Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2022 Earnings Presentation
44 slides from Lifestyle Communities's earnings presentation, Aug 17, 2022
Slide 1: A Business for Purpose
A Business for Purpose Results Presentation for the year ended 30 June 2022 Artist impression of Woodlea Clubhouse
Slide 2: Contents
Contents Appendix Our story and purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i A.1 Model of living. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 A business for purpose. . . . . . . . . . . . . . . . . . . . . . . . .
Slide 3: Our story and purpose
Our story and purpose We’re champions for facilitating a We build communities because our homeowners have But, most of all, we champion bigger, more enhanced worked hard for what they have, and they deserve lives for our homeowners because we know that bigger life for our homeowners. A beautifully d
Slide 4: A business for purpose
A business for purpose An affordable housing An empowering and option for Australians engaging customer aged over 50. service offering that reimagines traditional retirement. A sustainable financial model where homeowners can prosper. High quality resort-style A sales approach that facilities that e
Slide 5: Macro themes provide resilience through the cycle
Macro themes provide resilience through the cycle Baby Boomers and First Home Buyers driven to action regardless of the cycle Lifestyle Communities provides a credible option even in falling market • Downsizing releases equity to improve living Ageing Population First Home Buyers standards in retire
Slide 6: Overview
Artist impression of Clubhouse at Lifestyle Meridian Overview Lifestyle Communities— End of financial year results presentation — June 2022 1
Slide 7: FY22 results snapshot
FY22 results snapshot Overview Financial summary Growing annuity income streams ($m) FY22 FY21 Site rental fees Deferred management fees Net profit after tax attributable to shareholders 88.9 91.1 $45 Underlying profit after tax1 61.4 36.4 $40 Total assets 1,006.2 781.3 $35 $10.9m Equity 453.5 378.1
Slide 8: FY22 highlights
FY22 highlights Overview • Opened new clubhouse at St Leonards • Welcomed first homeowners at Lifestyle Meridian • Sold out communities at Mount Duneed and Kaduna Park • 418 new home sales and 401 new home settlements in a year affected by lockdowns • 156 resale settlements of which 143 attracted a
Slide 9: Portfolio snapshot FY22
Portfolio Overview snapshot FY22 Homes occupied or sold and awaiting settlement Total homes Homes sold Homes sold and Communities in communities and occupied awaiting settlement No. % Existing Communities - Sold out Brookfield at Melton 228 228 228 100% Seasons at Tarneit 136 136 136 100% Warragul 1
Slide 10: Portfolio overview and land acquisition strategy
Portfolio overview and land Overview acquisition strategy 26 Communities in planning, development or under management. Lifestyle Communities undertakes a detailed Shepparton vetting of each potential site, and prioritises acquisitions based on the following criteria: Focus remains on Melbourne and G
Slide 11: ESG update
ESG update Overview Affordable housing Our mission is to enable working, Environmental Social Governance semi-retired and retired people over 50 to live an independent life • Carbon target introduced – Net Zero • Delivered 401 new affordable homes • Conducted 2 voice of the customer at an affordable
Slide 12: Greenhouse gas emissions inventory
Greenhouse gas Overview emissions inventory Lifestyle Communities commits to Pathway to net zero emissions achieve net zero operational carbon emissions for scope 1, 2 and 3 by no later than 2035. Define CO2 footprint The plan to achieve this is outlined in Embed energy efficiency in new development
Slide 13: Greenhouse gas emissions inventory
Greenhouse gas Overview emissions inventory Calendar year Change vs. Average greenhouse gas emissions of a (Tonnes of carbon) 2021 2020 2019 baseline Lifestyle house compared to a typical home Scope 1 (direct emissions) 599 432 400 49.8% in Melbourne’s out suburbs. Scope 2 (Lifestyle electricity) 1,
Slide 14: Operations update
Lifestyle Berwick Waters Operations update Lifestyle Communities— End of financial year results presentation — June 2022 9
Slide 15: Sales and settlements
Sales and settlements Operations update No. of • 418 new home sales Community homes Sold % sold Settled % settled • Kaduna Park and Mount Duneed sold out Mount Duneed 191 191 100% 184 96% during the year Kaduna Park 169 169 100% 167 99% • Site 1 at St Leonards is sold out. Site 2 is Wollert North 24
