Slide 1: FY14 Annual Results Presentation
Ingenia Communities Group FY14 Annual Results Presentation For personal use only 26 August 2014 New homes at Mudgee Tourist and Van Resort, NSW
Slide 2: Ingenia today
Ingenia today For personal use only A leading provider of affordable Australian seniors housing built around two key portfolios generating quality recurrent operating cashflows. This scaleable platform is well positioned for further expansion through embedded capital light low risk development and f
Slide 3: Financial highlights
Financial highlights For personal use only ► Total segment revenue up 49% to $49 million ► Underlying profit up 97%, to $11.6 million ► Active Lifestyle Estates contributed $3.9 million (21% of Portfolio EBIT) in first full year ► Garden Villages EBIT contribution up 28.6% ► Underlying profit EPS up
Slide 4: Delivering on strategy
Delivering on strategy FY14 achievements For personal use only Increase focus on cash generating portfolios Active Lifestyle Estates and Garden Villages now 67% of portfolio Divest non core assets Terms agreed for sale of NZ Student Portfolio Largest lifestyle park operator in NSW – 15 Lifesty
Slide 5: Portfolio update
Portfolio update Increasing emphasis on cash yielding assets For personal use only 30 June 2013 30 June 2014 Target allocation asset value Proforma asset value (post divestment) Garden Villages DMF Garden Garden DMF 44% 20% Villages Villages 35% 33% ~ 30% $122.5m $227.5m Continued $350.0m growth NZ
Slide 6: Ingenia's interest in the Aspen Parks Property Fund
Ingenia’s interest in the Aspen Parks Property Fund For personal use only > Aspen Parks Property Fund (APPF) is a portfolio of 21 tourism and mining caravan parks based across NSW, Victoria, WA and SA > A majority of the parks are located in existing Ingenia market clusters and many offer the abilit
Slide 7: Group overview
Group overview For personal use only Outperformance against S&P/ASX 300 AREIT over 1, 3 & 5 years Corporate (at 18 Aug 2014) 80 INA vs. Benchmark indices 67.2 to 30 Jun 2014 (% p.a.)1 ASX Code INA 70 60.8 60 55.8 Market cap $315m 50 Securities on Issue 678m % 40 Register Top 20 (holdings) 79% 30 20
Slide 8: Portfolio update
Portfolio update Diversified Australian portfolio dominated by cash yielding assets For personal use only Today, Ingenia has 57 Australian communities and growing Largest owner, operator and Lifestyle Parks developer of Lifestyle 15 villages Parks in NSW > 1,093 permanent homes > 1,038 short term si
Slide 9: Key financials
Key financials For personal use only Pool at Drifters Village, Kingscliff NSW p9
Slide 10: Key financials
Key financials For personal use only Key financial metrics 30 Jun 2014 30 Jun 2013 Change > Garden Villages EBIT contribution increased to $9.9m Statutory profit / (loss)1 $11.5m ($10.3m) nm > Active Lifestyle Estates strong contribution of Underlying profit2 $11.6m $5.9m 97% $3.9m with the majority
Slide 11: Underlying profit
Underlying profit For personal use only FY14 FY13 Underlying profit (A$m) (A$m) Comments (FY14) Continuing operations - Garden Villages 9.9 7.7 Incremental contribution from acquired villages combined with occupancy and rate growth - Settlers Lifestyle 4.5 5.6 Reduction due to some projects nearing
Slide 12: Capital management
Capital management Improved yield and funding capacity For personal use only Australian debt FY14 (A$m) Full year distribution of 1.15c per security Total facility 129.5 Total debt drawn 94.0 > Final distribution increase to 0.65 cents per security Bank guarantees 4.4 > Payment to be made on 17 Sept
Slide 13: Valuations summary
Valuations summary For personal use only FY14 FY14 Independent FY14 FY13 External External Cap rate / Book Book Segment Valuations Valuations Discount rate Value Value # $m % $m $m Comments > Six external valuations reaffirming acquisition Active Lifestyle prices (pre transaction costs) Estates 6 37
Slide 14: Portfolio update
For personal use only Portfolio update p14
