Peet Limited · ASX:PPC
Peet — H1 2022 Earnings Presentation
33 slides from Peet's earnings presentation, Feb 24, 2022
Slide 1: Half Year Results FY22
Slide 2: Residential sales momentum underpins future earnings
RESIDENTIAL SALES MOMENTUM UNDERPINS FUTURE EARNINGS 1H22 Results Summary Operating1 and Statutory Profit $20.6 After Tax 103% million 1,809 $817m LOTS3 SOLD CONTRACTS OPERATING EARNINGS 19% 1,251 VALUE ON HAND OF 4.3 CENTS INCREASE ON LOTS3 SETTLED 49% INCREASE ON PER SHARE 1H21 30 JUNE 2021 103% D
Slide 3: Strong platform for growth
STRONG PLATFORM FOR GROWTH Land bank of 42,630 • Strong culture, brand and customer focus lots1 • Leading Australian developer of residential communities with a proven track record for Land bank of over 125 years $14.3bn gross • Large, nationally diverse land bank provides development economies of s
Slide 4: Delivering against our strategy
DELIVERING AGAINST OUR STRATEGY Portfolio well positioned for positive growth and value creation STRATEGY KEY 1H22 ACHIEVEMENTS • Full ownership of Flagstone City and University of Canberra projects on long dated terms Invest in high quality land in strategic INVEST locations across country • Sale o
Slide 5: Group priorities and strategic focus
GROUP PRIORITIES AND STRATEGIC FOCUS Strategic focus on optimising land bank for future growth and value creation Key trends underpinning our strategy Continue to leverage large scale national portfolio to further improve returns • Accelerate production to meet current demand and increase operating
Slide 6: Results overview
RESULTS OVERVIEW
Slide 7: Group 1H22 financial results
GROUP 1H22 FINANCIAL RESULTS Improving results with market recovery KEY PERFORMANCE STATISTICS 1H22 1H21 VAR (%) Lot sales1 1,809 1,522 19% • Group sales volumes were up due to solid market conditions 1 Lot settlements 1,251 1,254 - Revenue2 $127.2m $100.6m 26% • Increased earnings was due to solid
Slide 8: Group balance sheet
GROUP BALANCE SHEET CAPITAL MANAGEMENT METRICS 1H22 FY21 Cash at bank1 $38.0m $64.1m • Cash and debt facility headroom of $143.3m provides capacity to 2 Bank debt $73.9m $70.3m fund current portfolio Peet bonds3 $200.0m $200.0m • Gearing4 increased to 27.5% - within target range Gearing4 27.5% 24.8%
Slide 9: Group cash flow summary
GROUP CASH FLOW SUMMARY FY19 FY18 1H22 1H21 CASH FLOWS RELATED TO OPERATING ACTIVITIES $M $M • Receipts higher due to increased settlement revenue from existing and new Receipts from customers 112.1 98.6 projects and funds management fee income Payments for development and infrastructure (56.6) (49.
Slide 10: Operating performance
OPERATING PERFORMANCE
Slide 11: Group operating performance
GROUP OPERATING PERFORMANCE IMPROVED RESULTS ACROSS NATIONAL PORTFOLIO • Group EBITDA1 up 56% on solid price growth, FM fee income and equity accounted profits 21% 23% • Contribution from eastern states’ projects represented 91% of EBITDA1,2 during 1H22 EBITDA1,2 12% 9% COMPOSITION BY - VIC and QLD
Slide 12: Group sales and settlement activity
GROUP SALES AND SETTLEMENT ACTIVITY MARKET IMPROVEMENT DRIVING SALES PERFORMANCE • Group sales for 1H22 of 1,809 lots1 – up 19% - WA and QLD sales volumes increased on the back 19% of improving market conditions 28% SALES 7% - Vic and ACT/NSW sales activity remained resilient COMPOSITION BY despite
Slide 13: Enquiry levels remain strong
ENQUIRY LEVELS REMAIN STRONG 14000 12000 • Substantial uplift in VIC and SA due 11,716 to launch of new projects and new stage releases 10000 • WA enquiry lower due to capacity 8,896 Registrations Of Interest constraints impacting land supply 8000 7,838 and builder time frames 6,956 6,579 - Expect W
Slide 14: Contracts on hand
CONTRACTS ON HAND CONTRACTS ON HAND1 (LOTS) INCREASE IN CONTRACTS ON HAND 2,594 REFLECTS STRONG MARKET CONDITIONS 2,506 1,948 Contracts on hand1 increased by 29% since 30 June 2021 to 1,786 2,506 lots 1,257 • Reflects strong market conditions across all of the Group’s markets Contracts value of $817
Slide 15: Outlook
OUTLOOK
Slide 16: Market conditions: by state
MARKET CONDITIONS: BY STATE PEET’S SUMMARY WA QLD VIC SA ACT/NSW Strong 1H22 sales performance driven Strong 1H22 settlement volumes Strong sales performance Solid sales volumes on back of Large sales volumes experienced by strength of local economy and and net pricing improvement supported by key s
Slide 17: New projects provide medium term earnings visibility
NEW PROJECTS PROVIDE MEDIUM TERM EARNINGS VISIBILITY Pipeline of approximately 43,000 lots providing visibility of future earnings FY22 – FY24 NEW PROJECT RELEASE SCHEDULE • Up to six new land community PROJECT STATE SEGMENT PROJECT LOTS2/ GDV PROJECT LIFE projects and seven START1 UNITS (YEARS) tow
Slide 18: Flagstone City - QLD
