Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — Investor Presentation (November 2012)
42 slides from Lifestyle Communities's investor presentation, Nov 20, 2012
Slide 1: Investor Presentation: Transformational Capital Raising
For personal use only ASX Code: LIC Investor Presentation Transformational Capital Raising: Placement and 1:1 Non-renounceable Rights Issue DATE 20 November 2012
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER • This Presentation contains general background information about Lifestyle Communities Limited (LIC) and its activities current at 20 November 2012 unless otherwise stated. It is information in a summary form and does not purport to be complete. It should be read in
Slide 3: Lifestyle Warragul Clubhouse at Dusk
LIFESTYLE WARRAGUL CLUBHOUSE AT DUSK For personal use only Lifestyle Communities Limited Downsize to a Bigger Life 3
Slide 4: Contents
CONTENTS For personal use only Important notice and disclaimer Executive Summary Annexures 1. The Lifestyle Communities Business A. Trading Update 2. The Offer B. Supplementary Cash Flow Analysis 3. Impact on Lifestyle Communities C. Market Size D. Risk Factors E. Key Management Personnel Lifestyle
Slide 5: Executive Summary
EXECUTIVE SUMMARY Lifestyle Communities is undertaking a transformational equity raising that For personal use only will change the investment proposition Proposed Offer Benefits for Shareholders Structure: Placement and 1 for 1 Opportunistic Growth Entitlement Offer • Expanded development pool will
Slide 6: The Lifestyle Communities Business
For personal use only Section 1 THE LIFESTYLE COMMUNITIES BUSINESS Lifestyle Communities Limited Downsize to a Bigger Life 6
Slide 7: Lifestyle Communities
1.1 LIFESTYLE COMMUNITIES Lifestyle Communities is one of Australia’s leading developers of For personal use only affordable residential housing communities Total Lots in Communities Mature communities Brookfield (Melton) 228 Tarneit 136 Currently in development Warragul 182 Cranbourne (1) 217 Shepp
Slide 8: Continued Performance
1.2 CONTINUED PERFORMANCE Lifestyle Communities has demonstrated a consistent history of sales For personal use only and settlements 600 –– Sales 500 –– Settlements Number of homes/Annuities 400 –– Total Annuities (1) Under Management 300 –– LIC Economic Interest in Annuities (1) 200 –– 100 –– 0 ––
Slide 9: Business Model
1.3 BUSINESS MODEL Lifestyle Communities has a sustainable business model that produces For personal use only long term CPI indexed annuity streams Development Business Community Management Business Total annuities at year end Circulating Settled homes are transferred to the Capital Community Pool M
Slide 10: Business Model (cont.)
1.3 BUSINESS MODEL (CONT.) The land lease business model differentiates Lifestyle Communities from For personal use only traditional property and retirement developers Features Benefits ifestyle Communities is the developer, L L ifestyle Communities controls all interactions with its sales agent and
Slide 11: Annuity Streams
1.4 ANNUITY STREAMS Each homeowner executes a 90-year site agreement with Lifestyle For personal use only Communities that defines the terms of the ongoing annuities(1) There are 2 components to the annuity stream: 1. Site Rental Fee 2. Deferred Management Fee (2) This fee is collected on the re-sal
Slide 12: Annuity Streams (cont.)
