenhouse gas emissions inventory
1.8 Greenhouse gas emissions inventory Measuring our baseline LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE The table below shows operational greenhouse gas emissions • Engaged independent sustainability consultants, WSP, to for the 2019 and 2020 calendar years: conduct a greenhouse gas emissions inv
Slide 11: Net zero carbon future
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE 1.9 Net zero carbon future Lifestyle Communities commits to achieve net zero operational carbon emissions for scope 1, 2 and 3, by no later than 2035. The plan to achieve this is outlined in the chart to the right. Define CO2 footprint (complete) Why 2035
Slide 12: Operations Update
Sec ti on 2 Operations Update 10 Lifestyle Deanside
Slide 13: Sales and settlements
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE 2.1 Sales and settlements • 248 new home sales in a year heavily affected by Covid lockdowns No. of • Shepparton settled the last home Community Homes Sold % Sold • Ocean Grove settled the last home in July 2021 Ocean Grove 220 220 100% • Actively selling
Slide 14: Sales rates
A BUSINESS FOR PURPOSE 2.2 Sales rates • Sales rates held up well despite multiple Sales profile from date of first sale lockdowns 160 • Deposit holders remaining engaged. No Historical material change in cancellation rates Kaduna Park average (Sep-18) • Lockdowns slow momentum but customers 140 doi
Slide 15: Sales milestones and customer buying triggers
A BUSINESS FOR PURPOSE 2.3 Sales milestones and customer buying triggers Sales launch Typical sales profile - Major sales milestones and customer buying triggers • Major customer event St Mount • Local press marketing Meridian Leonards Deanside Wollert Duneed • Database engagement 250 Kaduna Park Sa
Slide 16: Our go-to-market strategy
A BUSINESS FOR PURPOSE 2.4 Our go-to-market strategy Segmenting our target market 5% 93% LIFESTYLE COMMUNITIES 2% Considering traditional Not actively engaging Actively looking for retirement land lease villages Already want to live in a Already want to downsize to a Not in the market to downsize la
Slide 17: Developments in progress
2.5 Developments in progress 6 Communities in development phase LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE Community complete. Clubhouse complete, over 70% sold. Clubhouse completed in May 2021. 15 homes remaining to sell. Clubhouse completed in June 2021. First homeowners settled in June 2021. Ci
Slide 18: Meridian – our smartest community yet!
2.6 Meridian – our smartest community yet! The proposed design solution • 274 Homes Ubi devices installed at each dwelling configured for rooftop solar • Civil works commenced in July 2021 • Sales launch planned for September 2021 Gate meter and grid • Reimagined Clubhouse designed by DKO with wi-fi
Slide 19: Financial Results
Sec ti on 3 Financial Results 17 Snickers the sausage dog living her best life
Slide 20: Financial results
3.1 Financial results Annuity income will continue to increase through new home settlements, rental increases and resales of existing homes A BUSINESS FOR PURPOSE There are two components to the annuity Home sites under management Homes stream: 3,000 2,792 (2) 1. Site Rental Fee 2,667 LIFESTYLE COMM
Slide 21: Income statement
A BUSINESS FOR PURPOSE 3.2 Income statement • A combination of new home settlements, a continued FY21 FY20 % compression in capitalisation rates, and movements in the Income statement ($’000) ($’000) Movement residential property market, has resulted in a $108.6m uplift in Home settlement revenue 10
Slide 22: Balance sheet
A BUSINESS FOR PURPOSE 3.3 Balance sheet • The value of inventory held has increased due to: FY21 FY20 % – the ramp-up of civil costs at Wollert, Deanside and St Balance sheet highlights ($’000) ($’000) Movement Leonards to facilitate housing construction and future Cash and cash on deposit 2,300 16
Slide 23: Cash flow
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE 3.4 Cash flow • Receipts from customers increased due to increasing FY21 FY20 annuity revenue, increased deferred management fees, Cash Flow Highlights ($’000) ($’000) and change in settlement mix Receipts from customers 149,101 138,783 • Payments to supp
Slide 24: Outlook
Section 4 Outlook 22 Lifestyle Lyndarum
Slide 25: Outlook
