Peet Limited · ASX:PPC
Peet — Macquarie WA Forum (October 2015)
31 slides from Peet's conference presentation, Oct 14, 2015
Slide 1: Macquarie WA Forum Presentation
For personal use only Macquarie WA Forum Presentation October 2015
Slide 2: FY15 Results Overview
FY15 RESULTS OVERVIEW Continued strong momentum For personal use only » Strong uplift in FY15 operating profit1 after tax to $38.5m, up 22% » Strong underlying business performance FY14 Result FY14 − Revenue Resultup 22% from FY14 with 3,266 lots settled − EBITDA2 up 25% to $92.4m − Improvement in E
Slide 3: Key Highlights for FY15
KEY HIGHLIGHTS FOR FY15 » Peet moved to 100% ownership of CIC post CIC share buyback For personal use only » Selective acquisitions of land holdings to restock pipeline, predominantly through funds platform − Acquired seven new projects comprising more than 4,000 lots/dwellings with GDV1 of circa $1
Slide 4: Key Highlights for FY15 (Continued)
KEY HIGHLIGHTS FOR FY15 (CONTINUED) » A total of 140 apartments settled in FY15 For personal use only MEDIUM » A further 340 apartments under construction or in the design phase DENSITY » Pipeline of approximately 1,700 units/apartments identified across national portfolio FY14 Result FY14 Result »
Slide 5: Results overview
For personal use only Results overview
Slide 6: Group Financial Summary
GROUP FINANCIAL SUMMARY » Significant increase in revenue over FY15 driven KEY PERFORMANCE STATISTICS FY15 FY14 VAR (%) by the Development business For personal use only Lot sales 3,229 3,525 (8%) Lot settlements 3,266 3,491 (6%) » Operating profit2 after tax of $38.5m - up 22% Revenue1 $360.9m $296
Slide 7: Improving Financial Performance
IMPROVING FINANCIAL PERFORMANCE Growth in earnings via improvement in margins and ROCE For personal use only » Operating profit1 after tax up 110% since FY13 representing a CAGR2 of 45%, boosted by acquisition of CIC » EBITDA1 CAGR of 32% since 1,990 FY13, helped by improving margins 1,990 − Ongoing
Slide 8: Focus on Driving Shareholder Returns
FOCUS ON DRIVING SHAREHOLDER RETURNS OPERATING EPS (CPS) DPS (CPS) NTA PER SHARE ($) For personal use only Book NTA Market adjusted NTA 8.3 1.18 1.17 7.3 4.5 1.00 3.5 1.00 1.04 5.4 0.89 FY13 FY14 FY15 - FY13 FY14 FY15 FY13 FY14 FY15 » EPS CAGR of 24% since FY13 » FY15 DPS of 4.5cps, fully franked »
Slide 9: Capital Management
CAPITAL MANAGEMENT Significant improvement in capital position » Increase in ROCE to 13.8% For personal use only − Increase in ROCE2,184 through increasing use of capital efficient structures − Improved underlying earnings performance − Targeted sale of non-core assets − Successful launch of retail
Slide 10: Group Business Model
GROUP BUSINESS MODEL Land Bank Target EBIT Target EBIT Diversification by Capital Sources of Composition Margin Land Bank Employed2 Geography (%)1 Revenue For personal use only 1 1 22 24 35 40 Lots: 12,572 40% – 50% Development 20%-25% GDV ($bn): 2.6 $407.8m » Development profit EBIT # Projects: 28
Slide 11: Operating performance
For personal use only Operating performance
Slide 12: Group Operating Performance
GROUP OPERATING PERFORMANCE » Increased contribution from Development projects For personal use only » Higher contribution from Victoria driven by Aston and NSW/ACT driven by Quayside » Funds Management business provided solid earnings base representing 30% of Group EBITDA1 » East coast EBITDA contr
Slide 13: Contracts on Hand
CONTRACTS ON HAND » Contracts on hand1,2 up 12% to 2,311 lots since 30 June 2015 For personal use only 2,184 − Increase driven by continuing solid east coast market conditions » Victorian and ACT/NSW contracts on hand have increased since year end contributing to an 18% increase in the contract valu
Slide 14: CIC Investment Return
CIC INVESTMENT RETURN LAND BANK CONTRIBUTION BY GEOGRAPHY (LOTS2) CIC continues to deliver strategic and financial benefits 100% For personal use only 5% » CIC acquisition has delivered Peet strong returns and 6% significant geographic diversification at an attractive acquisition price 80% 40% 36% »
Slide 15: Operational update