1.4 ANNUITY STREAMS (CONT.) The level of annuity income increases as each home is settled For personal use only Annuity Income $5,000,000 –– $4,500,000 –– $4,000,000 –– $3,500,000 –– $3,000,000 –– $2,500,000 –– $2,000,000 –– $1,500,000 –– $1,000,000 –– $500,000 –– FY2008 FY2009 FY2010 FY2011 FY2012
Slide 13: An Affordable Solution
1.5 AN AFFORDABLE SOLUTION The Lifestyle Communities model creates a sustainable financial solution For personal use only for homeowners Lower Entry Price Sustainable Cost of Living Lower Barrier to Exit New home prices are typically set The ongoing site rental obligation The Deferred Management Fee
Slide 14: Managing the Development Process
1.6 MANAGING THE DEVELOPMENT PROCESS During the 4-6 year development cycle of a typical community, Lifestyle For personal use only Communities aims to recover cash development costs (including land) from home sales Lifestyle Communities Approach Benefits • N eed to ensure completed home price will s
Slide 15: Typical Development Profile
1.7 TYPICAL DEVELOPMENT PROFILE The committed development capital is recovered as home sales For personal use only are settled. This capital can then be re-cycled into a new development Example Unlevered Greenfield Development Cash Flow Profile Capital recovery period 1 2 3 4 5 6 7 8 9 10 11 12 13 1
Slide 16: Key Commercial Risks
1.8 KEY COMMERCIAL RISKS A fall in general consumer confidence has the potential to slow the For personal use only sales rate of homes ow Does Lifestyle Communities Mitigate H Risk How Could The Risk Manifest? This Risk? • Lifestyle Communities will maintain a minimum liquidity buffer(1) to cushion
Slide 17: Key General Risks
1.9 KEY GENERAL RISKS Lifestyle Communities pro-actively seeks to reduce its exposure to For personal use only regulatory changes Risks How Could The Risk Manifest? ow Does Lifestyle Communities H Mitigate This Risk • L ifestyle Communities has been • C hanges to various pieces of pro-actively invol
Slide 18: The Offer
For personal use only Section 2 THE OFFER Lifestyle Communities Limited Downsize to a Bigger Life 18
Slide 19: Offer Overview
2.1 OFFER OVERVIEW Summary of Proposed Offer Sources $million For personal use only Placement and 1:1 Entitlement Offer for Eligible Offer Structure: 521m shares at 7.0c 36.5 Shareholders Issue Price: 7.0c per share Uses Total: $36.5m Loan Note Reduction 16.8 Offer Size: Placement : (1) $3.0m Entitl
Slide 20: Timetable
2.2 TIMETABLE Event Date For personal use only Offer Announced Tuesday 20 November 2012 Record Date for Offer Eligibility Wednesday 28 November 2012 Despatch of Entitlement Offer Booklet Friday 30 November 2012 Entitlement Offer Opens Friday 30 November 2012 Entitlement Offer Closes Friday 14 Decemb
Slide 21: Impact on Lifestyle Communities
For personal use only Section 3 IMPACT ON LIFESTYLE COMMUNITIES Lifestyle Communities Limited Downsize to a Bigger Life 21
Slide 22: Impact on Lifestyle Communities
3.1 IMPACT ON LIFESTYLE COMMUNITIES The equity raising will change the investment profile of Lifestyle For personal use only Communities Enhanced Surplus development funding enables Lifestyle Communities to be more Growth Profile opportunistic with its site acquisition strategy Balance Sheet Approxi
Slide 23: Opportunistic Growth
3.2 OPPORTUNISTIC GROWTH The additional equity funding in the development business will enable a For personal use only sustainable growth profile • T he current downturn in residential construction and land development is expected to give rise to attractive opportunities for Lifestyle Communities in
Slide 24: Balance Sheet Strengthening
3.3 BALANCE SHEET STRENGTHENING The group balance sheet will be significantly de-risked For personal use only Pro-Forma Balance Sheet 30.06.2012 Adjustments Pro-forma Post the Issue ($’000) ($’000) ($’000) Cash and equivalents 3,185 18,519 21,703 Loan Note Redemption • Up to $16.8m of the proceeds w
Slide 25: Dividend Policy
3.4 DIVIDEND POLICY Lifestyle Communities intends to pay dividends out of operating cash flow For personal use only from the Community Management Business As a general principle, the Directors of Lifestyle Communities intend to pay dividends out of post tax, operating cash flow generated from the Co
Slide 26: Governance Evolution
3.5 GOVERNANCE EVOLUTION Lifestyle Communities is moving to a governance regime with a majority For personal use only of independent, non-executive directors Existing Post Issue David Paranthoiene Chairman Transition to NED David Paranthoiene Tim Poole Independent NED Transition to Chairman Tim Pool
Slide 27: Annexures