Slide 16: Sales rates
Sales rates Operations update • Lockdowns slowed momentum early in the Sales profile from date of first sale year but customers doing their research were more informed when we met them after 250 lockdowns ended • St Leonards and Meridian both benefiting from Mt Duneed (Aug-18) quality location and n
Slide 17: Thanking our referrers
Thanking our referrers Operations update • Circa 50% of our new home sales and over 60% of our resales come via referral from an existing homeowner • In July 2022 we hosted an event for our top referrers to say thank you for placing their trust in us • Hosted at the Regent Theatre our top referrers
Slide 18: Developments in progress
Developments in progress Operations update Building program over 50% complete. Building program over 50% complete. First site sold out. Second site planned for sales launch in second half of FY23. First homeowners settled in May 2022. Construction commenced in July 2022. Sales Purchased with partial
Slide 19: Digital transformation update
Digital transformation Operations update update • New Website – Redesign completed and live in September 2021. Continuing to evolve and improve • SAP Business by Design and SAP Concur – Finance Systems – Systems went live on 1 January 2022. Continuing to adapt business processes and unlock productiv
Slide 20: Salesforce implementation
Salesforce implementation Operations update Setting the foundation for future growth. Sales Funnel 1 Sales Funnel 2 FY23 Direct marketing Homeowner experience Marketing Sales Service Home owner portal Further enhancements • Digital marketing • Contact management • Support customer • News feed for ho
Slide 21: Financial results
Artist impression of new house design at Lifestyle Meridian Financial results Lifestyle Communities— End of financial year results presentation — June 2022 16
Slide 22: Financial results
Financial results Financial results There are two components to the Home sites under management annuity stream: 3,500 3,193 2 Site Rental Fee 3,000 • $199 per single and $230 per couple, per 2,792 week, per home 2,537 2,500 • Indexed at greater of CPI or 3.5% p.a. 2,284 • Gross rental income for FY2
Slide 23: Income statement
Income statement Financial results FY22 FY21 • Underlying profit after tax rose 69% to $61.4 million for the 2022 Income statement ($000) ($000) Movement (%) financial year, while valuation gains lifted statutory profit after tax Home Settlement Revenue 180,291 102,716 75.5% to $88.9 million Cost of
Slide 24: Balance sheet
Balance sheet Financial results FY22 FY21 • The inventory balance includes: Balance sheet highlights ($000) ($000) Movement (%) Cash and Cash on Deposit 1,893 2,300 (17.7%) – $49.3m for display homes and houses in progress Inventories 135,679 125,243 8.3% – $86.4m for Civil and Infrastructure works
Slide 25: Cash flow
Cash flow Financial results FY22 FY21 • Receipts from customers increased due to: Cash flow highlights ($000) ($000) Receipts from customers 243,346 149,101 – higher number of new home settlements Payments to suppliers and employees (187,306) (172,218) – increased annuity revenue due to a higher num
Slide 26: Debt covenants and key metrics
Debt covenants and Financial results key metrics Lifestyle has three main debt and lending covenants which are regularly stress tested. They are: • In August 2021 the Company agreed terms with its lending group, The Commonwealth Bank of Australia, National Secured property % Australia Bank and HSBC
Slide 27: Outlook
Sunset over Lifestyle Bittern Outlook Lifestyle Communities— End of financial year results presentation — June 2022 22
Slide 28: New project launches in FY23
New project Outlook launches in FY23 Settlement Profile of Communities in Development • Finished the year with 3,193 settled homes under management across 19 operating communities. FY23 FY24 FY25 • Increased total portfolio of completed homes, homes under Community Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 29: Outlook
Outlook Outlook Lifestyle Chelsea Heights • Lifestyle Communities has a focused strategy to service a niche — providing high quality affordable housing to downsizers in Victoria • Currently funded and resourced to acquire three new sites per year, subject to identification of appropriate sites • Foc
Slide 30: Summary
Lifestyle Deanside Clubhouse Summary Lifestyle Communities— End of financial year results presentation — June 2022 25
Slide 31: Summary
