Peet Limited · ASX:PPC
Peet — Macquarie Australia Conference 2010
25 slides from Peet's conference presentation, May 5, 2010
Slide 1: Peet Limited – Macquarie Australia Conference May 2010
For personal use only PEET LIMITED Macquarie Australia Conference f May 2010 SUCCESS THROUGH EXPERIENCE 1
Slide 2: Introduction to Peet Limited
Introduction to Peet Limited For personal use only Australia’s largest specialist residential land acquirer, developer and fund manager » Established E t bli h d iin 1895 1895; lilisted t d on ASX iin 2004 (ASX (ASX:PPC); PPC) market $700m1 k t cap approx. c. $700 » Simple and transparent Australian
Slide 3: Market position
Market position Significant national land bank with strong project diversification For personal use only » Sizeable land bank of c. 33,000 lots – 14 years supply based on current sales rates » Si ifi t land Significant l d sales l across a number b off states t t – market k t position iti expected t
Slide 4: Peet investment case
Peet investment case Australia’s only 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 exposure » Disciplined foc focuss on core competenc competency – not distracted bby oth
Slide 5: Business model
Business model High margin business with operating synergies across divisions For personal use only Target EBIT Capital Land bank6 Operations margin employed3 » Acquisition Funds Lots: 18,191 » Development management Management1 65‐75% $115m GDV ($bn): 41 4.1 » Marketing No. of projects: 37 » Sales
Slide 6: 1H10 Performance overview
1H10 Performance overview Strong performance across the business For personal use only » Operating results » Operating net profit after tax up 50% to $21 $21.7m 7m » Revenue increased by 38% to $98.4m » EPS of 7.3 cents, an increase of 55% » Group EBITDA margin increased from 35%1 to 39% » More than
Slide 7: Financial and operating performance
For personal use only Financial and operating performance 7
Slide 8: Group key financial highlights – 1H10
Group key financial highlights – 1H10 » Group revenue increased by 38% to $98m For personal use only $m 1H10 1H09 Var (%) » Lot sales of 1,407 ‐ up 57% Revenue 98.4 71.1 38% » Settlements up 42% to 1 1,292 292 EBITDA1 38.5 24.8 56% » Significant settlement revenue from high‐margin Company‐owned proj
Slide 9: Composition of development pipeline
Composition of development pipeline For personal use only Geographic composition of » Targeted towards affordable home‐buyer market Company‐owned land bank by value » Land bank located in strong markets » Strong presence in Vic and WA 17% » Pipeline has been strategically repositioned towards easter
Slide 10: Composition of FM and JV managed pipeline
Composition of FM and JV managed pipeline For personal use only » Funds management business is well positioned Geographic composition of FM and JV land bank by value » Growth in revenue to come from: » Commencement of development of three existing syndicated projects to contribute 10% to earnings in
Slide 11: Shorehaven at Alkimos Project
Shorehaven at Alkimos Project » Peet’s largest managed fund For personal use only » Comprises approximately 3,300 dwellings » Est end value of c.$1.1bn Est. c $1 1bn (today (today’ss $) over 12 yrs » Peet equity interest approx. $25m / 14% » Institutional partners » To provide long‐term recurrent fe
Slide 12: Cash flow analysis – 1H10
Cash flow analysis – 1H10 For personal use only » Operating cash flow influenced by focus on (45.7) » Working capital optimisations – i.e. tighter inventory 101 7 101.7 (8 3) (8.3) management (10.8) resulting in release (17.9) of capital 36.9 19.0 » Cost conscious management Revenue Operating and In
Slide 13: Capital management
Capital management For personal use only » Core debt facility of $250m extended to October 2012 » No debt maturity until July 2011 » Compliant with all debt covenants » DRP for first half dividend – 4 cents per share fully franked 31 Mar 10 31 Dec 09 30 Jun 09 Weighted W i ht d average d debt bt mat
Slide 14: Sales update – FY10 YTD
Sales update – FY10 YTD » Over 1,400 sales recorded in 1H10 (up 57% from 1H09) For personal use only » More than 2,170 lot sales achieved FY10 YTD1 » Currently 1,232 lots under contract ($271m)1 ‐ 5% increase in lots and a 15.5% increase in contract value compared to December 09 Lot sales Lots under
Slide 15: Market outlook
For personal use only 15 Market outlook
Slide 16: Residential – market outlook
Residential – market outlook » Key drivers for residential remain positive – major Housing market balance: Australia For personal use only undersupply of housing & low unemployment 400 350 » Demand in the more affordable market segment g 300 expected to be sustained 250 wellings ('000) 200 Underlyin
Slide 17: Residential – market outlook by state
Residential – market outlook For personal use only » Melbourne continues to outperform with strong demand supported by affordable land supply and supporting infrastructure » Perth has remained relatively resilient – sales rates improving » Queensland experienced the largest slowdown – recovery to da
Slide 18: Australian economic fundamentals
Australian economic fundamentals Population growth Several signs that the worst is over For personal use only 500,000 » Unemployment rate remained below 6% 400,000 » Population continues to grow, while building 300,000 Average 1982 – 2009 - 245,000 people supply falls far short of demand People 200,
Slide 19: Pipeline mix
Pipeline mix For personal use only » In excess of 33,000 lots under management with end value of $6.7 billion1 » Pipeline weighted towards strongest markets (Vic and WA) » Focus remains on the affordable market segment » A total of 75 Company‐owned and managed projects across Australia » 29 syndicat
Slide 20: Scale and diversification
Scale and diversification For personal use only » Strong market position especially in metropolitan regions in VIC & WA » Sizeable land bank creates scale benefits Western Australia Victoria Queensland 20 20
Slide 21: Strategy
For personal use only 21 Strategy
Slide 22: Strategy
Strategy For personal use only Peet will continue to responsibly identify and explore growth opportunities in line with strategic objectives, building on a quality asset base » Peet’s strategic priorities remain » Core ‘affordable market’ – with a range of product at affordable prices » Focused busi
Slide 23: Key messages
Key messages For personal use only Peet is well positioned to capitalise on the ongoing improvement in the housing market » Solid operating performance » Second half performance delivering solid operating cash flows underpinned by: » 1,232 lots under contract ($271m) at 30 April 10; 5% increase in l
Slide 24: Thank you - Questions
For personal use only Thank you ‐ Questions 24
Slide 25: Disclaimer
Disclaimer For personal use only » 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. Subject to any terms implied by law and whic