Ingenia Communities Group · ASX:INA
Ingenia Communities — H1 2017 Earnings Presentation
35 slides from Ingenia Communities's earnings presentation, Feb 21, 2017
Slide 1: 1H17 Results Presentation
Presented by Simon Owen and Shanthi Smith 21 February 2017 For personal use only Ingenia Lifestyle Lara INGENIA COMMUNITIES GROUP 1H17 Results Presentation
Slide 2: We Create Community
We Create Community For personal use only Page 2
Slide 3: Our Business Drivers
Our Business Drivers Ingenia operates in two complementary sectors with strong growth prospects For personal use only Demand Drivers Opportunity > Over 65’s fastest growing > Grow market awareness Affordable rent-driven 01. seniors housing demographic and penetration > Housing affordability > Home d
Slide 4: Highlights
Highlights For personal use only Now own 30 lifestyle and holiday communities (four under contract or option) STRATEGY Over 2,350 potential development sites (85% in metro and coastal locations) Refining portfolio in line with strategy (sale of non core villages) Underlying Profit $10.6 mill
Slide 5: Portfolio Evolving In Line With Strategy
Portfolio Evolving In Line With Strategy Rental assets in coastal and metro locations Core Portfolio by Value1 For personal use only Growing diversity and footprint in targeted markets • $123.7 million committed year to date in coastal and metro Garden Villages 24% acquisitions (832 established and
Slide 6: Business Overview
Business Overview Creating Australia’s best lifestyle communities For personal use only Over 4,100 Residents Ingenia has 62 Australian communities & growing Portfolio now over 3,250 Occupied permanent homes $588 million 750,000+ room nights p.a Villas and sites NT $ Annual revenue >$130 million Stab
Slide 7: Performance and Capital Management
Performance and Capital Management For personal use only Ingenia Lifestyle Bethania, QLD Page 7
Slide 8: Key Financials
Key Financials Growth in underlying earnings KEY FINANCIAL METRICS 1H17 1H16 CHANGE For personal use only Statutory profit1 $7.6m $10.8m (30%) • Statutory profit impacted by $7.5 million loss on sale of Settlers Revenue $65.4m $52.2m 25% assets Underlying profit2 $10.6m $8.4m 26% • Growth in underly
Slide 9: Growth in Values Across Core Portfolios
Growth in Values Across Core Portfolios AV. CAP AV. CAP DEC 16 • Independently valued 20 assets 1H17 (including five For personal use only PORTFOLIO RATE DEC RATE JUN BOOK lifestyle and holiday communities) 20161 20161 VALUE ($m) Garden Villages 9.89% 9.95% 139.5 • Garden Villages and Lifestyle and
Slide 10: Core Business Delivering Growth
Core Business Delivering Growth Core business driving strong EBIT growth (up 1H17 1H16 For personal use only ($m) ($m) Change 26%) with stronger second half expected EBIT Ingenia Lifestyle and Holidays (Seniors / Tourism) • Lifestyle and Holidays 11.4 7.2 58% • Rental base rapidly expanding with acq
Slide 11: Capital Management
Capital Management ($m)1 Australian debt Debt facility now ($300 million) For personal use only Total facility1 300.0 • Additional $76 million funding in place from February 2017 Total debt drawn 126.9 • New banking partner (Westpac) Bank guarantees 13.8 • Cost of funds driven by increased capacity
Slide 12: Strategy
Strategy For personal use only Ingenia South West Rocks, NSW Page 12
Slide 13: Capital Allocation and Strategy
Capital Allocation and Strategy Target Return Allocation of For personal use only Asset Class Strategy Threshold1 Future Capital Lifestyle / mixed-use > 7.5% ingoing yield > Immediate cashflow ~50% Core focus (E.g. Avina Van Village) supplemented by Investing in recurrent yield > 12% IRR reinvestmen
Slide 14: Strategy: Growth Drivers – Seniors Rental
Strategy Supported by key growth drivers: Seniors Rental Property ownership without a mortgage Superannuation account balances For personal use only (by age group) (by age Superannuation account group) balances (by age group) 100% 100% 6% 14% 13% 4% 90% 22% 24% 20% 7% 10% 80% 80% 14% 10% 15% 70% 14%
Slide 15: Strategy: Growth Drivers – Holidays
Strategy Supported by key growth drivers: Holidays Tourism GDP Establishments vs. Revenue For personal use only 60 1,700 1,600 50 1,400 1,650 1,200 Tourism GDP ($B) 40 1,600 1,000 30 1,550 800 600 20 1,500 400 10 1,450 200 0 1,400 0 Financial Year Establishments (LHS) Revenue ($m) (RHS) Source: ABS,
Slide 16: Operational Review
Operational Review Significant revenue growth achieved For personal use only Cairns Coconut Holiday Resort, QLD Page 16
Slide 17: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays Growing earnings KEY DATA 31 Dec 16 31 Dec 15 Rental revenue up 30% For personal use only Total properties 29 24 • Stable portfolio delivering >9.5% yield on purchase price Permanent sites 1,807 1,550 • Like for like asset level net operating income up over 14% Annual
Slide 18: Ingenia Holidays
Ingenia Holidays Enhancing returns through active management 1H17 KEY ACHIEVEMENTS For personal use only Tourism sites (by location) Extending presence in key metro and coastal locations • Acquired over 1,000 additional income producing sites year to date Coastal, 77% Regional, • New iconic parks (A
Slide 19: Ingenia Holidays Case Study – Lake Conjola, NSW
