Peet Limited · ASX:PPC
Peet — H1 2023 Earnings Presentation
34 slides from Peet's earnings presentation, Feb 23, 2023
Slide 1: Artist’s impression – Flagstone, QLD
Artist’s impression – Flagstone, QLD
Slide 2: 1H23 Results Agenda
1H23 Results Agenda 01 02 03 04 05 Group Results Operating Outlook Q&A Highlights Overview Performance Page 2 | 1H23 Results Googong, NSW
Slide 3: Company Overview
Company Overview • Leading Australian developer of quality residential communities with a proven track record for over 128 years WHOLESALE/ INSTITUTIONAL 9,265 lots1 • Large, nationally diverse land bank provides $2.8bn GDV economies of scale to deliver a wide range of product at lower cost RETAIL •
Slide 4: Strong Platform for Growth
Strong Platform for Growth GEOGRAPHICALLY DIVERSE $13.3bn • • Benefit from various growth corridors – positioned for future Australian population growth Allows Peet to leverage state-base fluctuations END VALUE • Ability to manage land bank and capital through market cycles 45 HIGHLY DESIRABLE LOCAT
Slide 5: Our Commitment to Sustainability
Our Commitment to Sustainability Our Sustainability Approach As a leading residential developer with a large national footprint, our approach focuses on sustainable practices to create long-term shared value for our communities, shareholders and people ENVIRONMENT SOCIAL GOVERNANCE ENVIRONMENTALLY C
Slide 6: Highlights
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Slide 7: 1H23 Results Highlights
1H23 Results Highlights Strong performance underpinned by high quality portfolio FINANCIAL OPERATIONAL 1H23 Net Operating Profit1 1H23 DPS $35.1m 3.50c 608 998 LOTS4 SOLD LOTS4 SETTLED +70% on 1H22 +56% on 1H22 Operating Earnings per Share 7.38c $1.25 NTA $775m 2 NEW PROJECTS CONTRACTS ON COMMENCED
Slide 8: Delivering against our Strategy
Delivering against our Strategy Significant value to be unlocked INVEST in high quality land EXPAND product offering MAINTAIN strong capital VALUE CREATION in strategic locations across and geographic presence to appeal management • Good visibility of future earnings country to wider variety of cust
Slide 9: Rapid Development Pipeline
Rapid Development Pipeline Strong pipeline of new projects to support future earnings 37,067 lots c. 88% Selling Projects: 3 Lots: 4,608 GDV: $765m c. 76% 32,459 lots Selling Projects: 3 c. 72% Lots: 4,381 Selling / GDV: $2,613m 28,078 lots Significant Development Projects: 6 Lots: 1,272 26,806 lots
Slide 10: Overview
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Slide 11: Group 1H23 Financial Results
Group 1H23 Financial Results Strong result reflects portfolio quality KEY PERFORMANCE STATISTICS 1H23 1H22 VAR (%) Sales activity impacted by interest rate increases and limited stock releases due to extended stage construction timeframes Lot sales1 608 1,809 (66%) Lot settlements1 Settlement activi
Slide 12: Group Cash Flow Summary
Group Cash Flow Summary 1H23 1H22 CASH FLOWS RELATED TO OPERATING ACTIVITIES $M $M Receipts from customers 182.9 112.1 Receipts higher due to increased settlement revenue from existing and new projects, Flagstone City and New Beith sale proceeds Payments for development and infrastructure (80.2) (56
Slide 13: Group Balance Sheet
Group Balance Sheet CAPITAL MANAGEMENT METRICS 1H23 FY22 Cash at bank1 $25.8m $55.4m Bank debt2 $151.2m $102.4m Cash and debt facility headroom of c.$147m provides capacity to fund Peet bonds 3 $150.0m $200.0m current portfolio Gearing4 30.8% 29.9% Bank debt higher due to repayment of $50m bond duri
Slide 14: Strong Financial Position
Strong Financial Position Strong starting position and visibility for 2H23 • Value of contracts on hand of $775m • Contract value per lot has increased 25% to c.$350k/lot since FY21 CONTRACTS ON HAND1 (LOTS) CONTRACTS ON HAND (VALUE) $930 m 2,597 $775 m 2,207 1,948 1,786 $547 m 1,257 $428 m $336 m F
Slide 15: Our Shareholder Returns
Our Shareholder Returns We have returned $136m to shareholders since FY18, through fully franked dividends and our ongoing capital management program • Disciplined application of our capital management framework and Shareholder returns since FY18 ($m) strong balance sheet means shareholders benefit
Slide 16: Performance
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Slide 17: Group Operating Performance
Group Operating Performance Increased Development weighting delivering results • Group EBITDA1 up 69% - Development earnings higher due to price 25% growth, townhouse settlements, 6% 5% Flagstone City and New Beith sale EBITDA1,2 7% proceeds COMPOSITION BY BUSINESS TYPE (%) - Funds management fee in
Slide 18: Group Sales and Settlement Activity
