Peet Limited · ASX:PPC
Peet — Macquarie Australia Conference 2009
31 slides from Peet's conference presentation, May 7, 2009
Slide 1: Presentation to the Macquarie Australia Conference 2009
For personal use only Peet Limited Presentation to the Macquarie Australia Conference 2009 May 2009 asset manager land syndicator fund manager asset manager land syndicator fund manager asset manager land syndicator fund manager asset manager Peet Limited | Enriching lives since 1895
Slide 2: Contents
Contents For personal use only » Overview of Peet Limited 3 » Financial performance 9 » Business model 14 » Investment case 18 » Outlook and strategy 22 » Appendix 25 Peet Limited | Enriching lives since 1895 2
Slide 3: Overview of Peet Limited
For personal use only Overview of Peet Limited Peet Limited | Enriching lives since 1895
Slide 4: Introduction to Peet Limited
Introduction to Peet Limited For personal use only Australia’s largest specialist land acquirer, developer and fund manager » Established in 1895; listed on ASX in 2004 (ASX:PPC); market cap approx. $400m » Simple and transparent Australian consumer business » Acquisition, development and sale of re
Slide 5: Market position
Market position For personal use only Third largest land bank and highest project diversification amongst listed peers » Significant land bank of 36,100 lots – 15 years supply based on current production rates » Significant land sales across a number of states – market position expected to improve »
Slide 6: 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 – 53% held off balance sheet Western Australia Victoria Queensland New South Wales Peet Limited | Enriching lives since 1895 6
Slide 7: Historical performance
Historical performance Strong historical performance; business well positioned for improved conditions For personal use only » Strong historical performance – 3 year EBIT CAGR of 18% » Despite current environment, business performance remains robust, albeit at levels lower than those historically ac
Slide 8: Historical performance: Return on Assets
Historical performance Capital efficient model has resulted in consistently high returns For personal use only » Return on Assets averaging 13.6% over the past 3 years » Return on Equity of 34.2% in FY08 Three year average ROA1 15.0% 13.6% 12.0% 11.0% 10.6% 9.0% 7.1% 6.0% 5.6% 5.7% 5.3% 5.0% 4.5% 4.
Slide 9: Financial Performance
For personal use only Financial Performance Peet Limited | Enriching lives since 1895
Slide 10: 1H09 performance overview
1H09 performance overview For personal use only » Strong operating performance for 1H09 » Result derived from ordinary business operations » Earnings not supported by englobo asset sales » Solid performance in Victorian affordable home buyer segment » Western Australian market has responded well to
Slide 11: 1H09 key highlights
1H09 key highlights For personal use only » Revenue of $71.2m, an increase of 23% pcp » Operating EBITDA (pre inventory write downs) of $23.1m, an increase of 3% pcp » Operating NPAT of $14.5m, a decrease of 5% pcp » Statutory NPAT of $10.5m, a decrease of 31% pcp » Impacted by pre-tax inventory wri
Slide 12: Sales update – FY09 YTD
Sales update – FY09 YTD Over 675 sales recorded in Q309; 1,250 lots currently under contract For personal use only » Sales of 1,574 lots from July 08 – March 09; strong increase in sales in Q309 » 1,250 lots under contract ($230m); increase of approx. 34% vs. 31 Dec 2008 » Solid start to Q409 Lot sa
Slide 13: Capital position
Capital position Active capital management maintains competitive position For personal use only » Current gearing of 33%1 » No debt maturity until March 2010 – $235m core facility matures Dec 2010 » Currently in discussions with single banking provider about extension » Successfully raised approx. $
Slide 14: Business model
For personal use only Business model Peet Limited | Enriching lives since 1895
Slide 15: Business model
Business model For personal use only High margin business with operating synergies across divisions Target Capital Landbank Operations EBIT margin employed3 » Acquisition Funds Lots: 19,100 » Development management Management1 60-70% $95m GDV ($bn): 4.4 » Marketing No. of projects: 34 » Sales manage
Slide 16: Funds management – retail syndication model
