Slide 1: FY19 Results Presentation
FY19 RESULTS PRESENTATION 29 AUGUST 2019 1
Slide 2: Overview
OVERVIEW 2 FY19 RESULTS | AUGUST 2019 | 2
Slide 3: FY 2019 Results Highlights
FY 2019 RESULTS HIGHLIGHTS Financial Operational 1,257 REVENUE EBITDA OPERATING margin of PROFIT AFTER TAX 262.9m 33% 47.5m 13% 1% $ 3% $ land lots under contract with a value of $336m 2,629 EPS DPS ROCE FY19 fully franked 9.8cps 2% 5.0cps -% 11.8 % 2.9% Total lots settled c.65% NTA GEARING DEBT1,2
Slide 4: Who We Are
WHO WE ARE CAPITAL LITE FUNDS MANAGEMENT MODEL • Property development company established in 1895 • Listed on the ASX in 2004 • Australia’s largest listed ‘pure play’ residential property developer • Employs approximately 240 people • Manages a broad property portfolio, encompassing about 48 project
Slide 5: National Reach
NATIONAL REACH EXPANDING PORTFOLIO ACROSS COUNTRY 49,413 Peet manages a broad property portfolio, encompassing 49,400 LOTS lots across 48 projects Diversified land bank $14.5bn strategically located in growth END-VALUE corridors of major cities in every mainland state and territory of Australia Rang
Slide 6: Net Tangible Assets (NTA)
NET TANGIBLE ASSETS (NTA) SIGNIFICANT OPPORTUNITY TO CAPTURE FUNDS MANAGEMENT VALUE IN NTA NET ASSET VALUATION - $2.1bn in Assets Under Management PEET CAPITAL THIRD PARTY CAPITAL NTA: $1.20 NTA PEET INVENTORIES PEET CO-INVESTMENTS FUNDS MANAGEMENT AND JV $388 million1 $467 million1 $1,238 million1
Slide 7: Delivering Against Our Strategy
DELIVERING AGAINST OUR STRATEGY PORTFOLIO WELL POSITIONED FOR POSITIVE MEDIUM TO LONG TERM GROWTH AND VALUE CREATION STRATEGY KEY ACHIEVEMENTS (FY19) • 49,400 lots with an end value of $14.5bn Invest in high quality land in strategic • Four medium density & one broadacre projects acquired INVEST loc
Slide 8: Results Overview
RESULTS OVERVIEW FY19 RESULTS | AUGUST 2019 | 8
Slide 9: Group FY19 Financial Results
GROUP FY19 FINANCIAL RESULTS KEY HIGHLIGHTS KEY PERFORMANCE STATISTICS FY19 FY18 VAR (%) Group sales were down due to restrictive lending conditions across the 1 Lot sales 1,629 2,950 (45%) broader market and a moderating Victorian market Lot settlements1 2,629 2,924 (10%) Group revenue2 of $262.9m
Slide 10: Long-Term Growth in Shareholder Returns
LONG-TERM GROWTH IN SHAREHOLDER RETURNS KEY HIGHLIGHTS OPERATING PROFIT AFTER OPERATING EPS (CENTS) DPS (CENTS) TAX ($M) 49.1 10.0 5.0 5.0 47.5 9.8 44.8 4.8 42.6 9.1 4.5 4.5 8.7 38.5 8.3 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 LONG-TERM GROWTH IN EARNINGS DRIVEN BY
Slide 11: Group Balance Sheet: Continued Execution of Capital Management Strategy
GROUP BALANCE SHEET CONTINUED EXECUTION OF CAPITAL MANAGEMENT STRATEGY CAPITAL MANAGEMENT METRICS FY19 FY18 FY17 NET DEBT6 ($M) AND GEARING4 (%) Cash at bank1 $33.6m $76.7m $88.4m 31% Bank debt2 $23.2m $69.5m $151.7m 25% Peet bonds/convertible notes3 $225.0m $150.0m $100.0m 23% 4 19% Gearing 24.6% 1
Slide 12: Group Cashflow Summary
GROUP CASHFLOW SUMMARY FY19 FY18 FY19 FY18 CASH FLOWS RELATED TO OPERATING ACTIVITIES • Operating cash flows (before acquisitions) lower than previous period due to: $M $M Receipts from customers 269.8 325.3 ‒ Divestment during 1H18 of an Englobo land parcel in VIC; capitalising on the recent market
Slide 13: Operating Performance
OPERATING PERFORMANCE FY19 RESULTS | AUGUST 2019 | 13
Slide 14: Peet Operating Segments