FLAGSTONE CITY - QLD • A ~11,000 lots1 master planned community with a GDV of approximately $4 billion • Located 38km south-west of Brisbane’s CBD and 27km from Springfield in one of the fastest growing corridors in SEQ • The project includes the only town centre in the 7,000ha Greater Flagstone Pri
Slide 19: Flagstone City - QLD
FLAGSTONE CITY - QLD • Unique opportunity to increase exposure to an actively trading and significantly de-risked project currently generating strong sales and earnings - FY22 sales expected to be circa 300 lots, assuming current market conditions remain - Strong price growth achieved in the 12 mont
Slide 20: University Canberra - ACT
UNIVERSITY CANBERRA - ACT • During 1H22, Peet acquired approximately 15ha of land from the University of Canberra in Belconnen, ACT for circa $67 million - The transaction is a restructure of the conditional agreement between the parties for the joint development of that land, announced in April 201
Slide 21: University Canberra - ACT
UNIVERSITY CANBERRA - ACT • The development will be a benchmark for contemporary living that demonstrates innovative planning and design in architecture, landscape and streetscape • The project design will be modern, progressive and sustainable, delivering a diverse mix of townhouses and apartments
Slide 22: Group outlook
GROUP OUTLOOK • Residential markets are expected to remain positive over the medium term supported by improving employment outlook, population growth and current accommodating credit conditions Focused on positioning the Group for growth • Continuing residential sales momentum, a significant develop
Slide 23: Appendices
APPENDICES FY19 RESULTS | AUGUST 2019 23
Slide 24: Broad customer and product reach
BROAD CUSTOMER AND PRODUCT REACH SCALE PIPELINE WITH LOW COST BASE Peet manages a broad property 42,630 portfolio, encompassing 42,630 LOTS lots across 51 projects Diversified land bank $14.3bn strategically located in growth END VALUE corridors of major cities in every mainland state of Australia W
Slide 25: FM operating performance
FM OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H22 1H21 VAR (%) Lot sales1 1,042 710 47% • FM sales were up due to solid market conditions Lot settlements1 767 769 - Revenue $22.8m $16.6m 37% Share of net profit of equity accounted investments $7.4m $2.5m 196% • Revenue higher due to higher sa
Slide 26: JV operating performance
JV OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H22 1H21 VAR (%) Lot sales1 450 477 (6%) Lot settlements1 245 312 (21%) Revenue $19.6m $20.3m (4%) • Reflects steady sales and settlements volumes Share of net profit of equity accounted investments $3.4m $2.8m 21% • Equity accounted profits impac
Slide 27: Development operating performance
DEVELOPMENT OPERATING PERFORMANCE KEY PERFORMANCE STATISTICS 1H22 1H21 VAR (%) Lot sales1 317 335 (5%) Lot settlements1 239 173 38% Land only 176 155 14% Medium Density product 63 18 250% Revenue $73.0m $56.5m 29% • Higher revenue and EBITDA due to increased settlements at EBITDA $8.9m $6.7m 33% Pal
Slide 28: Summary income statement
SUMMARY INCOME STATEMENT 1H22 1H21 Var $M $M (%) Funds Management 22.8 16.6 37% Development 73.0 56.5 29% Joint Venture 19.5 20.3 (4%) Share of net profit of equity accounted investments 10.8 5.3 104% Other1 1.1 1.9 (42%) Revenue 127.2 100.6 26% EBITDA 32.6 20.9 56% Finance costs2 (4.3) (5.8) 26% De
Slide 29: Summary balance sheet
SUMMARY BALANCE SHEET 1H22 FY21 $M $M Assets Cash and cash equivalents 38.0 64.1 Receivables 100.9 94.0 Inventories 501.1 489.9 Investments accounted for using the equity method 241.2 232.6 Other 8.5 9.1 Total assets 889.7 889.7 Liabilities Payables 25.2 34.5 Borrowings 271.8 268.0 Other 51.3 54.7 T
Slide 30: Land bank funds management key projects
LAND BANK FUNDS MANAGEMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2022 2023 2024 2025 2026 Selling Alkimos WA $1,079m 2,136 Brabham WA $655m 3,006 Burns Beach WA $178m 281 Eglinton WA $224m 943 Golden Bay WA $116m 463 Lakelands WA $150m 824 Yanchep Golf Estate WA $392
Slide 31: Land bank development key projects
LAND BANK DEVELOPMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2022 2023 2024 2025 2026 Brigadoon WA $3m 1 Greenlea WA $3m 9 Mundijong WA $187m 781 Glyde Street WA $47m 51 Glendalough WA $75m 100 Other WA $771m 3,966 Gladstone QLD $85m 324 Flagstone North3 QLD $80m 1,86
Slide 32: Land bank joint venture key projects
LAND BANK JOINT VENTURE KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2022 2023 2024 2025 2026 Wellard WA $58m 253 Other WA $95m 175 Edens Crossing QLD $146m 553 Googong3 NSW $747m 1,423 Total Joint Venture $1,046m 2,404 TOTAL PIPELINE $14,262m 42,630 LEGEND Planning Selling
Slide 33: 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. This presentation contains forward-looking statements, including sta