Slide 15: Active Lifestyle Estates (Lifestyle Parks)
Active Lifestyle Estates (Lifestyle Parks) Ingenia’s growth focus - Lifestyle Parks For personal use only > High yielding assets with low risk, capital light development > Finite pool of valuable land zoned for lifestyle and tourist parks in tightly held markets > Fragmented ownership offering consi
Slide 16: Active Lifestyle Estates: Recent marketing initiatives
Active Lifestyle Estates cont. Recent marketing initiatives For personal use only Targeted local marketing has driven strong sales launch at Ettalong Beach Holiday Village p16
Slide 17: Active Lifestyle Estates: Significant progress made in Lifestyle Parks
Active Lifestyle Estates cont. Significant progress made in Lifestyle Parks For personal use only Development pipeline includes: • existing sites already approved • conversion of certain Short Term sites into Permanent sites • optimisation of certain Permanent sites p17
Slide 18: Strength of business model now emerging
Active Lifestyle Estates cont. Strength of business model now emerging For personal use only FY14 ACHIEVEMENTS KEY DATA FY14 FY13 > Integrated 13 new assets, including transition of systems Total properties 15 2 and staff Total permanent sites 1,093 200 > Developed standardised digital footprint, sa
Slide 19: Significant tourism business adds considerable revenue growth
Active Lifestyle Estates cont. Significant tourism business adds considerable revenue growth For personal use only Tourism FY14 FY13 Growing tourism portfolio Total ALE properties 15 2 > 1,008 tourism sites added to the Lifestyle Parks portfolio throughout FY14, growing Tourist cabins 377 22 the por
Slide 20: Momentum in sales and pipeline building
Active Lifestyle Estates cont. Momentum in sales and pipeline building For personal use only FY14 FY13 FY14 ACHIEVEMENTS KEY DATA Total properties 15 2 > 18 homes delivered across four communities > Planning approvals in place across nine villages (over 435 home Development pipeline units 917+ 84 si
Slide 21: Sales performance
Active Lifestyle Estates cont. Sales performance For personal use only Village New Refurbished Contracted Available Average (12 months to 30 Jun 2014) Settlements Settlements and Stock Sales Price Reserved The Grange (Morisset) 7 2 1 - $260k Nepean (Penrith) 5 1 1 - $242k Subtotal 12 3 2 - 1 July to
Slide 22: Lifestyle Parks: key observations
Active Lifestyle Estates cont. Lifestyle Parks: key observations For personal use only > Demand for quality and affordable homes is generally very strong > Resident and family awareness of the financial benefits of lifestyle villages (equity cash out, access to rent assistance, affordability) low bu
Slide 23: Garden Villages (Rental)
Garden Villages (Rental) For personal use only Focus on care and wellness is improving resident quality of life whilst driving occupancy and revenue growth p23
Slide 24: Garden Villages: Record occupancy and recent acquisitions
Garden Villages cont. Record occupancy and recent acquisitions drive earnings growth For personal use only FY14 ACHIEVEMENTS KEY DATA FY14 FY13 > Occupancy closed at 84.6% on 30 June 2014 (like for like was 90.1%) Total properties 34 29 > Integrated and repositioned five new villages including impro
Slide 25: Improved occupancy and acquisitions drive earnings growth
Garden Villages cont. Improved occupancy and acquisitions drive earnings growth For personal use only FOCUS > Grow occupancy towards 92% target whilst enhancing margins > Continue to drive community engagement across the local market to position Ingenia as preferred accommodation supplier > Improve
Slide 26: Ingenia Care Assist (ICA)
Ingenia Care Assist (ICA) For personal use only How does Ingenia Care Ingenia assists Assist work ? existing resident (or family) complete application to access New resident moves into an Ingenia village due to ease of home-care package access to home-care from accredited package provider Transport
Slide 27: Ingenia Care Assist: Delivering occupancy and income growth