PEET OPERATING SEGMENTS 100% PEET OWNED FUNDS MANAGEMENT JOINT VENTURES DEVELOPMENT • Funds raised from combination of wholesale / • Economic interests in syndicates and JVs, • Developments that are 100% owned by institutional / retail investors with Peet generally entered into on a 50/50 basis with
Slide 15: Group Operating Performance
GROUP OPERATING PERFORMANCE • Contribution from eastern states’ projects represented 86% of EBITDA1,2 PEET’S DIVERSIFIED PORTFOLIO OF PROJECTS HAS ALLOWED IT TO CAPITALISE ON THE EASTERN STATES’ STRENGTH - Contribution driven by low cost VIC Development projects - VIC & QLD to benefit most from an i
Slide 16: Group Sales and Settlement Activity
GROUP SALES AND SETTLEMENT ACTIVITY 8% 18% Group sales1 for FY19 of 1,629 lots – down 45% • Sales activity impacted by restrictive lending conditions, SALES1 completion of several VIC projects during FY18, and moderation of 1% 21% market conditions particularly Melbourne COMPOSITION BY • Sales condi
Slide 17: Contracts on Hand
CONTRACTS ON HAND 2500 CONTRACTS ON HAND1 (LOTS) CONTRACTS ON HAND IMPACTED BY 2000 2,186 2,257 LOWER SALES ACTIVITY 1500 Contracts on hand1 have decreased by 44% since 30 June 2018 to 1,257 lots: 1000 1,257 • Strong lot settlements from VIC projects 500 - Settlement risk significantly mitigated due
Slide 18: Market Overview + Project Pipeline
MARKET OVERVIEW + PROJECT PIPELINE 18 FY19 RESULTS | AUGUST 2019 | 18
Slide 19: Market Volumes and Outlook
MARKET VOLUMES AND OUTLOOK MARKET VOLUMES EXPECTED TO STABILISE ACROSS MOST MARKETS PEET SUMMARY VICTORIA QUEENSLAND WESTERN AUSTRALIA ACT SOUTH AUSTRALIA FY19 FY19 FY19 FY19 FY19 • Strong economic growth, with • Sales volumes & prices steady • Net migration strong and • Ongoing challenges in WA • G
Slide 20: Growth and Resilience, Through Cycles
GROWTH AND RESILIENCE, THROUGH CYCLES TRACK RECORD OF GROWING SHAREHOLDER VALUE OVER THE LONG-TERM • A diversified portfolio of property assets captures opportunities across key markets and provides strength through cycles • Counter cyclical acquisition strategy has allowed the Group to capitalise o
Slide 21: Overview of Peet's Land Bank
OVERVIEW OF PEET’S LAND BANK LAND BANK REPRESENTS APPROXIMATELY 14 YEARS’ LOT SUPPLY Sizeable and diversified land bank across all mainland states and territories LAND BANK COMPOSITION BY BUSINESS TYPE (LOTS1) • Pipeline of approximately 49,400 lots with an on 60,000 completion value of approximatel
Slide 22: New Projects Supporting Growth
NEW PROJECTS SUPPORTING GROWTH PIPELINE OF APPROXIMATELY 49,400 LOTS PROVIDING FY20 – FY22 NEW PROJECT RELEASE SCHEDULE VISIBILITY OF FUTURE EARNINGS Project State Segment Commencement of Lots1/Units Project Life Up to seven new land projects Sales/Development (Years) and five medium density townhou
Slide 23: New Projects Supporting Growth: Projects / Lots
NEW PROJECTS SUPPORTING GROWTH PROJECTS / LOTS DEVELOPING & SELLING 60,000 50,000 49,413 lots Projects: 8 Lots: 9,468 NO. OF LOT/UNITS 39,945 lots 40,000 Projects: 12 30,904 lots Lots: 9,041 30,000 20,000 Projects: 28 Lots: 30,904 10,000 30 JUNE 2019 FY20 - FY22 FY23 & BEYOND YEAR FY19 RESULTS | AUG
Slide 24: Outlook
OUTLOOK FY19 RESULTS | AUGUST 2019 | 24
Slide 25: Market Outlook