Group Sales and Settlement Activity Sales activity has moderated from peak levels • Group sales for 1H23 of 608 lots1 - Sales activity impacted by interest rate 16% 16% increases, lower FHB activity and limited stock releases due to extended stage construction timeframes impacting the timing of deli
Slide 19: Enquiry Levels Remain Solid
Enquiry Levels Remain Solid • Enquiry levels and buyer urgency have moderated 11,716 11,954 over 1H23 on the back of rising interest rates and lower consumer confidence in response to media commentary on inflation, construction timeframes and house values 8,896 - Buyers remain cautious waiting for i
Slide 20: Outlook
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Slide 21: New Projects Provide Medium Term Earnings Visibility
New Projects Provide Medium Term Earnings Visibility Pipeline of approximately 37,100 lots providing visibility of future earnings FY23 – FY25 NEW PROJECT RELEASE SCHEDULE • Up to three new land community projects and six PROJECT STATE SEGMENT PROJECT LOTS2/ GDV PROJECT LAUNCH1 UNITS LIFE townhouse/
Slide 22: FY23 Focus
FY23 Focus Portfolio well-positioned for positive growth and value creation INVEST in high quality land in EXPAND product offering and MAINTAIN strong capital strategic locations across country geographic presence to appeal to management wider variety of customers • Balance portfolio between land an
Slide 23: Group Outlook
Group Outlook • Residential markets continue to normalise from their peak as a result of interest rate increases and inflation Focused on positioning the Group for growth through a prudent approach to • Rising interest rates have impacted buyer sentiment, particularly for FHB, with sales activity mo
Slide 24: Appendices
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Slide 25: FM Operating Performance
FM Operating Performance KEY PERFORMANCE STATISTICS 1H23 1H22 VAR (%) Lower sales due to market conditions and reclassification of Lot sales1 240 1,042 (77%) Flagstone City to Development 1 Lot settlements 481 767 (37%) Revenue impacted by reduced fees from lower sales Revenue $3.9m $22.8m (83%) Sha
Slide 26: JV Operating Performance
JV Operating Performance KEY PERFORMANCE STATISTICS 1H23 1H22 VAR (%) Lower sales due to market conditions and completion of 1 Lot sales 127 450 (72%) Lightsview Lot settlements1 284 245 16% Equity accounted profits increased due to higher settlements at Revenue $18.0m $19.6m (8%) Googong Share of n
Slide 27: Development Operating Performance
Development Operating Performance KEY PERFORMANCE STATISTICS 1H23 1H22 VAR (%) Lot sales1 241 317 (24%) Lot settlements1 233 239 (3%) Higher revenue and EBITDA2 due to New Beith settlement Land only 189 176 7% in October 2022 Medium Density product 44 63 (30%) Revenue $144.6m $73.0m 98% Improved mar
Slide 28: Summary Income Statement
Summary Income Statement 1H23 1H22 VAR $M $M (%) Funds Management 3.9 22.8 (83%) Development 144.6 73.0 98% Joint Venture 18.0 19.5 (8%) Share of net profit of equity accounted investments 12.6 10.8 17% Other1 0.2 1.1 (82%) Revenue 179.3 127.2 41% EBITDA 55.0 32.6 69% Finance costs2 (5.5) (4.3) (28%
Slide 29: Summary Balance Sheet
Summary Balance Sheet 1H23 FY22 $M $M Assets Cash and cash equivalents 25.8 55.4 Receivables 86.4 84.9 Inventories 685.5 657.1 Investments accounted for using the equity method 197.6 188.0 Other 6.5 7.4 Total assets 1,001.8 992.8 Liabilities Payables 33.4 27.7 Land vendor liabilities 26.3 34.4 Borro
Slide 30: Land Bank Development Key Projects
Land Bank Development Key Projects PROJECT NAME STATE GDV1 LOTS REMAINING2 2023 2024 2025 2026 2027 Greenlea WA $2m 3 Glyde Street WA $61m 50 Glendalough WA $73m 100 Other WA $631m 3,898 Gladstone QLD $10m 326 Palmview QLD $54m 139 Spring Mountain QLD $65m 134 Strathpine QLD $23m 39 Nudgee QLD $51m
Slide 31: Land Bank Funds Management Key Projects
Land Bank Funds Management Key Projects PROJECT NAME STATE GDV1 LOTS REMAINING2 2023 2024 2025 2026 2027 Alkimos WA $909m 1,754 Brabham WA $685m 2,747 Burns Beach WA $143m 267 Eglinton WA $239m 906 Golden Bay WA $111m 566 Lakeland Estates WA $154m 741 Yanchep Golf Estate WA $434m 1,524 Oakford WA $1
Slide 32: Land Bank Joint Venture Key Projects
Land Bank Joint Venture Key Projects PROJECT NAME STATE GDV1 LOTS REMAINING2 2023 2024 2025 2026 2027 Wellard WA $51m 217 Edens Crossing QLD $142m 463 Googong3 NSW $607m 1,166 St Clair SA $40m 185 Forestville SA $59m 156 Total Joint Venture $899m 2,187 Total Pipeline $13,337m 37,067 LEGEND Planning
Slide 33: 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. This presentation contains forward-looking statements, including sta
Slide 34: Thank you
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