Ingenia Communities Group · ASX:INA
Ingenia Communities — H1 2022 Earnings Presentation
44 slides from Ingenia Communities's earnings presentation, Feb 22, 2022
Slide 1: 1H22 Results Presentation
ASX / MEDIA RELEASE 22 February 2022 1H22 Results Presentation Ingenia Communities Group (ASX:INA) provides its 1H22 Results presentation. Authorised for lodgement by the Board. ENDS For further information please contact: Donna Byrne General Manager Investor Relations & Sustainability P 02 8263 050
Slide 2: Half Year Results
22 February 2022 INGENIA LIFESTYLE HERVEY BAY, QLD FY2022 First settlement December 2019, now 146 homes on site HALF YEAR RESULTS
Slide 3: Executing on strategy
Executing on strategy Sector leading position following transformational acquisitions 1H22 Deliver significant scale in key businesses through successful identification and integration of acquisitions ► Total assets increased by 48% on June 21 - more than $500 million of acquisitions, including Seac
Slide 4: Results summary
Results summary Expansion through transformational acquisitions PERFORMANCE HIGHLIGHTS REVENUE STATUTORY PROFIT ‣ Over $500 million acquisitions completed, supported by successful $475 million equity raising - total assets up 48% $131.4m $39.8m ‣ Accelerating growth in lifestyle rental base and deve
Slide 5: Business overview
Business overview COMMUNITIES owned, managed or in development 109 NT (26 added FY22 YTD) RESIDENTS GUESTS QLD >10,300 >1.7m pa WA 29 Calling Ingenia home Staying at an Ingenia 6 Holiday Park SA ASSETS EMPLOYEES NSW >$2.0b >1,200 46 (80% based in Owned/managed regional locations) VIC RENT FUTURE DEV
Slide 6: Increasing scale – over $500 million in acquisitions year to date
Increasing scale – over $500 million in acquisitions year to date Acquisitions dominated by lifestyle communities and markets experiencing demand growth ‣ Dedicated focus on acquisitions has driven significant growth in 26 Communities / Site Acquired FY22 YTD portfolio scale Portfolio of five holida
Slide 7: Seachange acquisition now complete
Seachange acquisition now complete Accelerates lifestyle communities strategy through growth in key Queensland market ‣ Successful integration of Seachange team and communities progressing following settlement in November 2021 ‣ Portfolio adds six communities and development sites • Two mature lifes
Slide 8: Performance and Capital Management
Performance and Capital Management GUESTS AT INGENIA HOLIDAYS SOUTH WEST ROCKS, NSW 7
Slide 9: Key financials
Key financials Result impacted by COVID related losses and equity issuance to fund growth 1H22 1H21 Revenue $131.4m $122.0m 8% ‣ Revenue growth driven by expansion of residential rental base and CPI linked rent increases – offset by COVID impacted holidays revenue loss and delayed home construction
Slide 10: First half EBIT impacted by COVID restrictions
First half EBIT impacted by COVID restrictions Outlook positive – growing momentum into 2H22 EBIT 1H22 1H21 Comparable performance impacted by $5.1 million JobKeeper subsidy in 1H21 Residential Communities ‣ Strong rental growth due to growing inflation-linked rent growth and expanded rental base –
Slide 11: Capital management
Capital management Strong balance sheet with long term funding in place Debt Metrics 31 Dec 21 30 Jun 21 Successful equity raise and increase in debt facilities to fund acquisitions announced 1 November 2021 Loan to value ratio (covenant <55%) 22.1% 22.2% ‣ $475 million rights issue to existing secu
Slide 12: Growth in value across core portfolios
Growth in value across core portfolios Lifestyle cap rates continue to compress supported by recent transactions Av. Cap Rate Av. Cap Rate Dec 212 ‣ Independent valuation of 36 assets in 1H22 (28 assets 2H21) Portfolio Dec 211 Jun 211 Book Value ‣ Investment property impacted by write-off of transac
Slide 13: Operating performance
Operating performance Book Value Lifestyle (by Portfolio at 31 December) communities 54% 15% 37% Portfolio by $1.8 billion book value 39% 9% Portfolio EBIT (at 31 December) 24% 31% $41.2 million 25% 14% 6% Lifestyle Rental Lifestyle Development Ingenia Holidays INGENIA LIFESTYLE LATITUDE ONE, NSW In
Slide 14: Residential communities
Residential communities Over 1H22, rental sites across Ingenia Lifestyle, Ingenia Rental and Ingenia Gardens increased by 24% RESIDENTS AT INGENIA LIFESTYLE LAKESIDE LARA, VIC 13
Slide 15: Ingenia Lifestyle Development
