Ingenia Communities Group · ASX:INA
Ingenia Communities — H1 2023 Earnings Presentation
40 slides from Ingenia Communities's earnings presentation, Feb 21, 2023
Slide 1: 1H23 Results Presentation
ASX / MEDIA RELEASE 21 February 2023 1H23 Results Presentation Ingenia Communities Group (ASX:INA) provides its 1H23 Results presentation. Authorised for lodgement by the Board. ENDS For further information please contact: Donna Byrne General Manager Investor Relations & Sustainability P 02 8263 050
Slide 2: Artist impression: Natura (Bobs Farm), NSW
Artist impression: Natura (Bobs Farm), NSW
Slide 3: Executing on strategy
Executing on strategy Position portfolio to enhance quality, optimise operational performance ♦ Focus on operational yields – added 76 new cabins to rental and holidays assets ♦ Divestment of non core assets to recycle capital and improve portfolio quality ♦ Sixteen lifestyle development projects un
Slide 4: Results summary
Results summary REVENUE STATUTORY PROFIT UNDERLYING EPS OPERATING CASH FLOW $173.6m $33.7m 8.5¢ $23.5m PERFORMANCE Ageing population, + 32% on 1H22 (16%) on 1H22 + 5% on 1H22 (39%) on 1H22 housing affordability, internal migration patterns and INVESTMENT NAV LVR DPS domestic travel PROPERTY1 driving
Slide 5: Business overview
Business overview* Investment Property $2.2b Owned/Managed Communities and Sites Future Development 109 6,450 Home sites owned or secured Employees Residents >1,450 >11,000 (>85% based in regional Calling Ingenia home locations) Rent ‘Room Nights’ ~14,500 >1.7m pa 46 Lifestyle Rental communities 38
Slide 6: Financial performance and capital management
Financial performance and capital management Ingenia Lifestyle Lara, VIC 21 FEBRUARY 2023 | 5
Slide 7: Key financials
Key financials 1H23 1H22 Revenue $173.6m $131.4m 32% ♦ Revenue growth driven by acquisitions, strong tourism performance, expansion of residential rental base and CPI linked rent increases EBIT1 $42.0m $33.9m 24% ♦ EBIT driven by strong operational performance partially offset by rising costs and in
Slide 8: Earnings growth moderated by construction lead times
Earnings growth moderated by construction lead times Positive outlook – demand for core businesses remains firm; settlements increasing as new homes complete EBIT 1H23 1H22 Residential Communities Lifestyle Rental $16.7m $10.1m 65% ♦ Strong rental growth due to CPI linked rental increases and additi
Slide 9: Capital management
Capital management Balance sheet and capital recycling to fund capital requirements Debt Metrics 31 Dec 22 30 Jun 22 Capacity to fund investment in growth Loan to value ratio (covenant <55%) 30.9% 25.7% ♦ $210 million in cash and available undrawn debt - LVR within target (30-40%) ♦ Increasing settl
Slide 10: Growth in value across core portfolios
Growth in value across core portfolios Cap rates stable – growth in NOI supporting values Av. Cap Rate Av. Cap Rate Dec 222 ♦ Independent valuation of 22 assets 1H23 (21% of portfolio) Portfolio Dec 221 Jun 221 Book Value ♦ Valuations recognise high occupancy and CPI based rent growth within the Lif
Slide 11: Operating performance
Operating Ingenia’s portfolio of $2 billion has an increasing focus on lifestyle communities (now 56% by book value) performance Portfolio retains embedded growth opportunities (infill sites and new development) Book Value Portfolio EBIT (by Portfolio at 31 December 2022) (at 31 December 2022) 43% 3
Slide 12: Residential communities
Ingenia Lifestyle Hervey Bay, QLD Residential Lifestyle Rental Ingenia Gardens communities Land lease Affordable rental communities Seniors communities catering to all ages2 rental villages Ingenia Lifestyle, Ingenia Rental catering to over 50s and Ingenia Gardens now total over 7,100 rent generatin
Slide 13: Ingenia Lifestyle Rental
Ingenia Lifestyle Rental Residential cashflows growing Inflation linked rents and additional scale delivering revenue growth Key Data 1H23 1H22 ♦ Total segment revenue up 65%, reflecting acquisitions, development Total revenue $37.3m $22.5m and investment in long-term rental homes EBIT $16.7m $10.1m
Slide 14: All age 'built to rent' experiencing strong demand
Ingenia Lifestyle Rental All age ‘built to rent’ experiencing strong demand Ingenia Rental communities at peak occupancy Since September 2020, Australian rent values experienced the largest increase on record, gaining 22.2% to December 20222 ♦ All age rental communities meeting demand for affordable
