Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2019 Earnings Presentation
36 slides from Lifestyle Communities's earnings presentation, Aug 14, 2019
Slide 1: A Business for Purpose
A Business for Purpose Results Presentation Year ended 30 June 2019 14 August 2019
Slide 2: Contents
Contents Appendix 1. Overview 5 A.1 Model of living 24 2. Financial and operationls results 9 A.2 Growing recurring revenue 25 3. Outlook 19 A.3 Likely home settlement program 26 4. Summary 23 A.4 Dividend policy 27 A.5 Sales and Settlements 28 A.6 Investment Property Analysis 29 A.7 Investment Valu
Slide 3: Our Story
Our Story 2003 2004 2007 2012 2014 2016 2019 Founders James Kelly, Development of first Listed on the Major capital raising 1,000th 2,000th homeowner Acquired 18th Dael Perlov and community at Brookfield - Australian Stock of $36m homeowner moves in/ community site / Bruce Carter develop First homeo
Slide 4: A Business for Purpose
A Business for Purpose Photo of Aqua Club, taken at Lifestyle Ocean Grove An affordable housing option for 50% of An empowering and engaging customer Australians aged over 50 who have less service strategy that completely than $620,000 in total equity reimagines traditional retirement A sustainable
Slide 5: Overview
Overview FY19 FY18 FY19 results snapshot Financial Summary ($ million) ($ million) Net profit after tax attributable to shareholders $55.1 $52.7 Underlying net profit after tax attributable to shareholders $41.1 $33.8 Total assets $463.5 $358.2 Equity $254.7 $204.6 Dividends (interim and final) 5.5
Slide 6: Overview (cont.)
Overview (cont.) FY19 Highlights • 337 new home settlements • 2,2841 occupied home sites • 3,346 homeowners living in our communities • Portfolio of 3,5632 homes and home sites • 53 resale settlements during the year3 • Acquired new sites at Plumpton and Tyabb4 and an additional 4ha at Wollert • Und
Slide 7: Overview (cont.) Portfolio snapshot
Overview (cont.) Lifestyle Communities' portfolio Portfolio snapshot—30 June 2019 continues to grow organically through recycling capital Homes occupied or sold and awaiting settlement Total homes in Homes sold Homes sold and Communities communities and occupied awaiting settlement # % Existing Comm
Slide 8: Portfolio Overview and Land Acquisition Strategy
Portfolio Overview and Land Acquisition Strategy 18 Communities in planning, development or under management Lifestyle undertakes a detailed Focus remains on Melbourne and vetting of each potential site, and Geelong’s growth corridors prioritises acquisitions based on the • Melbourne has the strateg
Slide 9: Financial and operational results
Section 2 Financial and operational results Render of the Lifestyle Mount Duneed Clubhouse 9
Slide 10: FY19 Sales and Settlements
FY19 Sales and Settlements Community No. of homes Sold % Sold FY19 Highlights Shepparton 300 288 96% • Due to project phasing, the Company had limited new homes available for sale in the first half. The Company commenced actively selling Kaduna Park and Wollert Geelong 164 164 100% during the second
Slide 11: Sales rates
Sales rates The higher the sales rate, the faster capital is recycled to undertake more communities Sales profile from date of first sale • Sales rates continue to be driven by homeowner referral, brand awareness 250 and sales team training • Market strategy focusing on the Berwick Waters driver for
Slide 12: Sales Milestones and Customer Buying Triggers
Sales Milestones and Customer Buying Triggers Sales Launch Typical sales profile - Major sales milestones and customer buying triggers • Major customer event 250 • Local press marketing • Database engagement and EDM 200 Sales Suite opens onsite • First Impression! 150 • Typically construction activi
Slide 13: Innovation driving differentiation
Innovation driving differentiation LIFESTYLE Product Evolution PASSPORT We continue to evolve our product to meet the aspirations of the baby boomers: • New clubhouse design • Smart home options • Electric town cars and fast charging stations • Updated home specifications • Pickleball courts Custome
Slide 14: Land Acquisitions & Development Update
Land Acquisitions & Development Update TYABB • Land settled in May 2019 • Land contracts signed in March 2019 • Clubhouse and aqua club opened in January 2019 • Sales suite opened in July 2019 • Contracts are conditional on obtaining a • Achieved 152 settlements in FY19 • Preliminary works commenced
Slide 15: Recurring revenue streams
Recurring revenue streams Annuity income will continue to increase through new home settlements, rental increases and resales of existing homes There are two components to the Growing number of homes under management annuity stream: 2,400 2,284 1. Site Rental Fee –– $179 per single and $207 per coup
Slide 16: Income statement
Income statement • Net profit attributable to shareholders up 4.1% to $55.1 million (or FY19 FY18 % on an underlying basis up 21.7% to $41.1 million) Income statement ($’000) ($’000) Movement • Gross profit from home settlements increased to $29.6 million Home settlement revenue 119,270 100,115 19
Slide 17: Balance sheet
Balance sheet • Inventories increased due to the civils program at FY19 FY18 % Ocean Grove and Mount Duneed as well as housing Balance sheet highlights ($’000) ($’000) Movement stock to support forward sales at Bittern, Ocean Cash and cash on deposit 4,982 8,585 Grove and Shepparton Inventories 48,6
Slide 18: Cash flow