Ingenia Lifestyle Development Home construction delayed by supply chain shortages – unprecedented demand Key Data 1H22 1H21 First half settlements limited by lack of available stock and COVID related delays New home settlements1 139 136 ‣ Record sales FY21 resulted in low inventory levels into 1H22
Slide 16: Expanded development pipeline to capture future demand
Expanded development pipeline to capture future demand Portfolio provides exposure to Queensland and regional/coastal locations ► Total of 6,270 sites across Ingenia and Joint Venture ► Group now has 35 development projects in-market and in planning ► Profile reshaped to increase exposure to markets
Slide 17: Significant construction progress supporting 2H22 settlements
Significant construction progress supporting 2H22 settlements Record number of homes presently being built HOMES 167 Settled YTD HOMES >350 Under construction INGENIA LIFESTYLE CHAMBERS PINES, QLD INGENIA LIFESTYLE LARA, VIC CONTRACTS AND DEPOSITS 507 In place TARGETING 475+ Settlements FY22 INGENIA
Slide 18: Strong tailwinds for demand – some near term supply risks
Strong tailwinds for demand – some near term supply risks Development remains key pathway to portfolio growth Price growth1 Median House Greenfield strategy a key driver of future growth in rental Community Name Suburb LGA (12 mths to Price (’000s) base and creation of sustainable communities Dec 21
Slide 19: Building cost increases and time delays represent key business challenge
Building cost increases and time delays represent key business challenge Margins maintained by rising home prices Development returns remain attractive ► First half above ground per home margin stable ► Home sale prices rising into 2H22, largely offsetting cost growth and retaining Indicative cost i
Slide 20: Ingenia Lifestyle Rental
Ingenia Lifestyle Rental Residential homes providing stable, resilient rental cash flows ‣ Total revenue up 38%, reflecting focus on acquisition, development Key Data 1H22 1H21 and investment in long-term rental homes Total revenue1 $22.5m $16.3m • 1,150 income producing sites added 1H22 EBIT $10.1m
Slide 21: Ingenia Gardens
Ingenia Gardens (seniors rental) Strong, stable, government supported rent Key Data 1H22 1H21 Ongoing high occupancy supporting stable cash flows Total revenue $13.5m $12.9m ‣ Significant majority of residents receive Commonwealth Pension and Rent Assistance EBIT $6.0m $6.3m ‣ Residents attracted to
Slide 22: Holidays
Holidays ECOPODS INGENIA HOLIDAYS BYRON BAY, NSW 21
Slide 23: Ingenia Holidays
Ingenia Holidays Providing diverse locations and revenue streams ‣ Continued expansion – 11 new communities acquired, including two portfolios Key Data 31 Dec 21 31 Dec 20 • Acquisitions added 1,635 income producing holiday sites to the portfolio and 400 annuals Holiday cabins 1,296 893 Caravan and
Slide 24: Ingenia Holidays
Ingenia Holidays Underlying demand for domestic travel remains very strong Key Data 1H22 1H21 Tourism rental income up 13% as acquisitions contributed and demand rebounded from December post COVID restrictions Tourism rental income $27.0m $23.9m ‣ Closure of parks and operating restrictions resulted
Slide 25: Capital Partnerships
Capital Partnerships CLUBHOUSE INGENIA LIFESTYLE FRESHWATER, QLD 24
Slide 26: Development Joint Venture with Sun Communities
Development Joint Venture with Sun Communities (NYSE: SUI) Growing portfolio and returns Increasing activity generating growing returns Key Data 1H22 1H21 ‣ Continued progress at Freshwater - growing sales revenue and development fee streams Ingenia fee income $1.0m $1.7m ‣ 22 homes settled year to
Slide 27: Funds Management
Funds Management Funds business expands asset base and leverages existing Funds Management a key growth platform platform ‣ Targeting launch of new $100+ million fund in 2022 ‣ Nine communities valued at $160 million ‣ Focus on yielding holiday communities ‣ Includes 1,580 income producing sites loc
Slide 28: Sustainability
Sustainability CLUBHOUSE INGENIA LIFESTYLE FRESHWATER, QLD 27
Slide 29: Sustainability
Sustainability ESG initiatives and reporting are a key focus Creating a positive impact Progressing Green Star initiatives ‣ Resident and guest health and well-being at forefront during COVID ‣ Constructing ‘green’ home at Plantations under Green Building Council of ‣ Community and guest engagement
Slide 30: Sustainability