Slide 15: Case Study: Brisbane North Rental Village
Ingenia Lifestyle Rental Case Study: Brisbane North Rental Village Acquired February 2019 Acquisition price $29.5 million Book value $43.1m (Dec 2022) Current Rent $277 per week (average) Annual change in rental rates versus vacancy rates Total sites 281 (August 22)* Occupancy 98% (from 76% at acqui
Slide 16: Ingenia Gardens (seniors rental)
Ingenia Gardens (seniors rental) Strong, stable, government supported rent Key Data1 1H23 1H22 Ongoing high occupancy delivering stable cash flows Total revenue $14.1m $13.5m ♦ Majority of residents receive Commonwealth Pension and Rent EBIT $5.8m $6.0m Assistance EBIT margin2 40.8% 44.2% ♦ Resident
Slide 17: Ingenia Lifestyle Development
Ingenia Lifestyle Development Extended construction times key constraint on 1H23 settlements Key Data 1H23 1H22 Construction timeframes remain impacted by industry wide trade shortages and weather related delays (in select locations) New home settlements (100% INA) 115 121 ♦ Commenced FY23 with no i
Slide 18: Pipeline aligned to regions benefitting from population growth and net migration
Pipeline aligned to regions benefitting from population growth and net migration Development pipeline weighted to Queensland and regional/coastal locations ♦ Pipeline of 6,450 homes across 32 projects (in market and in planning) ♦ Further expansion in key coastal markets and South East Queensland •
Slide 19: Sales program adjusted to align with home completions and market conditions
Ingenia Lifestyle Development Sales program adjusted to align with home completions and market conditions Home releases recommenced October 22, aligned to home completions ♦ Construction delays have limited home releases as home completions drift into FY24 ♦ Delays at new premium projects (Nature’s
Slide 20: Construction remains key risk
Construction remains key risk Building construction capacity across key markets Weather impacts and trade constraints key challenge for home Victoria Point, QLD completions ♦ Some early signs of easing and greater access to trades Accelerating activity - FY23 construction volume materially above FY2
Slide 21: Building diversity and scale
Building diversity and scale Launch of nine new communities to drive growth in settlements Hervey Bay Victoria Point 264 remaining development sites 223 approved development sites Chambers Pines Lakeside Lara Fullerton Cove 137 remaining development sites 144 remaining development sites 122 approved
Slide 22: Building construction capacity
Building construction capacity Further diversification supporting scale and extending supplier network Macedon stone Gippsland modular Utilising prefabricated homes ♦ Mostly built offsite, roof completed onsite to align with existing to supplement community design on-site building at ♦ Fully built o
Slide 23: Holidays
Holidays Average daily rate (cabins) up more than 40% versus pre- COVID in line with strong demand1 Over 1H23, Ingenia Holidays Occupancy parks benefitted (at 62%) from an now expanded asset exceeding pre- base and COVID levels buoyant demand Broadening reach – database now 1 million+ Ingenia Holida
Slide 24: Ingenia Holidays
Ingenia Holidays Providing diverse locations and revenue streams ♦ Enhancing returns – additional accommodation and recent Key Data 31 Dec 221 31 Dec 21 acquisitions Holiday cabins 1,410 1,296 • Addition of 32 cabins to existing parks (further 30+ planned Caravan and camp sites 3,021 2,944 2H23) Ann
Slide 25: Ingenia Holidays
Ingenia Holidays Ongoing demand for domestic travel supporting strong performance and outlook Tourism rental income up 70% on 1H22, reflecting acquisitions, rate Key Data 1H23 1H22 growth and normalised trading conditions Tourism rental income $45.9m $27.0m ♦ Strong trading throughout 1H23 delivered
Slide 26: Capital partnerships
Capital partnerships Leveraging Ingenia’s platform and extending asset base via co-investment Ingenia Development Joint Venture with Sun Communities Joint Venture Total The Joint Venture was established in November 2018 and provides Managed Funds Ingenia with a capital partner in the development of
Slide 27: Development Joint Venture with Sun Communities (NYSE: SUI)