ANNEXURES For personal use only A. Trading Update B. Supplementary Cash Flow Analysis C. Market Size D. Risk Factors E. Key Management Personnel Lifestyle Communities Limited Downsize to a Bigger Life 27
Slide 28: Trading Update
A.1 TRADING UPDATE The start of FY2013 has seen continued improvement in sales commitments For personal use only Sales Commitments Settlements • August and October 2012 were record months for sales commitments • Settlements to 31 October have exceeded budget • Demand at Chelsea Heights, Cranbourne a
Slide 29: Portfolio Status
A.2 PORTFOLIO STATUS Current Status For personal use only Sites sold Sites sold, occupied & being developed Total sites in Sites sold Communities & awaiting communities & occupied settlement # % Existing Communities – Mature Melton 228 227 1 228 100% Tarneit 136 129 5 134 99% Existing Communities –
Slide 30: Supplementary Cash Flow Analysis FY2012
B.1 SUPPLEMENTARY CASH FLOW ANALYSIS For personal use only Chelsea Supplementary Cash Flow Cranbourne Melton Tarneit Warragul Shepparton Heights Hastings Total Analysis for FY2012 (50% JV) (50% JV) Total Number of Homes 228 136 182 217 221 105 141 1,230 Settled FY2012 9 28 20 72 5 – – 134* Remaining
Slide 31: Supplementary Cash Flow Analysis FY2011
B.2 SUPPLEMENTARY CASH FLOW ANALYSIS For personal use only Cranbourne Supplementary Cash Flow Analysis for FY2011 Melton Tarneit Warragul Shepparton Total (50% JV) Total Number of Homes 228 136 182 217 221 984 Settled FY2011 22 40 37 8 - 107* Remaining homes to be settled as at 30 June 2011 11 38 93
Slide 32: Supplementary Cash Flow Analysis FY2010
B.3 SUPPLEMENTARY CASH FLOW ANALYSIS For personal use only Cranbourne Supplementary Cash Flow Analysis for FY2010 Melton Tarneit Warragul Total (50% JV) Total Number of Homes 228 136 182 217 763 Settled FY2010 28 38 37 - 103 Remaining homes to be settled as at 30 June 2010 33 78 130 217 458 Capital
Slide 33: Target Market Segmentation
C.1 TARGET MARKET SEGMENTATION Lifestyle Communities’ affordable housing product directly targets the For personal use only largest segment of the over 55’s market which has been largely under serviced by the traditional retirement housing industry Over 55’s Market Size (Number of people) It is esti
Slide 34: Key Market Drivers
C.2 KEY MARKET DRIVERS Demographic changes are driving a rapid increase in the size of the For personal use only potential market for affordable housing; between 2001-2011 Victoria’s over 55 population grew by 30%, compared to a total population increase of 15%(1) The big housing market themes are:
Slide 35: Risk Factors
D.1 RISK FACTORS There are a number of factors which may have an impact on the future performance of Lifestyle Communities Limited. This section, along with sections 1.8 and 1.9, details some of the major risks of which eligible shareholders should be aware of, but eligible shareholders should note
Slide 36: Risk Factors (cont.)
D.1 RISK FACTORS (CONT.) 2.2 Property development rIsks In the natural course of its business, Lifestyle Communities Limited participates in land and property development projects. Generally speaking, these projects have a number For personal use only of risks including (but not limited to): - the r
Slide 37: Risk Factors (cont.)
D.1 RISK FACTORS (CONT.) 2.9 Taxation Future changes in taxation law in Australia, including changes in interpretation or application of the law by the courts or taxation authorities in Australia, may impact Lifestyle For personal use only Communities Limited’s future tax liabilities, which in turn
Slide 38: Key Management Personnel
E: KEY MANAGEMENT PERSONNEL Management Team For personal use only James Kelly Bruce Carter Dael Perlov Geoff Hollis Managing Director Executive Director – Executive Director – Chief Financial Officer/ Finance Operations Company Secretary James was appointed A founding member of A founding member of
Slide 39: Contact Details
CONTACT DETAILS For personal use only For further information please contact: Lifestyle Communities Limited Canaccord Genuity Geoff Hollis Marcus Freeman Chief Financial Officer & Company Secretary Ph: (03) 8688 9111 Ph: (03) 9682 2249 Email: geoff.hollis@mylifestyle.com.au Shane Gild Ph: (03) 8688
Slide 40: For personal use only
For personal use only Lifestyle Communities Limited Downsize to a Bigger Life 40
Slide 41: Lifestyle Seasons Clubhouse
LIFESTYLE SEASONS CLUBHOUSE For personal use only Lifestyle Communities Limited Downsize to a Bigger Life 41
Slide 42: Lifestyle Communities Limited
For personal use only Lifestyle Communities Limited Level 2, 35 Market Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au S H EP PARTON - C RANB OU RNE - WARRAGUL - CHEL SEA H EIGH T S - HA S T I NG S - TA R NE I T - M E LTO N
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