Lifestyle Communities Ltd · ASX:LIC
Lifestyle Communities — FY2018 Earnings Presentation
37 slides from Lifestyle Communities's earnings presentation, Aug 15, 2018
Slide 1: Results Presentation Year ended 30 June 2018
Business for Purpose For personal use only Results Presentation Year ended 30 June 2018 15 August 2018 LIFESTYLE COMMUNITIES LIMITED A BUSINESS MAKING A DIFFERENCE 1
Slide 2: Contents
Contents Appendix For personal use only 1. Overview 3 A.1 Sales and settlements 29 2. Financial & operational results 10 A.2 Deferred management fee 30 3. Outlook 17 A.3 Investment property analysis 31 4. Business model 21 A.4 Cash flow analysis 33 5. Summary 26 A.5 Fair value breakdown 35 This docu
Slide 3: Our Story
Our Story For personal use only 2003 James Kelly, Dael Perlov “Lifestyle Communities and Bruce Carter develop redefines the way Australians business plan can downsize in a resort-style community, while still having 2004 all the benefits of owning Development of first community at Brookfield - your h
Slide 4: A Business for Purpose
A Business for Purpose For personal use only An affordable housing option for the 50% of Australians aged over 50 who have less than $550,000 in total equity An affordable and sustainable financial model where homeowners can prosper An empowering and engaging customer service strategy High quality r
Slide 5: Community Overview
Community Overview How does the Lifestyle Communities model of living work? For personal use only Homeowners at Lifestyle Communities own their own home and lease the land upon which their Homeowners at homes are located, via a weekly site fee. Lifestyle Communities are protected by the Residential
Slide 6: Financial Summary FY2018 results snapshot
Financial Summary FY2018 FY2017 Overview Net profit after tax attributable to shareholders ($ Million) $52.7 ($ Million) $27.7 FY2018 results snapshot Underlying net profit after tax attributable to shareholders $33.8 $25.0 Total assets $358.2 $266.1 For personal use only Equity $204.6 $155.5 Divide
Slide 7: Overview: FY2018 Highlights
Overview A repeatable business model structured for sustainable growth FY2018 Highlights For personal use only Home sites (annuities) under management (1) • 344 new homes sold and 321 settled 2200 • 1,947(1) occupied home sites • 2,859 homeowners 2000 1,947 • Portfolio of 2,995(2) homes and home sit
Slide 8: Portfolio snapshot 30 June 2018
Overview Lifestyle Communities’ Portfolio snapshot portfolio continues to grow organically 30 June 2018 For personal use only Homes occupied or sold Total homes in Homes sold & Homes sold & and awaiting settlement Communities communities occupied awaiting settlement # % Existing Communities – Sold o
Slide 9: Portfolio Overview
Portfolio Overview 16 communities in planning, development or under management For personal use only Focus remains in Victoria • Favourable planning legislation Community Homes Settled • Better access to zoned, flat land for development • Low saturation of land lease communities Brookfield at Melton
Slide 10: Financial & operational results
Section 2 For personal use only Financial & operational results 10
Slide 11: FY2018 Sales and Settlements
2.1 FY 2018 Sales and Settlements Sales Commitments For personal use only • Shepparton and Geelong continued to perform well achieving 41 and 37 net sales respectively. Geelong has only 4 display homes left to sell • Berwick Waters is 97% sold out with 72 homes awaiting settlement • Bittern sold 116
Slide 12: Sales rates
2.2 Sales rates For personal use only • Lifestyle Communities has continued to evolve Sales profile from date of first sale our pre-sales process. This reduces risk by Sales supporting a more aggressive construction Bittern Berwick Waters program to enable faster capital recycling Chelsea Heights Of
Slide 13: Financial results
2.3 Financial results For personal use only There are two components to Annuity Income Site Rental Fees (gross) Deferred Management Fee (cash) the annuity stream: $22,000,000 1. Site Rental Fee $20,000,000 - $179 per single and $207 per couple $18,000,000 per week per home $16,000,000 - Indexed at g
Slide 14: Income statement
2.4 Income statement For personal use only • Net profit attributable to shareholders up 90% to $52.7 million FY2018 FY2017 % Income statement (on an underlying basis up 35% to $33.8 million after adjusting for ($’000) ($’000) Movement favourable investment property valuations) Home settlement revenu
Slide 15: Balance sheet
2.5 Balance sheet FY2018 FY2017 % Balance sheet highlights ($’000) ($’000) Movement For personal use only Cash and cash on deposit 8,585 3,653 • The gearing ratio(1) has decreased to 13.3% at year Inventories 39,439 44,933 end due to the timing of settlements for land at Investment properties 303,57
Slide 16: Continued strong operational cashflows
2.6 Continued strong operational cashflows Cash flow in line with development activity For personal use only • Cash flows from operations increased to $20.6 million • Receipts from customers increased by $27.0 million to $134.8 million due to increased home settlements and FY2018 FY2017 Cash Flow hi
Slide 17: Outlook
For personal use only Outlook Section 3 17
Slide 18: Settlement goals - new sales
3.1 Settlement goals - new sales Settlements of 630-695 For personal use only • Settlements in FY2019 expected to be in the range of 310 to 350 settlements expected to be delivered • Underlying NPAT and dividends in FY2019 are expected to increase over the next two years • Expect to see increasing l