Sustainability New Victorian projects utilising innovation in building methodology INGENIA LIFESTYLE PARKSIDE, VIC ARTIST IMPRESSION – NEW CLUBHOUSE and enhanced focus on sustainability • Clubhouse to achieve “Best Practice” (Built Environment Sustainability Scorecard) • Homes designed to achieve 6-
Slide 31: Strategy and Outlook
Strategy and Outlook Business positioned for the future Key strategy drivers accelerating – ageing population, migration patterns and domestic travel support long term demand SEACHANGE RIVERSIDE COOMERA, QLD 30
Slide 32: Lifestyle communities
Lifestyle communities Surging growth in demand – chronic undersupply An ageing population and low penetration rates create opportunity to increase new home supply ‣ Lifestyle (and lease) communities service a growing demographic ‣ Housing supply remains a key issue for downsizers seeking lifestyle o
Slide 33: Lifestyle strategy leveraged to changing consumer behaviour
Lifestyle strategy leveraged to changing consumer behaviour Migration patterns and price growth supporting demand for Queensland and regional markets Development pipeline positioned to benefit - well located projects and diverse price points ‣ Downsizers have seen the value of their primary asset in
Slide 34: Lifestyle communities
Lifestyle communities Growing demand driving consolidation and price growth Increased deal flow driven by portfolio transactions Total sites 20,000 ‣ Consolidation further concentrated ownership – Ingenia 18,000 an active participant, maintaining a leadership position 16,000 ‣ Portfolio transactions
Slide 35: Positive outlook for holiday parks
Positive outlook for holiday parks Strong demand for domestic travel as overseas markets slow to recover ‣ Consistent with FY21, regional travel experienced a strong rebound as ‣ Long-term fundamentals support continued demand for caravan and camping restrictions eased, with recovery evident from Oc
Slide 36: Outlook
Outlook Transformational acquisitions have enhanced the Group’s exposure to growing demand for seniors housing and domestic travel, supporting the business to capture future growth ‣ Over past six months have increased number of operational sites by 26% to 15,071 sites and size of development pipeli
Slide 37: Appendices
Appendices GUESTS AT INGENIA HOLIDAYS RIVERSHORE, QLD 36
Slide 38: Underlying profit
Appendix 1 Underlying profit 1H22 1H21 ($m) ($m)1 Lifestyle Development 10.0 13.4 Lifestyle Rental 10.1 8.0 Ingenia Gardens 6.0 6.3 Ingenia Holidays 12.7 14.4 Fuel, food & beverage 0.4 0.8 Capital Partnerships 2.0 2.6 Portfolio EBIT 41.2 45.5 Corporate costs (7.3) (5.2) EBIT 33.9 40.3 Share of incom
Slide 39: EBIT and underlying profit by segment
Appendix 2 EBIT and underlying profit by segment Residential Communities Tourism Other Capital Lifestyle Lifestyle Ingenia Ingenia Fuel, Food ($m) Partnerships1 Total Development Rental Gardens Holidays and Beverage and Corporate Rental income - 20.6 12.1 36.5 - - 69.2 Lifestyle home sales 45.3 - -
Slide 40: Cash flow
Appendix 3 Cash flow 1H22 1H21 ($m) ($m) Opening cash at 1 July 18.8 10.8 Rental and other property income 86.7 79.2 Property and other expenses (59.6) (60.3) Proceeds from sale of Lifestyle homes 50.3 53.9 Purchase of Lifestyle home inventory (31.9) (17.3) Net borrowing costs paid (3.9) (2.9) Gover
Slide 41: Consolidated balance sheet
Appendix 4 Consolidated balance sheet 31 Dec 21 30 Jun 21 ($m) ($m) Cash 17.1 18.8 Inventories 20.8 13.6 Investment properties 1,771.3 1,231.3 Investment in Joint Venture 48.5 32.8 Other financial assets 15.5 13.9 Intangibles 105.1 8.5 Other assets 29.5 35.5 Total assets 2,007.8 1,354.4 Borrowings a
Slide 42: Capitalisation rates have progressively tightened
Appendix 5 Capitalisation rates have progressively tightened Rentals and Holiday Communities 11.50% 10.50% Murray River,NSW Albury,NSW 9.50% Implied cap rate % Grange,Jun16 Capricorn Palms,QLD 8.50% Green Wattle,QLD 7.50% Rivershore,QLD Newport,NSW Sundown,ACT Lake Munmorah,NSW Middle Rock,NSW 6.50%
Slide 43: Contact Us
Contact Us Scott Noble Chief Financial Officer Tel: +61 2 8263 0538 snoble@ingeniacommunities.com.au Donna Byrne General Manager Investor Relations & Sustainability Tel: +61 2 8263 0507 dbyrne@ingeniacommunities.com.au Ingenia Communities Group Level 3, 88 Cumberland Street Sydney NSW 2000 www.ingen
Slide 44: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) The forward looking statements included in this presentation involve subjective judgment and and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia analysis and are sub
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