Development Joint Venture with Sun Communities (NYSE: SUI) Building momentum as four new projects commence Artist impression: Natura (Bobs Farm) NSW Three projects now underway ♦ Freshwater (Burpengary, QLD) now has 103 completed homes; additional 170 sites in place ♦ Natura (Bobs Farm, NSW) anticip
Slide 28: Strategy and outlook
Strategy and outlook Stable rent generating Key strategy drivers residential communities provide accelerating – ageing Business positioned a significant base of highly population, housing for future growth predictable, CPI linked cash affordability crisis, migration flows patterns and domestic trave
Slide 29: Sustainability
Sustainability Aligned to strategy, vision and values Environment All electric homes at current Commenced construction at Fullerton Partnership to create Net Zero and planned projects Cove and Beveridge targeting Green Star transportable cabin prototype – Communities rating 1H23 SELECT INITIATIVES S
Slide 30: Lifestyle communities - attractive housing option aligned to demographic trends
Lifestyle communities - attractive housing option aligned to demographic trends Ageing population and migratory trends supported by increasing market awareness ♦ Lifestyle (land lease) communities service a growing demographic ♦ Demand supported by ability to provide affordable, quality housing (pur
Slide 31: Positive outlook for holiday parks
Positive outlook for holiday parks Strong demand for domestic travel ♦ Caravan and camping consistently the largest provider of domestic holiday nights1 ♦ Long-term fundamentals support continued demand for caravan and camping ♦ Holiday parks benefitting from focus on domestic leisure travel and reg
Slide 32: Competitive landscape
Competitive landscape Sector maturing Residential, Holidays and Dev Pipeline - Site Counts 25,000 20,000 15,000 10,000 5,000 0 INA DHP GEM HTA SGP HPG NRMA PLR SRN LIC RHP Tourism Sites Residential Sites Dev Pipeline ♦ Transaction activity slowed in 1H23 following significant transactions in FY22 ♦
Slide 33: Outlook
Outlook Portfolio provides enhanced exposure to seniors housing and domestic travel Targeting growth in EBIT of ♦ Now over 14,500 operational revenue generating sites across residential and 0-10% on FY22 holidays portfolios and underlying ♦ Refining portfolio to enhance quality and scale benefits fo
Slide 34: Appendices
Appendices Ingenia Holidays Rivershore Resort, QLD 21 FEBRUARY 2023 | 33
Slide 35: Underlying profit
Appendix 1 Underlying profit 1H23 1H22 ($m) ($m) Lifestyle Development 6.8 10.0 Lifestyle Rental 16.7 10.1 Ingenia Gardens 5.8 6.0 Ingenia Holidays 20.8 12.7 Fuel, food & beverage 0.7 0.4 Capital Partnerships 2.3 2.0 Portfolio EBIT 53.1 41.2 Corporate costs (11.1) (7.3) EBIT 42.0 33.9 Share of profi
Slide 36: EBIT and underlying profit by segment
Appendix 2 EBIT and underlying profit by segment Residential Communities Tourism Other Capital Lifestyle Lifestyle Ingenia Fuel, Food ($m) Ingenia Holidays Partnerships1 Total Development Rental Gardens and Beverage and Corporate Rental income - 31.6 12.7 56.8 - - 101.1 Lifestyle home sales 49.6 - -
Slide 37: Cash flow
Appendix 3 Cash flow 1H23 1H22 ($m) ($m) Opening cash at 1 July 14.5 18.8 Rental and other property income 126.8 86.7 Property and other expenses (98.1) (59.6) Proceeds from sale of Lifestyle homes 54.0 50.3 Purchase of Lifestyle home inventory (49.9) (31.9) Net borrowing costs paid (8.2) (3.9) All
Slide 38: Consolidated balance sheet
Appendix 4 Consolidated balance sheet 31 Dec 22 30 Jun 22 ($m) ($m) Cash 10.6 14.5 Inventories 35.3 19.5 Investment properties 2,019.1 1,937.9 Investment in Joint Venture 65.0 66.1 Other financial assets 12.6 9.6 Intangibles 102.9 103.2 Other assets 43.2 32.2 Total assets 2,288.7 2,183.0 Borrowings
Slide 39: Ingenia Communities Group
Merry Beach, NSW Ingenia Communities Group Donna Byrne Karen Landy Level 3, 88 Cumberland Street, GM Investor Relations and Sustainability Chief Financial Officer (Acting) Sydney, NSW 2000 Tel: +61 2 8263 0507 Tel: +61 2 8263 0504 www.ingeniacommunities.com.au dbyrne@ingeniacommunities.com.au klandy
Slide 40: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) The forward looking statements included in this presentation involve subjective judgment and and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia analysis and are sub
Ingenia Communities Group — H1 2023 Earnings Presentation on 6ix