Ingenia Care Assist cont. Delivering occupancy and income growth For personal use only What is Ingenia Care Assist? > An Ingenia facilitated ageing in place strategy that delivers government funded home care packages to our residents through accredited local care providers > ICA is a free service fo
Slide 28: Settlers Lifestyle (Deferred Management Fee)
Settlers Lifestyle (Deferred Management Fee) For personal use only Open Day – showcasing Stage 2 development at Ridge Estate Village, Maitland NSW p28
Slide 29: Settlers Lifestyle: Focus on sales and capital recycling
Settlers Lifestyle cont. Focus on sales and capital recycling For personal use only KEY DATA FY14 FY13 FY14 ACHIEVEMENTS Total properties 9 9 > 57 settlements totalling $12.5m achieved in FY14, with an additional 20 contracts in place as at 30 June 2014 Total units 980 950 > FY14 has seen the sell d
Slide 30: New Zealand students portfolio
New Zealand students portfolio Sale terms agreed For personal use only > Portfolio refurbishment complete January 2014 > Weltec lease commenced Feb14 in McKenzies building contributing NZ$2m in first year of 15 year lease > Sales campaign undertaken for whole of portfolio divestment > Terms agreed w
Slide 31: Outlook
Outlook For personal use only ► Increasing delivery and sales of new homes across existing Lifestyle Parks key short term priority ► Prospective acquisition deal flow remains strong, with focus on NSW and South East QLD ► Expand Ingenia Care Assist to support occupancy growth and resident tenure ► P
Slide 32: Outlook: FY15 focus
Outlook FY15 focus For personal use only Complete business repositioning > Finalise sale of NZ Students portfolio > Actively assess options to recycle low yielding capital into growing Lifestyle Parks and development pipeline > Continue to grow exposure to Lifestyle Parks through conversion of acqui
Slide 33: Appendices
Appendices For personal use only Big 4 Valley Vineyard, Cessnock NSW p33
Slide 34: Reconciliation to EBIT and Underlying Profit
Appendix 1 Reconciliation to EBIT and Underlying Profit from continuing operations For personal use only Active Lifestyle Garden Settlers Corporate TOTAL Estates Villages (DMF) (A$m) (Lifestyle Parks) (Rental) Rental income 9.6 21.0 1.0 - 31.6 Accrued DMF fee income - - 5.3 - 5.3 Manufactured home s
Slide 35: Underlying Profit and operating cashflows
Appendix 2 Underlying Profit and operating cashflows For personal use only FY13 to FY14 Underlying Profit reconciliation 15 3.0 (2.9) 0.9 3.5 (1.4) 1.5 10 (1.1 ) $m 2.2 11.6 5 5.9 0 Underlying profit Garden Villages Settlers Lifestyle Active Lifestyle Corporate costs Net finance costs Income tax ben
Slide 36: Cashflow in detail
Appendix 3 Cashflow in detail For personal use only Australian NZ Total (A$m) Operations Students Cashflows Opening cash at 1 July 2013 38.6 (1.0) 37.6 Cashflow generated from operations 17.4 2.7 20.1 Net borrowing costs paid (4.2) (1.6) (5.8) Income tax paid – continuing operations (0.1) - (0.1) Ne
Slide 37: Balance sheet
Appendix 4 Balance sheet For personal use only Australian NZ Adjustments1 Total Operations Students Statutory (A$’000) Balance Sheet Cash 12,894 1,657 (1,657) 12,894 Inventory 2,208 - - 2,208 Investment property and property under development 498,863 45,902 (45,902) 498,863 Other assets 7,863 98 (98
Slide 38: Income tax benefit reconciliation
Appendix 5 Income tax benefit reconciliation For personal use only > Income tax benefit of $7.3m recognised following tax consolidation of Ingenia Communities Management Trust > Recognition of tax losses generated a benefit offsetting Active Lifestyle Estates taxable earnings > Enhanced securityhold
Slide 39: Portfolio statistics: Active Lifestyle Estates
Appendix 6 Portfolio statistics: Active Lifestyle Estates For personal use only Book Value Development Property Name Location 30 June 2014 (A$m) Cap Rate Permanent Sites Short Term Sites1 Total Sites upside The Grange Morissett, NSW 10.8 9.1% 152 - 152 50+ Ettalong Beach Ettalong Beach, NSW 2.8 21.0
