Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2024 Earnings Presentation
43 slides from Lifestyle Communities's earnings presentation, Aug 13, 2024
Slide 1: Results Presentation for the year ended 30 June 2024
Results Presentation for the year ended 30 June 2024 For personal use only
Slide 2: Contents
Contents Appendix Our story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i A.1 Model of living. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 A business for purpose. . . . . . . . . . . . . . . . . . . .
Slide 3: Our story
Our story We’re champions for facilitating a bigger life for our We build communities because our homeowners have worked hard for what they have, and they deserve beautifully designed homeowners. A cohort of like-minded working, semi-retired and low maintenance homes in concert with best-in-class an
Slide 4: A business for purpose
ii A business for purpose An empowering and engaging homeowner For personal use only experience offering that reimagines traditional retirement. An affordable housing option for Australians aged over 50. A sustainable High quality resort-style financial model facilities that exceed where homeowners
Slide 5: Overview
Overview For personal use only 1 SECTION 1 Overview Your holiday awaits at Lifestyle Bellarine and Club Lifestyle Lifestyle Communities® Life. Unlimited.
Slide 6: Key focus areas and initiatives
Overview 2 Key focus areas and initiatives For personal use only Market • Difficult trading conditions, particularly in Victoria • Conditions expected to remain challenging for some time • Customer sentiment “now is not the right time” • Medium term macro thematics remain supportive — Ageing populat
Slide 7: FY24 summary
Overview 3 FY24 summary Growing annuity income streams For personal use only • Low consumer confidence, inflation, and interest rate rises resulted $60 in deteriorating conditions in the Victorian property market progressively throughout FY24 • Operating Profit decreased 25.7% from $71.1m to $52.9m
Slide 8: FY24 results snapshot
Overview 4 FY24 results snapshot Key metrics 1 Operating earnings per share 2 Measure FY24 FY23 FY22 FY21 FY20 80 New home settlements Homes 311 356 401 255 253 For personal use only Established home resales Homes 151 178 156 121 102 68.1 58.7 Total settled homes (end of year) Homes 3,860 3,549 3,19
Slide 9: Portfolio snapshot FY24
Overview 5 Portfolio snapshot FY24 Homes occupied or sold and awaiting settlement Total homes Homes sold Homes sold and Communities in communities and occupied awaiting settlement No. % For personal use only Established Communities 15 fully completed Communities 2,864 2,864 2,864 100% Communities —
Slide 10: Operations update
Operations update For personal use only 6 SECTION 2 Operations Fireplace at Lifestyle Woodlea update Lifestyle Communities® Life. Unlimited.
Slide 11: Portfolio overview and land acquisition strategy
Operations update 7 Portfolio overview and land Yarrawonga acquisition strategy Focus remains on Melbourne and Shepparton Geelong’s growth corridors: • Cluster approach – each growth corridor can sustain multiple 33 Communities in planning, communities • Capitalise on brand development or under mana
Slide 12: Operating model
Operations update 8 Operating model Example Project — cumulative cash flows Our Operating Model is Unique in the Land 20,000 Lease Industry: For personal use only Development Rent DMF 10,000 • Customer centric approach built solely through organic growth over 21 years 0 • Only pure-play greenfield d
Slide 13: How we create value
Operations update 9 How we create value We recognise that the way we create and operate our communities has wider impacts on the well-being of our homeowners. This understanding underpins our approach Our economic value creation in FY24 to sustainability. Suppliers Team members Shareholders Governme
Slide 14: Measuring our social impact
Operations update 10 Measuring our social impact We are only in the early stages of measuring the impact we can have on our homeowners well-being but we are committed to evolving Our approach to sustainability prioritises positive our approach to PWI further. social outcomes for our homeowners. For
Slide 15: Hear from our Homeowners
Operations update 11 Hear from our Homeowners We don’t sell homes, we change people’s lives. “ We want to enjoy ourselves, we want to socialise, we want to go out, we want to travel. Yeah, and while we’re doing that, we want to feel safe and comfortable.” “ I see it as us being proactive in making s