A BUSINESS FOR PURPOSE 4.1 Outlook • Lifestyle Communities has a focused strategy to service a niche - providing high quality affordable housing to downsizers Community FY22 FY23 FY24 • Currently funded and resourced to acquire at least two new sites Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 per year, sub
Slide 26: Summary
Section 5 Summary 24 Inside the “Allen” house design
Slide 27: Summary
A BUSINESS FOR PURPOSE 5.1 Summary • Enquiries, sales and settlements impacted by Covid-19 restrictions • Four new clubhouses opened. Three Communities welcomed first homeowners during the year • FY21 delivered 255 new home settlements and 105 resale settlements that attracted a DMF • We enter FY22
Slide 28: Appendix
Appendix 26 Twilight hour at Lifestyle Meridian
Slide 29: Model of living
A.1 Model of living How does the Lifestyle Communities’ model of living work? LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE Homeowners at Lifestyle Communities own their own home and lease the land upon which their homes are located, via a weekly site fee. Homes typically priced at 75-80% 75-80% of t
Slide 30: Growing recurring revenue stream
A.2 Growing recurring revenue stream Lifestyle Communities’ business has two core elements A BUSINESS FOR PURPOSE 1. Creating communities 2. Managing communities A mix of equity and debt capital is used to develop greenfield Completed communities generate recurring revenue streams sites to create ne
Slide 31: Dividend policy
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE A.3 Dividend policy As a general principle, 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) • A
Slide 32: Sales and settlements
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE A.4 Sales and settlements New home settlements Net sales Resale home settlements Communities FY21 FY20 FY21 FY20 FY21 FY20 Existing Communities – Sold out Brookfield at Melton 13 14 Seasons at Tarneit 8 3 Warragul 5 10 Casey Fields at Cranbourne (1) 12 10
Slide 33: Investment property analysis
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE A.5 Investment property analysis Community Valuation Summary (On completion) Rent DMF metrics (extracts from valuations) Net rental per Last independent home (3) (from DMF terminal Average sale value valuation date Rental cap. rate 1 valuation adjusted) D
Slide 34: Investment property analysis
A.6 Investment property analysis Investment properties per Community Valuation Summary financials 30 June 2021 LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE Investment properties at Total Homes Homes Occupied cost (1) ($m) At fair value ($m) Mature Communities Brookfield at Melton 228 228 6.76 43.14
Slide 35: Deferred management fees
LIFESTYLE COMMUNITIES A BUSINESS FOR PURPOSE A.7 Deferred management fees Chelsea Berwick Ocean Brookfield Seasons Warragul Casey Fields Shepparton Heights Hastings Lyndarum Officer Geelong Waters Bittern Grove Total Historical resales (1) 149 37 71 64 35 51 45 14 18 13 13 13 4 527 Average tenure (y
Slide 36: Fair value breakdown
A.8 Fair value breakdown At Lifestyle Communities, homeowners purchase a proportionate share of the clubhouse, pool, recreational facilities, and all associated infrastructure when they purchase their home. This helps Investment Properties Carrying Value at 30 June 2020 493,602 build a sense of comm
Slide 37: Cash flow analysis FY21
A.9 Cash flow analysis FY21 A BUSINESS FOR PURPOSE Supplementary Cash Flow Fully settled Meridian at Future Analysis for FY21 Communities(3) Ocean Grove Mount Duneed Kaduna Park Wollert North Deanside St Leonards Clyde North Communities(4)) Total Total Number of Homes 2,284 220 191 169 246 266 359 2
Slide 38: Cash flow analysis FY20
A.10 Cash flow analysis FY20 Future A BUSINESS FOR PURPOSE Supplementary Cash Flow Fully settled Berwick Ocean Mount Wollert Communities Analysis for FY20 Communities(3) Shepparton Geelong Waters Bittern Grove Duneed Kaduna Park North Deanside in planning(4)) Total Total Number of Homes 1,395 300 16
Slide 39: Important notice and disclaimer
Important notice and disclaimer warranty, express or implied, beliefs of LIC’s management cautioned not to place undue is made as to the fairness, as well as assumptions made reliance on forward-looking accuracy, completeness or by and information currently statements and LIC assumes correctness of
Slide 40: Lifestyle Communities Limited
Lifestyle Communities Limited Level 1, 9-17 Raglan Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au