Ingenia Holidays Case study – Lake Conjola, NSW Key Initiatives Initial Outcomes For personal use only Acquired September 15 • Asset level operating margin up over 4% (revenue • Install new cabin stock (six in stage 1) growth and cost management)* • Integrate to portfolio website and revenue • OTA’s
Slide 20: Ingenia Lifestyle: Development
Ingenia Lifestyle: Development Sales growth delivered – targeting 190 sales FY17 Development Portfolio 1H17 1H16 1H17 KEY ACHIEVEMENTS For personal use only New home settlements 82 53 Settlement of 82 new homes expanding operating Deposited/Contracted 100 39 margin and yield across key communities G
Slide 21: Ingenia Lifestyle: Development Pipeline
Ingenia Lifestyle: Development Positioned for growth - quality metro and coastal sites Development Portfolio* 1H17 KEY ACHIEVEMENTS For personal use only Approved Subject To Total Approval Potential pipeline grown to over 2,350 sites Metro (51%) 463 735 1,198 • Over 1,100 sites available for immedia
Slide 22: Ingenia Garden Villages (Seniors Rental)
Ingenia Garden Villages (Seniors Rental) Strong, stable, government supported cashflows KEY ACHIEVEMENTS 1H17 KEY DATA 31 Dec 16 31 Dec 15 For personal use only Total properties 31 31 Occupancy and rent growth driving operational Total units 1,628 1,628 performance Av. weekly rent $326 $313 • Averag
Slide 23: Non-Core Assets
Non-Core Assets 31 Dec 16 30 Jun 16 1H17 KEY ACHIEVEMENTS For personal use only Settlers (DMF) value $10.9m $62.5m • Divestment of majority investment in five DMF assets 1H17 1H16 to Forum Partners completed October 2016 Accrued DMF income $1.6m $2.5m • Ingenia continues to manage the assets Develop
Slide 24: Market Landscape
Market Landscape For personal use only ► Continuing housing affordability challenges and consumer awareness of lifestyle communities driving increasing demand with limited new supply ► Increasing focus on mixed-use and development opportunities as new entrants seek scale ► Increased activity and dem
Slide 25: Outlook: Ingenia
Outlook: Ingenia ► Improve performance of existing assets to drive For personal use only revenue growth and leverage operating and sales platform ► Accelerate development pipeline to deliver new rental contracts and recycle capital ► Upgrading sales target to achieve 190 settlements in FY17 and posi
Slide 26: Appendices
Appendices For personal use only Ingenia Holidays Ocean Lake, NSW Page 26
Slide 27: Appendix 1: Underlying Profit
Appendix 1: Underlying Profit Lifestyle communities established as key driver of earnings growth For personal use only 1H17 1H16 (A$m) (A$m) Comments Continuing operations Lifestyle and Holidays 11.4 7.2 Rapidly growing development earnings combined with growth through acquisitions Garden Villages 5
Slide 28: Reconciliation - EBIT and Underlying Profit
Appendix 2 Reconciliation - EBIT and underlying profit For personal use only Lifestyle Lifestyle Lifestyle Garden (A$m) Operations Develop. Total Villages Settlers Corporate TOTAL Rental income 19.9 - 19.9 12.3 0.2 - 32.4 Accrued DMF fee income - - - - 1.6 - 1.6 Manufactured home sales - 24.9 24.9 -
Slide 29: Cashflow in Detail
Appendix 3 Cashflow in detail For personal use only (A$m) 31 Dec 2016 31 Dec 2015 Opening cash at 1 July 15.1 15.1 Rental and other property income 39.2 36.4 Net cashflow associated with manufactured home development 3.5 3.5 Net borrowing costs paid (2.9) (2.6) Income tax received/(paid) 0.1 - All o
Slide 30: Balance Sheet
Appendix 4 Balance sheet For personal use only 31 Dec 30 June (A$m) 2016 2016 Cash 8.3 15.1 Inventory 25.3 17.7 Investment property and property under development 566.8 710.7 Other assets 23.0 23.3 Assets held for sale - - Total assets 623.4 766.8 Borrowings 132.0 104.1 Derivatives 0.1 0.4 Retiremen
Slide 31: Competitor Landscape – Lifestyle Communities
Appendix 5 Competitor landscape – lifestyle communities Major Operators No. parks Locations Strategy Ingenia Lifestyle & Holidays 31 NSW, VIC & QLD Acquire lifestyle and tourism parks and undertake greenfield development. For personal use only Tourism and Mining Park Operators Discovery Holiday Park
Slide 32: Board Profiles
Appendix 6 Board profiles Jim Hazel For personal use only Non-Executive Chairman Mr Hazel has had an extensive corporate career in both the banking and retirement sectors. His retirement village operations experience includes being Managing Director of Primelife Corporation Limited (now part of Lend
Slide 33: Board Profiles
Appendix 6 Board profiles Amanda Heyworth For personal use only Non-Executive Director Ms Heyworth is a professional company director and currently chairs Executive Leadership Connection Pty Ltd. and is a director of UniSA Ventures Pty Ltd. She previously served as Executive Director of Playford Cap
Slide 34: Contact Information
Contact Information For personal use only SIMON OWEN CEO & Managing Director Tel: +61 2 8263 0501 Mob: +61 412 389 339 sowen@ingeniacommunities.com.au DONNA BYRNE Group Investor Relations Manager Tel: +61 2 8263 0507 Mob: +61 401 711 542 dbyrne@ingeniacommunities.com.au INGENIA COMMUNITIES GROUP Lev
Slide 35: Disclaimer
Disclaimer For personal use only This presentation was prepared by Ingenia Communities Holdings The forward looking statements included in this presentation involve Limited (ACN 154 444 925) and Ingenia Communities RE Limited (ACN subjective judgment and analysis and are subject to significant 154 4
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