Slide 16: Lifestyle Communities Foundation
Operations update 12 Lifestyle Communities® Foundation Commencing our 10th year of giving. • In 2014, we faced the significant loss of co-founder Dael Perlov, who For personal use only passed away from pancreatic cancer at 46 • His passing inspired us to honour his memory and continue his legacy wit
Slide 17: Sales and settlements
Operations update 13 Sales and settlements No. of FY24 • 375 New Home Sales and 311 new home Community homes Sold % Sold Settled % Settled settlements For personal use only settlements Wollert 246 229 93% 209 85% 44 • Sales higher than Settlements in FY23 and FY24 Deanside 266 188 71% 166 62% 32 as
Slide 18: Sales rates
Operations update 14 Sales rates Sales profile from date of first sale • Three distinct categories of projects in Market: 250 Meridian 1. Northern Growth Corridor: Wollert, (Sep-21) For personal use only Deanside, Woodlea performing in line with 225 historical averages Wollert (Mar-19) 200 2. South
Slide 19: Established home resales
Operations update 15 Established home resales Homeowners can pay less upfront, and fund their DMF through property price growth over time. 2 FY24 FY23 FY22 FY21 FY20 For personal use only No. of resales settlements 1 No. of settlements 151 178 156 121 102 Average tenure (years) Years 7.1 6.6 6.1 6.0
Slide 20: Club Lifestyle
Operations update 16 Club Lifestyle 1,500 For personal use only Escape on us Homeowner stays in FY24 Lifestyle Bellarine Private Beach Club Lifestyle is the ultimate retreat for homeowners seeking an escape in the luxury of beautiful villas and captivating surroundings on the Bellarine Peninsula. As
Slide 21: Club Lifestyle testimonials
Operations update 17 “ The entire weekend stood out as a collection of memorable moments, and we were reluctant to leave. We wholeheartedly recommend Club Lifestyle to other homeowners. Thank you to everyone at Club Lifestyle for this For personal use only enchanting experience. Until the next adven
Slide 22: Financial results
Financial results 18 Progress at Lifestyle Phillip Island June 2024 For personal use only SECTION 3 Financial results Lifestyle Communities® Life. Unlimited.
Slide 23: Growing annuity income stream
Financial results 19 Growing annuity income stream There are two components to the Home sites under management 2 For personal use only annuity income stream: 4,500 Site rental fee 3,860 4,000 • $220 per single and $254 per couple, per 3,549 week, per home 3,500 3,193 • Indexed at greater of CPI or 3
Slide 24: Income statement
Financial results 20 Income statement $000s FY24 FY23 FY22 Community operations Site rental 41,436 34,244 29,712 Community operating costs (18,383) (15,219) (12,694) • Low consumer confidence, inflation, and interest rate rises made Community operating margin 23,053 19,025 17,018 for increasingly di
Slide 25: Fair value adjustments
Financial results 21 Fair value adjustments Pre-tax • The fair value adjustment typically comprises three Reconciliation of operating Fair Value Adjustment to components: For personal use only statutory Fair Value Adjustment (pre-tax) FY24 FY23 FY22 1. The value uplift created when a customer settle
Slide 26: Balance sheet
Financial results 22 Balance sheet • Inventory balances have increased due to a higher number of Balance sheet highlights developments in progress. A detailed breakdown of inventory For personal use only $000s FY24 FY23 FY22 by project is included on the next page Cash and cash deposit 4,095 1,233 1
Slide 27: Inventory balances by project
Financial results 23 Inventory balances by Project Civils+ No. homes • At each development, we sell a mix of: For personal use only Inventory capitalised Housing Total completed No. completed – build-to-order homes Community phase interest ($m) $m $m not sold display homes – Ready-to-move-in homes W
Slide 28: Cash flow
Financial results 24 Cash flow FY24 FY23 FY22 Community operations cash flows: Community operations cash flows • 12.2% increase compared to the prior year due to more homes Site rentals 41.3 34.2 29.7 For personal use only under management Deferred Management Fees 13.2 12.9 10.9 Community operating
Slide 29: Development cash flows split by project
Financial results 25 Development cash flows split by project Cash Projects recovery Cash draw not yet 1HFY24 2HFY24 FY24 • Yarrawonga and Ocean Grove II commenced construction For personal use only Community projects projects started cash flow cash flow total in the second half of FY24 Wollert ● 10.