For personal use only Operational update
Slide 16: For personal use only
For personal use only MACQUARIE WA FORUM PRESENTATION ǀ OCTOBER 2015 ǀ PAGE 16
Slide 17: Overview of Peet's Land Bank
OVERVIEW OF PEET’S LAND BANK » Diversified land bank across all mainland states and territories For personal use only » WA exposure balanced against Eastern seaboard » WA exposure weighted toward FM and JV, with relatively lower proportion of development projects located in WA LANDBANK COMPOSITION B
Slide 18: Aston, Craigieburn, Victoria
ASTON, CRAIGIEBURN, VICTORIA For personal use only Aston is a 200 hectare greenfield master planned community located 32 km north of the Melbourne CBD, in the thriving northern growth corridor. The community will accommodate approximately 2,500 lots along with a range of amenities, including a Neigh
Slide 19: Googong, NSW/ACT
GOOGONG, NSW/ACT For personal use only Googong is a 780 hectare greenfield master planned community situated 16 km from Canberra CBD. The community will accommodate approximately 6,000 homes, three schools, community and childcare facilities, two local Neighborhood Centres, a Major Town Centre and 3
Slide 20: Flagstone City, QLD
FLAGSTONE CITY, QLD For personal use only Flagstone is a 1,245 hectare greenfield master planned community situated 38 km South West of Brisbane’s CBD. The community will accommodate over 11,000 lots, four schools, community and childcare facilities, a local District Centre, a Central Business Distr
Slide 21: New Projects in FY16 - FY18
NEW PROJECTS IN FY16 - FY18 Pipeline of approximately 47,000 lots providing visibility of future earnings For personal use only » Up to 12 new projects expected to commence FY16 - FY18 PROJECT RELEASE SCHEDULE development within the next 2-3 years Project State Segment First Sales Lots Project Life
Slide 22: Capital management
For personal use only Capital management
Slide 23: Capital Management
CAPITAL MANAGEMENT Strong capital management strategy outcomes For personal use only » Cash and available facilities of $127.4m CAPITAL MANAGEMENT METRICS FY15 FY14 » Weighted average cash cost of bank debt (excluding Cash at bank $57.7m $38.8m convertible notes) reduced to 6.6% Bank debt $186.2m $2
Slide 24: Group Cash Flow Summary
GROUP CASH FLOW SUMMARY Cash generated from operations applied to accelerate production from new and existing projects to meet demand For personal use only » Cash borrowing costs anticipated to be lower due to reduced debt levels and newly entered interest rate hedges FY15 FY14 CASH FLOWS RELATED TO
Slide 25: Cash Flow
CASH FLOW For personal use only CASH FLOW PRE AND POST ACQUISITIONS ($M) » Development of existing pipeline to be self-funded through operating cash flows 133.2 » Disciplined execution of capital management strategy to reduce cash flow needs 113.3 − Majority of land bank now in Funds Management 73.2
Slide 26: Market overview & outlook
For personal use only Market overview & outlook
Slide 27: Residential Market Overview
RESIDENTIAL MARKET OVERVIEW Melbourne » Ongoing strong population growth to support dwelling demand For personal use only − Metropolitan Melbourne will see an additional 1.8m people over the next 20 years, equals 90,000 new residents per year − Volumes expected to stabilise near current high levels
Slide 28: Perth Corridor Exposure
PERTH CORRIDOR EXPOSURE » North West corridor demand has moderated the most as a result of strong volume and price growth For personal use only over the past few years » South West corridor demand and pricing relatively stable » North East & South East corridors performing well due to affordable pri
Slide 29: Outlook
OUTLOOK Portfolio well positioned for sustainable long-term growth and value creation » Outlook supported by market fundamentals For personal use only − Greatest near term exposure to well-performing Vic market − Qld contribution to increase due to Flagstone City commencing development during FY16 −
Slide 30: Thank you
For personal use only you Thank
Slide 31: 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