Peet Limited · ASX:PPC
Peet — UBS Emerging Company Conference 2010
31 slides from Peet's conference presentation, Oct 20, 2010
Slide 1: UBS Emerging Company Conference
UBS EMERGING COMPANY CONFERENCE OCTOBER 2010
Slide 2: Key messages
Key messages » Strong earnings growth achieved over FY10 » Improved EBIT margins across both funds management and development divisions » Solid balance sheet – reduced gearing to lower end of target range » Disciplined assessment of growth opportunities » 2H10 dividend of 4.5¢ per share fully franke
Slide 3: Operational highlights
Operational highlights » Business performance » 2,567 2 567 lots sold – up 7% » Contracts on hand increased by 21% to 1,270 – contracts value up 49% to $292.3m » Successful land syndicate capital raising of $22m completed in November 2009 » Performance driven by » Solid underlying drivers in the res
Slide 4: Group key financial highlights
Group key financial highlights $m FY10 FY09 Var (%) » Group revenue of $178.0m Revenue 178.0 176.8 1% » Lot sales of 2,567 ‐ up 7% EBITDA1 74.8 8 57.2 2 31% » Settlements of 2,366 ‐ up 4% Net EBITDA margin 42% 32% 10% » Operating EBITDA of $74.8m – an increase of Operating NPAT 42.1 31.2 35% 31% com
Slide 5: Group operating performance
Group operating performance Key operating statistics FY10 EBITDA composition by business type 3% FY10 FY09 Var (%) Funds 8% Management Lot sales 2,567 2,409 7% Development 35% Lot settlements 2,366 2,282 4% (Owned) JV's No. of contracts on hand 1 270 1,270 1 048 1,048 21% 54% Oh Other as at 30 June
Slide 6: Funds management
Funds management » Funds management platform continues to perform strongly » 28 syndicate projects under management GDV of $3.5bn » Long project / syndicate duration » Alkimos contributing to profits from FY11 ‐ $1.1bn project GDV » High return on equity to Peet » $ $22m raised for Peet Point Cook K
Slide 7: Average sales prices
Average sales prices Average prices of lots sold » Average price per lot reflective e ect e ofo Peet’s eet s 100 positioning at affordable end 11% 11% 90 of market 80 20% 22% » pp Approximately y 90% of sales 70 occur at prices less than 60 >$250k $250k 50 $201 ‐ $250k 40 69% 67% < $200k <=$200k 30
Slide 8: Settlements and contracts on hand
Settlements and contracts on hand » Growth in value and number of settlements over FY10 » Significant increase in number and value of contracts on hand » 49% iincrease in i value l off contracts t t on h hand d » 55% of value of contracts on hand in company owned projects » Value of contracts on han
Slide 9: Pipeline and land bank opportunities
Pipeline and land bank opportunities
Slide 10: Pipeline mix
Pipeline mix » In excess of 34,200 lots under management with end value of $7.5 billion1 » 14 years supply based on current production rates » Pipeline weighted towards strongest markets (Vic and WA) » Focus remains on the affordable market segment » Strong diversification with 69 Company‐owned, syn
Slide 11: Embedded value within existing land bank
Embedded value within existing land bank » Leveraging community infrastructure and amenity to improve underlying residential land values » Greater market appeal » Employment driver » Competitive advantage Land Uses Number of Current Indicative Yields Opportunities 6 Retaill / Commerciall Mixed d Use
Slide 12: Lakelands town centre
Lakelands town centre » District town centre: » 4,000 sqm supermarket » 6,600 sqm discount department store » 4,500 sqm of specialty shops » 4,900 sqm of commercial & ancillary uses » 182 high density residential living » Planning well underway 12
Slide 13: Wellard town centre
Wellard town centre » Neighbourhood shopping centre » Masterplan approved » 2,500 sqm supermarket » 23 specialty shops comprising 3,220 sqm q » 426 high density residential living » 207 retirement village units » Planning well underway 13
Slide 14: Shorehaven coastal village
Shorehaven coastal village » Range of uses – retail, entertainment, leisure, community » Medium d and dhhigh hddensity d development l within and around the centre, ~300 apartments » Specialty l retaill outlets l including l d cafes f and d restaurants » Major retail site 3,200 sqm » 2,000 sqm of sp