Slide 40: Portfolio statistics: Active Lifestyle Estates
Appendix 7 Portfolio statistics: Active Lifestyle Estates For personal use only Lifestyle Parks short term sites composition (number of units by site type) Self Contained Caravan & Camping Total Property Name Location Annual Sites Accommodation Sites Short Term Sites Ettalong Beach Ettalong Beach, N
Slide 41: Portfolio statistics: Garden Villages (Rental)
Appendix 8 Portfolio statistics: Garden Villages (Rental) For personal use only Book Value Occupancy Occupancy Property Name Location 30 June 2014 (A$m) Cap Rate Total Units 30 June 2014 30 June 2013 Western Australia Swan View Gardens Swan View 6.0 11.5% 72 100% 100% Seville Grove Gardens Seville G
Slide 42: Portfolio statistics: Garden Villages (Rental)
Appendix 8 cont. Portfolio statistics: Garden Villages (Rental) For personal use only Book Value Occupancy Occupancy Property Name Location 30 June 2014 (A$m) Cap Rate Total Units 30 June 2014 30 June 2013 Victoria Grovedale Gardens Grovedale 4.0 10.5% 51 100% 98% St Albans Park Gardens St Albans Pa
Slide 43: Portfolio statistics: Settlers (DMF)
Appendix 9 Portfolio statistics: Settlers (DMF) For personal use only Book Value 30 June 2014 Occupancy Occupancy Property Name Location (A$m) Discount Rate Total Units 30 June 2014 30 June 2013 Ridgewood Rise Ridgewood, WA 18.6 14.3% 240 100% 100% Noyea Park1 Mt Warren Park, QLD 5.4 13.8% 149 98% 9
Slide 44: Portfolio statistics: NZ students
Appendix 10 Portfolio statistics: NZ students For personal use only Book Value Book Value 30 June 2014 30 June 2014 Property Name Location (NZ$m) (A$m)1 Cap Rate Cumberland House Wellington, NZ 15.8 14.7 8.6% Education House Wellington, NZ 7.8 7.2 8.6% McKenzie Apartments Wellington, NZ 25.8 24.0 8.
Slide 45: Development pipeline – Active Lifestyle Estates
Appendix 11 Development pipeline – Active Lifestyle Estates For personal use only Dev Sites Total Estimated Requiring Potential completion value Cluster/Community Acq. Date Approved Dev. Sites Approval Dev. Sites ($m) Key Activities Hunter/Newcastle One Mile Beach, NSW Dec 2013 - 45+ 45+ 11.2 Projec
Slide 46: Competitor landscape – Lifestyle Parks
Appendix 12 Competitor landscape – Lifestyle Parks For personal use only Major operators represent <5% of market opportunity Major Operators No. of parks Locations Strategy Active Lifestyle 15 NSW Acquire existing lifestyle and tourism parks with low risk capital light Estates (Ingenia) development
Slide 47: Settlers (DMF) sales
Appendix 13 Settlers (DMF) sales For personal use only WA NSW QLD Lakeside Meadow Ridgewood Cessnock Ridge Rock- Forest Gladstone Noyea Total Springs Rise Estate hampton Lake (strata)2 12 months to 30 June 2014 No. of new sales 7 - - 6 8 15 13 6 2 57 Average new sales prices ($’000) 316 - - 235 315
Slide 48: US Market – key statistics
Appendix 14 US Market – key statistics For personal use only 50,000 MH (Manufactured Home) Communities (44,000 have 10 spaces or greater) 12,000 RV (Recreational Vehicle) Communities 19.2 million people (6% of US population) live in an MH Community Three listed REITs own 500 Communities Top 100 Grou
Slide 49: US Market – key statistics
Appendix 14 cont. US Market - key statistics For personal use only 20% of US households earn < $20,000 p.a. One third of all new manufactured homes purchased on credit Number of people turning 55 every day Annual income for a senior provided through social security Cap rate on A-Grade community in k
Slide 50: US Market – key statistics
US Market – key statistics For personal use only 20% of US households earn < $20,000 p.a. One third of all new manufactured homes purchased on credit Number of people turning 55 every day Annual income for a senior provided through social security Cap rate on A-Grade community in key market Average
Slide 51: Disclaimer
Disclaimer For personal use only This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia Communities Fund (ARSN 107 459 576) and Ingenia Communities Management Trust (ARSN 122 928