MARKET OUTLOOK PEET IS FOCUSED ON STRATEGICALLY POSITIONING THE GROUP FOR AN IMPROVING MARKET THROUGH A CONSERVATIVE APPROACH TO PROJECT DELIVERY AND IDENTIFYING OPPORTUNITIES FOR GROWTH • Market conditions remain mixed, with steady employment growth, record low interest rates, recent income tax cut
Slide 26: Strategic Outlook
STRATEGIC OUTLOOK PORTFOLIO WELL POSITIONED FOR POSITIVE MEDIUM TO LONG TERM GROWTH AND VALUE CREATION STRATEGY OUTLOOK • Selective acquisition of projects as cycles, markets and Invest in high quality land in strategic opportunities allow to restock pipeline INVEST locations across country • Focus
Slide 27: Appendices
APPENDICES FY19 RESULTS | AUGUST 2019 | 27
Slide 28: FM Operating Performance
FM OPERATING PERFORMANCE 10% 17% FM SALES1 KEY PERFORMANCE STATISTICS FY19 FY18 VAR (%) COMPOSITION BY Lot sales1 909 1,782 (49%) GEOGRAPHY Lot settlements1 1,535 1,796 (14%) (LOTS) 25% Revenue VIC $26.4m $35.2m (25%) QLD Share of net profit of equity accounted investments $7.9m $5.5m 44% WA SA EBIT
Slide 29: JV Operating Performance
JV OPERATING PERFORMANCE 3% 17% KEY PERFORMANCE STATISTICS FY19 FY18 VAR (%) JV SALES1 29% GEOGRAPHY Lot sales1 414 756 (45%) (LOTS) Lot settlements1 539 690 (22%) VIC QLD 22% Revenue $38.8m $46.9m (17%) WA NSW/ACT Share of net profit of equity accounted investments $5.0m $8.3m (40%) SA NT EBITDA2 $
Slide 30: Development Operating Performance
DEVELOPMENT OPERATING 19% PERFORMANCE DEVELOPMENT SETTLEMENTS1 8% COMPOSITION BY KEY PERFORMANCE STATISTICS FY19 FY18 VAR (%) GEOGRAPHY (LOTS) Lot sales1 306 412 (26%) VIC 1 61% Lot settlements 555 438 27% 9% QLD WA Land only 489 382 28% 3% NSW/ACT SA Medium Density product 66 56 18% Completed Homes
Slide 31: FY19 Annexures
FY19 ANNEXURES FY19 RESULTS | AUGUST 2019 | 31
Slide 32: Summary Income Statement
SUMMARY INCOME STATEMENT FY19 FY18 Var $M $M (%) Funds Management 26.4 35.2 (25%) Development 181.1 200.0 (9%) Joint Venture 38.8 46.9 (17%) Share of net profit of equity accounted investments 12.9 13.8 (6%) Other1 3.7 5.9 (37%) Revenue 262.9 301.8 (13%) EBITDA 86.0 101.3 (15%) Finance costs2 (20.3)
Slide 33: Summary Balance Sheet
SUMMARY BALANCE SHEET FY19 FY18 $M $M Assets Cash and cash equivalents 33.6 76.7 Receivables 125.2 124.4 Inventories 518.7 493.9 Investments accounted for using the equity method 233.7 222.8 Other 10.9 11.5 Total assets 922.1 929.3 Liabilities Payables 65.7 82.5 Land vendor liabilities 6.4 20.1 Borr
Slide 34: Land Bank Funds Management Key Projects
LAND BANK FUNDS MANAGEMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Alkimos WA $1,150m 2,369 Selling Burns Beach WA $218m 372 Selling Eglinton WA $248m 1,041 Planning Start up Selling Golden Bay WA $181m 756 Selling Completion Lakelands WA $183m
Slide 35: Land Bank Development Key Projects
LAND BANK DEVELOPMENT KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Brigadoon WA $40m 95 Selling Greenlea WA $47m 281 Selling Completion Mundijong WA $187m 781 Planning Start up Selling Other WA $657m 4,043 Planning Gladstone QLD $86m 333 Selling Fla
Slide 36: Land Bank Joint Venture Key Projects
LAND BANK JOINT VENTURE KEY PROJECTS PROJECT LIFECYCLE PROJECT NAME STATE GDV1 LOTS REMAINING2 2020 2021 2022 2023 2024 Wellard WA $120m 562 Selling Brabham WA $783m 3,333 Planning Start up Selling Pier Street WA $98m 184 Planning Start up Selling Completion Redbank Plains QLD $200m 863 Selling Goog
Slide 37: 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