Cash flow • Cash flows from operations decreased to $5.8 million due to FY19 FY18 significant development activity at Bittern and Ocean Grove Cash Flow highlights ($’000) ($’000) • Receipts from customers increased by $11.6 million to $146.4 million Receipts from customers 146,374 134,791 due to inc
Slide 19: Outlook
Section 3 Outlook Homeowners and Staff supporting the Mother's Day Classic walk in May 2019 19
Slide 20: Outlook
Outlook • Settlements in FY20 expected to be in the range of 270 to 310 settlements FY19 FY20 FY21 • The settlement ranges constitute a forecast for FY20 and a projection Settlement Projection settlements settlement settlement for FY21 which is indicative only. They are both dependent on having (act
Slide 21: Summary
Section 4 Summary Homeowners performing at Lifestyle Has Talent
Slide 22: Summary
Summary • FY19 delivered 337 new home settlements • Lifestyle welcomed our 3,000th homeowner • Acquisitions at Plumpton and Tyabb and an extension of our Wollert Community have increased the total portfolio of homes to 3,5631 • Annuity income from site rental fees grew by $3.6m to $20.5m • Underlyin
Slide 23: Appendix
Appendix 23
Slide 24: A.1 Model of Living
A.1 Model of Living How does the Lifestyle Communities model of living work? Homeowners at Lifestyle Communities own their own home and lease the land upon which their Homeowners at homes are located, via a weekly site fee. Lifestyle Communities are protected by the Residential Tenancies Act. Homes
Slide 25: A.2 Growing Recurring Revenue
The speed at which Lifestyle can create new A.2 Growing Recurring Revenue communities is limited by the size of the capital Lifestyle's business has two core elements pool and the speed at which it can recover its capital through new home settlements. 1. Creating communities 2. Managing communities
Slide 26: A.3 Likely home settlement program
A.3 Likely home settlement program Community FY20 FY21 FY22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Shepparton Geelong Berwick Waters Bittern Ocean Grove Mount Duneed Kaduna Park1 Wollert1 Plumpton1 Tyabb2 Represents tail of development which is often a slower settlement rate Notes: 1. Commencement of c
Slide 27: A.4 Dividend policy
A.4 Dividend policy As a general principle, the Board of Lifestyle Communities intends to pay dividends out of post tax, operating cashflow generated from community management including: • Operating cash flow generated from community management (net rental and DMF) • Apportionment of corporate overh
Slide 28: A.5 Sales and Settlements
A.5 Sales and Settlements New home Resale homes net sales settlements Net sales commitments Resale home settlements commitments Mature Communities FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 Brookfield at Melton - - - - 11 15 10 14 Seasons at Tarneit - - - - 3 4 1 4 Warragul - - - - 9 14 10 10 Casey Fie
Slide 29: A.6 Investment Property Analysis
A.6 Investment Property Analysis Investment properties per Community Valuation Summary financials 30 June 2019 Total Homes Investment properties At fair value Homes Occupied at cost 1 ($m) ($m) Mature Communities Brookfield at Melton 228 228 6.8 34.3 Seasons at Tarneit 136 136 3.7 18.6 Warragul 182
Slide 30: A.7 Investment Valuation Metrics
A.7 Investment Valuation Metrics Community Valuation Summary (On completion) Rental Metrics DMF metrics (extracts from valuations) Last Net rental per home Average valuation Rental cap. (from valuation DMF discount DMF terminal sale value date rate 1 adjusted) 3 rate cap. rate 4 (GST incl.) Existing
Slide 31: A.8 Deferred management fees
A.8 Deferred management fees Casey Chelsea Brookfield Seasons Warragul Fields Shepparton Heights Hastings Lyndarum Officer Geelong Total Historical resales 123 27 60 43 12 34 28 4 8 3 342 Average tenure (years) 6.1 5.4 4.4 3.6 3.3 3.2 2.7 2.6 1.9 2.3 4.6 Average price growth p.a 5.1% 3.6% 3.7% 5.9%
Slide 32: A.9 Cash flow analysis FY19
A.9 Cash flow analysis FY19 Supplementary Cash Flow Chelsea Berwick Ocean Mount Kaduna Analysis for FY19 Brookfield Seasons Warragul Casey Fields3 Shepparton Heights3 Hastings Lyndarum Geelong Officer Waters Bittern Grove Duneed Park Wollert Plumpton Tyabb Total Total Number of Homes 228 136 182 217
Slide 33: A.10 Cash flow analysis FY18
A.10 Cash flow analysis FY18 Supplementary Cash Flow Casey Chelsea Berwick Ocean Mount Kaduna Wollert Analysis for FY18 Brookfield Seasons Warragul Fields3 Shepparton Heights3 Hastings Lyndarum Geelong Officer Waters Bittern Grove Duneed Park North Total Total Number of Homes 228 136 182 217 301 186
Slide 34: A.11 Fair value breakdown
A.11 Fair value breakdown Reconciliation of carrying values from FY2018 to FY2019 $'000 Investment Properties Carrying Value at 30 June 2018 303,573 At Lifestyle Communities our homeowners purchase a proportionate share of the clubhouse, pool, Land Acquisitions & Accruals for Contracted Land 40,439
Slide 35: Important notice and disclaimer
Important notice • This Presentation contains general suffered by any recipient through use this presentation, the words “forecast”, background information about Lifestyle or reliance on anything contained in or “estimate”, “expect”, “anticipated” and and disclaimer Communities Limited (LIC) and its
Slide 36: LIFESTYLE COMMUNITIES LIMITED
LIFESTYLE COMMUNITIES LIMITED Level 1, 1-17 Raglan Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au LIFESTYLE COMMUNITIES LIMITED A BUSINESS FOR PURPOSE 36