Funds management – retail syndication model Fully integrated scale business; company-owned distribution network For personal use only » Four level fee structure across life cycle of fund » Scale business with established track record: 28 syndicated projects with GDV of $4.4bn1 » Owned retail distrib
Slide 17: Funds management – Alkimos wholesale fund
Funds management – Alkimos wholesale fund For personal use only » Peet’s largest managed fund » Comprises approximately 3,300 dwellings » Est. end value of $1bn (today’s $) over 11 yrs » Peet equity interest approx. $25m / 14% » Institutional partners » Planning and approvals progressing on track »
Slide 18: Investment Case
For personal use only Investment Case Peet Limited | Enriching lives since 1895
Slide 19: Peet investment case
Peet investment case Australia’s only pure-play residential exposure; ability to leverage existing platform For personal use only » Australia’s only scale pure-play land development business Pure play exposure » Disciplined focus on core competency – not distracted by other operations » Capital effi
Slide 20: Land / residential investment case
Land / residential investment case For personal use only Medium and long-term fundamentals for residential land remain compelling » Mortgage affordability at historical highs due to low interest rates and govt incentives » Continued federal and state government support of sector » Key contributor to
Slide 21: Australian residential market fundamentals
Australian residential market fundamentals Owner-occupier housing finance has increased by 33% since September 2008 For personal use only » Strongly improving housing affordability has led to strong rise in owner occupier finance approvals » Bank lending to owner-occupiers increased by 8.2% in March
Slide 22: Outlook and strategy
For personal use only Outlook and strategy Peet Limited | Enriching lives since 1895
Slide 23: Outlook
Outlook For personal use only » Strong fundamentals » Lowest interest rates in 45 years; significantly improved affordability » Significant under-supply of residentially zoned and permitted land » Strong population growth » Government incentives / support of sector » Key challenge – unemployment » S
Slide 24: Strategy
Strategy For personal use only » Peet’s strategic priorities remain to » Focus on core businesses of funds management and residential land development » Continue to meet the needs of its core markets – first and second home buyers – with a range of product at affordable prices » Remain proactive and
Slide 25: Appendix
For personal use only Appendix Peet Limited | Enriching lives since 1895
Slide 26: FM and JV pipeline
FM and JV pipeline For personal use only » 19,100 lots under management; estimated on-completion value of $4.4 billion1 No. Lots2,3 2009 2010 2011 2012 2013 Botanic Village 761 Brimbank Gardens 733 Brookland Greens 124 Cardinia Lakes 621 VIC Cranbourne Central 706 Cranbourne Syndicate 611 Melton 533
Slide 27: Company-owned pipeline
Company-owned pipeline For personal use only » 17,000 lots owned; estimated on-completion value of $2.8 billion1 » A total of 47 company-owned projects – 31 located across east coast » Number of owned projects have historically low cost base No. Lots2,3 2009 2010 2011 2012 2013 Castlereagh 512 Craig
Slide 28: Group operating performance
Group operating performance For personal use only Key performance statistics 1H09 EBITDA composition by business type1 $m 1H09 1H08 Var (%) 4% Revenue 71.2 57.8 23% Operating expenses 48.1 35.3 36% Funds management 40% 1 Development EBITDA 23.1 22.5 3% 56% JVs Net EBITDA margin1 32% 39% (18)% Key op
Slide 29: Summary income statement
Summary income statement For personal use only $m 1H09 1H08 Var (%) Funds management 20.2 15.7 Development 48.8 27.8 Other1 2.2 14.3 Revenue 71.2 57.8 23% EBITDA (pre inventory write downs) 23.1 22.5 3% Finance costs (1.9) (0.4) Depreciation and amortisation (0.3) (0.3) NPBT 20.9 21.8 (5)% Income ta
Slide 30: Summary balance sheet
Summary balance sheet For personal use only $m 1H09 FY08 Assets Cash 26.9 50.3 Receivables 24.4 36.2 Inventories 461.9 447.0 Investments accounted for using the equity method 29.8 26.2 Other 3.9 4.8 Total assets 546.9 564.5 Liabilities Trade and other payables 20.4 27.6 Land vendor liabilities 75.8
Slide 31: 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 which