Slide 19: Likely home settlement program
3.2 Likely home settlement program For personal use only Community FY19 FY20 FY21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Shepparton Geelong Berwick Waters Bittern Ocean Grove Mount Duneed Kaduna Park(1) Wollert North(1) Represents tail of development which is often a slower settlement rate Notes: (1) S
Slide 20: Dividend policy
3.3 Dividend policy For personal use only As a general principle, the Board of 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) • Apportionm
Slide 21: Business model
Section 4 For personal use only Business model 21
Slide 22: Key themes
4.1 Key themes Two key emerging trends come together to For personal use only create the Lifestyle Communities business model Affordability Baby Boomers • Want to maintain control • Opportunity to create more affordable housing • Want to own their home • Site rental sustainable for • Want to free up
Slide 23: Acquisition strategy
4.2 Acquisition strategy For personal use only Focused on Melbourne and Geelong’s growth corridors • Targeting zoned land in Melbourne and Geelong’s growth corridors • Increasing opportunities to buy superlots from land developers Hume • Melbourne has the strategic benefit of flat topography which i
Slide 24: Recent land acquisitions
4.3 Recent land acquisitions For personal use only Lifestyle Ocean Grove • Construction commenced in the second quarter of the 2018 financial year • Additional 1.3ha purchased in April 2018 • The expansion will include an Aqua Club and outdoor pool, along with an additional 27 homes, bringing the to
Slide 25: Community evolution
4.4 Community evolution For personal use only • Community layouts and designs have continued to evolve with the changing needs of the baby boomers • Home sizes are increasing and we are now building 3 bedroom homes • Wellness programme has become more valued and community design is evolving to incor
Slide 26: Summary
For personal use only Summary Section 5 26
Slide 27: Summary
5.1 Summary For personal use only • FY2018 delivered 321 settlements • The recently announced Mount Duneed, Kaduna Park and Wollert North acquisitions, as well as the Shepparton and Ocean Grove expansion has increased the total portfolio to 2,995 homes(1) • Annuity income from site rental fees grew
Slide 28: Appendix
For personal use only Appendix 28
Slide 29: Sales and settlements
A.1 Sales and settlements For personal use only New home New homes Resale home settlements settlements Mature Communities FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 Brookfield at Melton - - - - 15 12 Seasons at Tarneit - - - - 4 3 Warragul - - - - 14 16 Casey Fields at Cranbourne (1) - - - - 11 12 Ch
Slide 30: Deferred management fees
A.2 Deferred management fees For personal use only Casey Chelsea Brookfield Seasons Warragul Shepparton Hastings Lyndarum Officer Total Fields Heights Historical resales(1) 113 24 52 35 11 25 24 1 4 289 Average tenure (years) 5.9 5.1 4.3 3.4 3.1 2.7 2.5 2.5 1.7 4.5 Average price growth p.a. 4.9% 3.4
Slide 31: Investment property analysis
A.3.1 Investment property analysis Community Valuation Summary For personal use only Investment properties per 30 June 2018 financials 30 June 2018 Total Homes Investment properties At fair value Homes Occupied at cost (1) ($m) ($m) Mature Communities Brookfield at Melton 228 228 6.76 31.85 Seasons
Slide 32: Community Valuation Summary (On Completion)
A.3.2 Investment property analysis For personal use only Community Valuation Summary (On Completion) Rental Metrics DMF metrics (extracts from valuations) Last Rental cap. Net rental per home Average DMF discount DMF terminal valuation rate(1) (from valuation sale value rate cap. rate date adjusted)
Slide 33: Cash flow analysis FY2018
A.4.1 Cash flow analysis FY2018 For personal use only Supplementary Cash Flow Casey Chelsea Berwick Ocean Mount Kaduna Wollert Brookfield Seasons Warragul Shepparton Hastings Lyndarum Geelong Officer Bittern Total Analysis for FY2018 Fields(3) Heights(3) Waters Grove Duneed Park North Total Number o
Slide 34: Cash flow analysis FY2017
A.4.2 Cash flow analysis FY2017 For personal use only Supplementary Cash Flow Casey Chelsea Berwick Ocean Mount Brookfield Seasons Warragul Shepparton Hastings Lyndarum Geelong Officer Bittern Total Analysis for FY2017 Fields(3) Heights(3) Waters Grove Duneed Total Number of Homes 228 136 182 217 30
Slide 35: Reconciliation of carrying values
A.5 Reconciliation of carrying values Fair value breakdown from FY2017 to FY2018 Investment Properties Carrying Value at 30 June 2017 211,294,274 At Lifestyle Communities our homeowners purchase a proportionate share of the clubhouse, pool, recreational Land Acquisitions & Accruals for Contracted La
Slide 36: Important notice and disclaimer
Important notice • This Presentation contains general reliance on anything contained in or omitted looking statements. Such statements are background information about Lifestyle from this presentation. subject to significant assumptions, risks and and disclaimer For personal use only Communities Lim
Slide 37: Lifestyle Communities Limited contact details
For personal use only LIFESTYLE COMMUNITIES LIMITED Level 2, 25 Ross Street South Melbourne VIC 3205 Ph: (03) 9682 2249 www.lifestylecommunities.com.au LIFESTYLE COMMUNITIES LIMITED A BUSINESS MAKING A DIFFERENCE 37