Slide 1: Peet Limited 1H10 Results Presentation
PEET LIMITED 1H10 Results Presentation February 2010 SUCCESS THROUGH EXPERIENCE 1
Slide 2: 1H10 Performance overview
1H10 Performance overview Strong performance across the business » Operating results » Operating net profit after tax up 50% to $21 $21.7m 7m » Revenue increased by 38% to $98.4m » EPS of 7.3 cents, an increase of 55% » Group EBITDA margin increased from 35%1 to 39% » More than 1,400 lots sold – up
Slide 3: Financial and operating performance
Financial and operating performance 3
Slide 4: Group key financial highlights
Group key financial highlights » Group revenue increased by 38% to $98m $m 1H10 1H09 Var (%) » Lot sales of 1,407 ‐ up 57% Revenue 98.4 71.1 38% » Settlements up 42% to 1 1,292 292 EBITDA1 38.5 24.8 56% » Significant settlement revenue from high‐margin Company‐owned projects Operating NPAT1 21.7 14.
Slide 5: Group operating performance
Group operating performance Key performance statistics 1H10 EBITDA composition by business type1 $m 1H10 1H09 Var (%) 5%5% Development Revenue 98.4 71.1 38% (owned) Funds Operating expenses 59.9 46.3 29% Management 52% EBITDA1 38.5 24.8 56% 38% JV's Net EBITDA margin 39% 35% 11% Other Keyy operating
Slide 6: Development operating performance
Development operating performance Key performance statistics 1H10 revenue composition by geography $m 1H10 1H09 Var (%) R Revenue 67 9 67.9 48 8 48.8 39% 7% Operating expenses1 48.0 37.9 27% Vic EBITDA3 19.9 10.9 83% 33% WA Write‐down in Inventory2 0.0 5.7 (100)% 60% Qld Net EBITDA margin3 29% 22% 3
Slide 7: Composition of development pipeline
Composition of development pipeline Geographic composition of » Targeted towards affordable home‐buyer market Company‐owned land bank by value » Land bank located in strong markets » Strong presence in Vic and WA 17% » Pipeline has been strategically repositioned towards eastern states over Vic the
Slide 8: FM operating performance
FM operating performance Key performance statistics 1H10 FM revenue composition by type $m 1H10 1H09 Var (%) 8% Project Revenue 18.6 15.6 19% management & selling fees Operating expenses 4.1 3.9 5% 30% Manager's EBITDA 14.5 11.7 24% performance 62% Net EBITDA margin 78% 75% 4% fees Other Key operati
Slide 9: JV operating performance
JV operating performance Key performance statistics $m 1H10 1H09 Var (%) » Significant increase in lot sales from joint venture projects Revenue 9.4 5.5 71% Operating expenses 7.4 4.5 64% » Earnings from joint ventures were up due to increased margins and EBITDA 2.0 1.0 100% settlements l Net EBITDA
Slide 10: Composition of FM and JV managed pipeline
Composition of FM and JV managed pipeline » Funds management business is well positioned Geographic composition of land bank by value » Growth in revenue to come from: » Commencement of development of three existing syndicated projects to contribute 10% to earnings in CY10 18% » Increased profit sha
Slide 11: Cash flow analysis
Cash flow analysis » Operating cash flow influenced by focus on (45.7) » Working capital optimisations – i.e. tighter inventory 101 7 101.7 (8 3) (8.3) management (10.8) resulting in release (17.9) of capital 36.9 19.0 » Cost conscious management Revenue Operating and Interest and Income Tax Net ope
Slide 12: Capital management
Capital management » Core debt facility of $250m extended for a further three years to October 2012 » No debt maturity until July 2011 » Compliant with all debt covenants » DRP for first half dividend – 4 cents per share fully franked 31 Dec 09 30 Jun 09 31 Dec 08 Weighted W i ht d average d debt bt
Slide 13: Market outlook
Market outlook 13
Slide 14: Residential – market outlook
Residential – market outlook » Key drivers for residential remain positive – major Housing market balance: Australia undersupply of housing & low unemployment 400 350 » Demand in the more affordable market segment g 300 expected to be sustained 250 wellings ('000) 200 Underlying demand » Increased d
Slide 15: Residential – market outlook
Residential – market outlook » Melbourne continues to outperform with strong demand supported by affordable land supply and supporting infrastructure » Perth has remained relatively resilient – sales rates improving » Queensland experienced the largest slowdown – recovery to date has been mild STATE
Slide 16: Australian economic fundamentals
Australian economic fundamentals Population growth Several signs that the worst is over 500,000 » Unemployment rate remained below 6% 400,000 » Population continues to grow, while building 300,000 Average 1982 – 2009 - 245,000 people supply falls far short of demand People 200,000 Net overseas migra
Slide 17: Pipeline mix
Pipeline mix » In excess of 33,000 lots under management with end value of $6.7 billion1 » Pipeline weighted towards strongest markets (Vic and WA) » Focus remains on the affordable market segment » A total of 75 Company‐owned and managed projects across Australia » 29 syndicated projects – 16 curre
Slide 18: Scale and diversification
Scale and diversification » Strong market position especially in metropolitan regions in VIC & WA » Sizeable land bank creates scale benefits Western Australia Victoria Queensland 18 18
Slide 19: Strategy
Strategy 19
Slide 20: Strategy
Strategy » Peet’s strategic priorities remain » Core ‘affordable market’ – with a range of product at affordable prices » Focused businesses of residential development and funds management » Continuing expansion of retail syndication platform nationally » Maintain strong balance sheet to be able to
Slide 21: Key messages
Key messages Peet is well positioned to capitalise on the recovery in the housing market » Solid operating performance in challenging trading conditions » Entering second half with solid operating cash flows underpinned by: » 1,172 lots under contract ($234.7m) at December 2009; 12% increase in lots
Slide 22: Appendix: Additional information
Appendix: Additional information 22
Slide 23: Summary income statement
Summary income statement $m 1H10 1H09 Var (%) Funds management 18.6 15.6 19% Development 67.9 48.8 39% Other1 11.9 6.7 78% Revenue 98.4 71.1 38% EBITDA (pre inventory write‐downs) 38.5 24.8 56% Finance costs2 (5.9) (3.6) 64% Depreciation and amortisation (0.6) (0.3) 100% NPBT (pre‐inventory (pre in
Slide 24: Summary balance sheet
Summary balance sheet $m 31 Dec 09 31 Dec 08 Assets Cash 42.8 26.9 Receivables 53.0 24.4 Inventories 409.3 461.9 Investments accounted for using the equity method 32.1 29.8 Other 24.4 3.9 Total assets 561.6 546.9 Liabilities Trade and other payables 23.9 20.4 Land vendor liabilities 61.8 75.8 Intere
Slide 25: Business model
Business model High margin business with operating synergies across divisions Target EBIT Capital Land bank Operations margin employed3 » Acquisition Funds Lots: 18,191 » Development management Management1 65‐75% $115m GDV ($bn): 41 4.1 » Marketing No. of projects: 37 » Sales management 56% of EBIT2
Slide 26: 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,