Slide 15: New syndicate launch
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Slide 16: New syndicate launched
New syndicate launched Peet Yanchep Land Syndicate » New syndicate launched in September 2010 ─ total t t l equity it raising i i off $55 million » Forecast gross revenue of c. $0.5bn » First settlements approximately March 2012 » Development of 1 1,500‐lot 500 lot master planned community in coasta
Slide 17: New syndicate launched - location
New syndicate launched ‐ location » Yanchep is an established residential coastal suburb and growth area within the City of Wanneroo, one of Australia’s fastest growing municipalities » This locality is expected to ultimately house 155,000 residents, provide employment for up to 55,000 people, and e
Slide 18: Capital management
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Slide 19: Capital management
Capital management » Advanced discussions to extend current debt term » Head room / liquidity > $110m » DRP for f 2H10 d dividend d d – 4.5 cents per share h fully f ll franked f k d » Since year‐end: net debt reduced to $169m with gearing down to 27% 30‐Jun‐10 30 Jun 09 Weighted average debt maturi
Slide 20: Cash flow analysis
Cash flow analysis » Strong operating cash flow FY10 cash flow analysis result » Strong cash St h flow fl position iti influenced by a continued focus on (86.1) » Working k capitall – tighter inventory (22.3) 178.2 management resulting in release of (5 0) (5.0) capital (32.2) 64.8 » Increase in aver
Slide 21: Market overview
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Slide 22: Geographic positioning - residential
Geographic positioning ‐ residential Strong market position especially in metropolitan growth corridors in Victoria and WA Victoria Western Australia Pipeline by geography (lots)1 » Continues to perform well » Sentiment expected to with strong sales momentum improve following resolution » New land r
Slide 23: Demand side factor: Population growth
Demand side factor: Population growth National Housing Supply Council ‐ State of Supply Report 2010 » Demand for housing is projected to grow further over the next 20 years » The “medium medium case” case projection of underlying demand is 3.2million 3 2million additional households over the next 20
Slide 24: Residential – market outlook
Residential – market outlook Key drivers for residential remain positive – major Australian housing market balance undersupply of housing & low unemployment 400 350 » Housing undersupply due to supply constraints 300 Numbeer of dwellings ('000) and population growth 250 Underlying demand 200 » Const
Slide 25: Australian economic fundamentals
Australian economic fundamentals Housing fundamentals driven by national housing undersupply » Whilst affordability has reduced with increased interest rates and price growth, current affordability levels remain reasonable bl relative l to prior peaks k » Average monthly repayments have grown in lin
Slide 26: FHB still active, upgrader and investor activity improving
FHB still active, upgrader and investor activity improving First Home Buyer (FHB) » FHB market segment has trended back to longer term average of 20% ‐ 25% of total market » Victoria remains strong with state grant increased to $20k until June 2011 Upgraders » Volumes increasing ‐ backfilling FHB de
Slide 27: Peet strategy and outlook
Peet strategy and outlook mo rs . i >» } a —
Slide 28: Strategy
Strategy Peet will continue to responsibly identify and explore growth opportunities in line with strategic objectives, building on a quality asset base » Peet’s strategic priorities remain » Continuing expansion of syndication platform nationally » Improve market share in existing and new growth co
Slide 29: Outlook
Outlook Subject to the continuation of current market conditions, Peet remains optimistic on the outlook given its pipeline mix, level of pre‐sales and underlying earnings provided through its funds management platform » Pipeline mix » Pipeline weighted towards strongest markets (Vic and WA) » Focus
Slide 30: Thank you
Slide 31: 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,