Summary Summary • Welcomed first homeowners at Meridian and opened the clubhouse at St Leonards • FY22 delivered 401 new home settlements and 143 resale settlements that attracted a DMF • Acquisitions at Phillip Island, Ocean Grove, Merrifield and Bellarine has increased the total portfolio to 5,391
Slide 32: Appendix
Lifestyle Mt Duneed Appendix Lifestyle Communities— End of financial year results presentation — June 2022 27
Slide 33: A.1 Model of living
A.1 Model of living Appendix How does the Lifestyle Communities’ model of living work? Homeowners at Lifestyle Communities own their own home and lease the land upon which their homes are located, via a weekly site fee and a deferred management fee. Homes typically priced at 75-80% of the 75-80% med
Slide 34: A.2 Growing recurring revenue stream
A.2 Growing recurring Appendix revenue stream Lifestyle Communities’ business has two core elements 1. Creating communities 2. Managing communities A mix of equity and debt capital is used to develop greenfield Completed communities generate recurring revenue streams which are sites to create new co
Slide 35: A.3 Dividend policy
A.3 Dividend policy Appendix Time to relax at Lifestyle Officer As a general principle, Lifestyle Communities intends to pay dividends out of post-tax operating cashflow generated from community management including: • Operating cash flow generated from community management (net rental and DMF) • Ap
Slide 36: A.4 Sales and settlements
A.4 Sales and settlements Appendix New home settlements Net sales Resale home settlements FY22 FY21 FY22 FY21 FY22 FY21 Existing Communities - Sold out Brookfield at Melton 19 13 Seasons at Tarneit 20 8 Warragul 7 5 Casey Fields at Cranbourne 1 15 12 Shepparton 8 17 17 Chelsea Heights 1 22 7 Hasting
Slide 37: A.5 Investment Property Analysis
A.5 Investment Property Analysis Appendix Last Cap rate (%) DMF discount rate (%) Net rental per home Valuation ($m) independent Valuation summary valuation date FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Land cost Brookfield Jun-22 5.25% 5.60% 12.0% 14.3% 7,881 7,847 45.7 43.1 6.8 Seasons Jun-22 5.25%
Slide 38: A.6 Deferred management fees
A.6 Deferred management fees Appendix Casey Chelsea Berwick Ocean Kaduna Brookfield Seasons Warragul Fields Shepparton Heights Hastings Lyndarum Officer Geelong Waters Bittern Grove Park Total Historical resales 168 50 78 79 55 60 53 21 24 21 18 27 15 1 670 Average tenure (years) 7.4 6.8 5.2 5.4 4.7
Slide 39: A.7 Fair value breakdown
A.7 Fair value breakdown Appendix At Lifestyle Communities our homeowners purchase a proportionate Investment properties breakdown share of the clubhouse, pool, recreational facilities, and all associated infrastructure when they purchase their home. 900 This helps us build a sense of community, sha
Slide 40: A.8 Fair value breakdown
A.8 Fair value breakdown Appendix Reconciliation of Movement in Carrying Value of Indicative example (per house) Cash flow P&L Investment Properties Sale Price (Incl. GST) 532,400 Investment properties carrying value at 30 June 2021 636,454 Sale Price (Excl. GST) 484,000 484,000 Land Acquisitions an
Slide 41: A.9 Cash flow analysis FY22
A.9 Cash flow analysis FY22 Appendix Fully settled Future communities 3 Mount Duneed Kaduna Park Wollert North Deanside St Leonards Meridian Woodlea Communities4 Total Total Number of Homes 2,504 191 169 246 266 359 274 180 1,202 5,391 Settled FY22 1 72 57 69 64 109 29 – – 401 Remaining homes and lo
Slide 42: A.10 Cash flow analysis FY21
A.10 Cash flow analysis —FY21 Appendix Fully settled Ocean Mount Kaduna Wollert Meridian at Future communities3 Grove Duneed Park North Deanside St Leonards Clyde North Communities4 Total Total Number of Homes 2,284 220 191 169 246 266 359 274 825 4,834 Settled FY21 8 34 55 91 36 24 7 – – 255 Remain
Slide 43: A.11 Reconciliation to underlying profit
A.11 Reconciliation to Appendix underlying profit • Underlying profit adjusts for the Units FY18 FY19 FY20 FY21 FY22 impact of changes in property Fair value uplift (pre-tax) valuations attributable to changes New Home Settlements No. of Homes 321 337 253 255 401 in valuation assumptions due Uplift
Slide 44: Important notice and disclaimer
Important notice and disclaimer This Presentation contains general background information about Lifestyle Communities Limited (LIC) and its activities current at 17 August 2022 unless otherwise stated. It is information in a summary form and does not purport to be complete. It should be read in conj