Peet Limited · ASX:PPC
Peet — Macquarie WA Forum 2013
19 slides from Peet's conference presentation, Oct 17, 2013
Slide 1: Macquarie WA Forum Presentation
For personal use only Macquarie WA Forum Presentation October 2013
Slide 2: Key messages
Key messages Transformational year with major acquisition, capital raising and successful syndicate launch For personal use only » Operating profit after tax of $15.2m 1, above the top end of Peet’s guidance in April 2013 » Statutory profit after tax of $0.2m » Includes write-downs after tax of $13.
Slide 3: Investment case for Peet Limited
Investment case for Peet Limited Australia’s only large scale pure-play residential exposure; ability to leverage existing platform For personal use only Pure play » Australia’s only scale pure-play residential land development business » Disciplined focus on core competency – not distracted by othe
Slide 4: Group Business model
Group Business model Land Bank Target EBIT Target EBIT Diversification by Land Bank Capital Sources of Composition M argin Geography (% ) Employed1 Revenue For personal use only 2 25 23 36 41 Lots: 13,221 40% – 50% EBIT Development 20% -25% GDV ($bn): 3.0 $439m » Development profit # Projects: 33 36
Slide 5: Business Transition on Track
Business Transition on Track Continued reweighting of business to FM / higher ROCE projects For personal use only » Majority of land bank now in Funds Management or capital efficient structures » CIC provides four additional major strategic projects in capital efficient structures (Googong, Crace,
Slide 6: Group financial summary
Group financial summary » Performance impacted by challenging $m FY13 FY12 Var (%) For personal use only market conditions and capital management Revenue 205.0 146.9 40% strategy EBITDA 48.0 46.6 3% » Result in line with expectations EBITDA margin 23% 32% (9%) » Pricing competition, particularly in
Slide 7: Group operating performance
Group operating performance » Sales up strongly over FY12 FY13 FY12 Var (%) For personal use only » Predominantly driven by WA Lot sales1,2 2,308 1,776 30% and Vic Lot settlements1,2 2,091 2,052 2% » Sales momentum improved in 2H13 with volumes increasing by 40% Contracts on hand 1,956 958 104% comp
Slide 8: Contracts on hand
Contracts on hand Contracts on hand – by state » Contracts on hand1 at 1,956 $485 For personal use only 2000 $500 30 June 2013 of 1,956 lots for $485 Contract value Millions2 3 728 $400 3 $206 million 1500 Vic 71 $300 $267 WA Lots1 $17 » Significant increase 1000 958 233 $25 $43 Qld 98 as markets st
Slide 9: Update on CIC acquisition
Update on CIC acquisition For personal use only » Peet acquired 86% of CIC by way of off-market takeover in May 2013 » Acquired for $0.60 per CIC share, a 13% discount to CIC net assets » Business has been performing in line with expectations » The acquisition of CIC has resulted in a net contributi
Slide 10: Australian Residential Market Update
Australian Residential For personal use only Market Update
Slide 11: Residential market overview
Residential market overview Mortgage rate level implies further Housing price growth now outpacing For personal use only housing price gains household incomes 21.0% 4.0% 25% Housing price growth Housing price growth (6 month annualised, LHS) Household income growth Mortgage rate (inverted, 6 month a
Slide 12: Residential market overview
Residential market overview Housing prices have averaged 5.4x income Population growth has picked up ahead of for a decade housing supply For personal use only 7x 2.5% Dwelling growth Population growth Period average: 5.4x 6x 2.0% 5x Period average: 3.3x 1.5% 4x Price to income ratio 3x 1.0% 2x 0.5%
Slide 13: Residential market overview: price to income ratio
Residential market overview For personal use only Price to income ratio A$’000 900 Black line below shows Median house price (LHS) 10x average price to income ratio House price to income (RHS) 800 +20% 9x 700 +10% 600 +5% 8x 500 7x 400 300 6x 200 5x 100 0 4x 2004 2006 2008 2010 2012 2014 2016 Source
Slide 14: Residential market overview
Residential market overview New lending driven by investors and Non-performing loans low, despite rising repeat buyers unemployment For personal use only Housing approvals (investment) 6.5% Unemployment rate (LHS) 0.7% 10 Housing approvals (first home buyers) Past due items (RHS) A$bn 6.0% 0.6% 8 5.
Slide 15: Residential market overview: market recovery underway
Residential market overview Market recovery underway For personal use only WA » Residential land market improving – developer volumes up 49% on FY12 with price growth now emerging » Developer stock is at lowest levels since 2006 » Positive economic fundamentals including population growth and improv
Slide 16: Residential market overview
Residential market overview ACT and adjoining NSW For personal use only » Strong population growth in recent years – may be tempered by Federal Election » Highest average state income and low unemployment » Land sales remain strong and looks to continue in the mid term due to a shortage of supply »
Slide 17: Outlook
Outlook Peet’s land bank, combined with its strengthened balance sheet, supports profit growth For personal use only » Underlying foundations of the residential sector remain sound » Cautious view on short-term outlook – overall recovery expected, but gradual » Mixed market conditions expected to pe
Slide 18: Thank you
For personal use only Thank you
Slide 19: Disclaimer
Disclaimer » While every effort is made to provide accurate and complete information, Peet does not warrant or For personal use only 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 whic