Slide 30: Debt covenants and key metrics
Financial results 26 Debt covenants and key metrics Lifestyle has three main debt and lending covenants which are regularly stress tested. They are: Secured • In November 2023 the Company increased its debt facility to $700 million. property % LVR<65% ICR>2.5x For personal use only • The syndicate i
Slide 31: Outlook
Outlook For personal use only 27 SECTION 4 Outlook Views over the bay at Lifestyle Bellarine Lifestyle Communities® Life. Unlimited.
Slide 32: Outlook
Outlook 28 Outlook • Headwinds currently facing the business including the impact of Settlement Profile of Communities in Development recent media coverage and the continued softness in the residential property market FY24 FY25 For personal use only • We will remain disciplined in our approach, and
Slide 33: Appendix
Appendix For personal use only 29 Appendix Lifestyle Communities® Life. Unlimited.
Slide 34: A.1 Model of living
Appendix 30 A.1 Model of living How does the Lifestyle Communities® model of living work? Homeowners at Lifestyle Communities® own their own home and lease the land upon which their homes are located, via a weekly site fee and a deferred management fee. For personal use only 75-80% On average, homes
Slide 35: A.2 Growing recurring revenue stream
Appendix 31 A.2 Growing recurring revenue stream Lifestyle Communities® business has two core elements For personal use only 1. Creating communities 2. Managing communities A mix of equity and debt capital is used to develop greenfield Completed communities generate recurring revenue streams which a
Slide 36: A.3 Dividend policy
Appendix 32 A.3 Dividend policy Dividend growth over time As a general principle, Lifestyle Communities® intends For personal use only to pay dividends out of post-tax operating cashflow 14 generated from community management including: • Operating cash flow generated from community 12 11.5 manageme
Slide 37: A.4 Investment property valuation inputs
Appendix 33 A.4 Investment property valuation inputs Cap rate (%) DMF values per home ($) Net rental per home ($) Valuation ($m) Last independent Land cost Valuation summary valuation date FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 ($m) Brookfield Jun-24 5.00% 5.25% 65,570 50,877 7,353 8,347 48.5 47.8
Slide 38: A.5 Investment property valuations
Appendix 34 A.5 Investment property valuations Investment properties At fair value Total homes Homes occupied at cost ($m) ($m) Mature Communities Brookfield at Melton 228 228 6.76 48.48 Seasons at Tarneit 136 136 3.68 24.48 Warragul 182 182 2.53 36.15 For personal use only Casey Fields at Cranbourn
Slide 39: A.6 Fair value breakdown
Appendix 35 A.6 Fair value breakdown Investment properties breakdown Indicative example (per house) Cash flow P&L 1,200 Sale price (incl. GST) 592,900 For personal use only 1,000 326.0 Sale price (excl. GST) 539,000 539,000 227.9 800 229.3 245.9 Land (104,000) 600 204.3 138.0 172.7 400 123.4 143.1 C
Slide 40: A.7 Investment properties
Appendix 36 A.7 Investment properties The table below shows the movement in the investment property balance split between: • Land purchases For personal use only • Value created through operations • Valuation movement due to changes in valuation assumptions FY24 FY23 FY22 FY21 FY20 Opening balance a
Slide 41: A.8 Cash flow analysis FY24
Appendix 37 A.8 Cash flow analysis FY24 Completed Clyde Phillip Ocean Communities Communities 3 Wollert Deanside St Leonards Ridgelea Meridian Riverfield Woodlea Island Bellarine Merrifield Grove II Yarrawonga in planning 4 Total Community operations cash flows Site rentals 31.9 2.2 1.8 2.4 - 2.3 -
Slide 42: A.9 Cash flow analysis FY23
Appendix 38 A.9 Cash flow analysis FY23 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 For p
Slide 43: Important notice and disclaimer
39 Important notice and disclaimer For personal use only This Presentation contains general background information about Lifestyle Communities® Limited (LIC) and its activities current at 13 August 2024 unless otherwise stated. It is information in a summary form and does not purport to be complete.