Ingenia Communities Group · ASX:INA
Ingenia Communities — FY2024 Earnings Presentation
47 slides from Ingenia Communities's earnings presentation, Aug 20, 2024
Slide 1: FY24 Results Presentation
ASX / MEDIA RELEASE 20 August 2024 FY24 Results Presentation Ingenia Communities Group (ASX:INA) provides its FY24 Results presentation. Authorised for lodgement by the Board. ENDS For further information please contact: Donna Byrne General Manager Investor Relations & Sustainability P 02 8263 0507
Slide 2: Results Presentation FY24
RESULTS PRESENTATION FY24 20 AUGUST 2024 Image: Artist impression community clubhouse – Ingenia Lifestyle Archers Run, NSW
Slide 3: Acknowledgement of country
Acknowledgement of country As an owner, operator and developer of real estate across Australia, Ingenia Communities acknowledges the traditional custodians of the lands on which we operate We recognise their ongoing connection to land, waters and community, and pay our respects to First Nations Elde
Slide 4: Agenda
Agenda Residential Communities Overview FY24 Financial Lifestyle Lifestyle, Rental Holidays Growth Focus Outlook and Performance Development and Gardens Guidance John Carfi Justin Mitchell John Carfi Justin Blumfield Matthew Young John Carfi John Carfi CEO & Chief CEO & EGM EGM CEO & CEO & Managing
Slide 5: Overview
Overview • New CEO commenced April 2024 – focus on value realisation via development and execution • Business simplification • Delivery of operating efficiencies • Overhead reduction • Accelerate development delivery and improve returns • FY24 result exceeded guidance, reflecting focus on execution
Slide 6: Financial performance & capital management
Financial performance & capital management Image: Ingenia Lifestyle Hervey Bay, QLD PAGE 5
Slide 7: Business overview
Image: New clubhouse SOD turning event at Ingenia Lifestyle Sanctuary, QLD Business overview1 Solid foundation for growth INVESTMENT PROPERTY COMMUNITIES AND SITES DEVELOPMENT2 OPERATIONS ‘ROOM NIGHTS’ $2.5b 102 5,311 15,930 ~1.8m Pipeline new land lease Income generating homes, Owned/managed home s
Slide 8: Key financial highlights
Key financial highlights Lifestyle and holidays businesses delivering growth; material increase in home settlements REVENUE EBIT UNDERLYING PROFIT STATUTORY PROFIT PERFORMANCE $472.3m $125.7m $94.8m $14.0m + 19.7% on FY23 + 17.0% on FY23 + 14.0% on FY23 (78.2%) on FY23 DPS UNDERLYING EPS NTA LVR 11.
Slide 9: EBIT up 17%
EBIT up 17% • Lifestyle Rental benefitted from CPI linked rental increases, market rent reviews and EBIT1 FY24 FY23 Change Margin growth in rent base as developments and site densification added new homes Residential Communities • Lifestyle Development experienced increased average sales price and g
Slide 10: Capital management
Capital management Well positioned balance sheet Debt Metrics 30 Jun 24 30 Jun 23 LVR within target (30-40%) Loan to value ratio (covenant <55%) 32.3% 31.4% • $201.9 million in cash and available undrawn debt Gearing ratio1 27.8% 25.3% • No debt expiring till December 2025, with $100 million extende
Slide 11: Portfolio valuation summary
Portfolio valuation summary Weighted Av. Weighted Av. • Independent valuation of 43 assets 2H24 representing 48% of total portfolio by Jun 242 Net value (45 assets 1H24) Portfolio Cap Rate Cap Rate Book Value revaluation3 Jun 241 Jun 231 • CPI linked rent increases provided value support in the Life
Slide 12: Portfolio Overview
Portfolio Overview1 Growing land lease business Property Portfolio Portfolio EBIT6 Living Sectors by value5 Land Lease Rental Annual Cabins Sites homes Homes sites Lifestyle Rental 18% Residential Ingenia Lifestyle3,4 4,862 28 3 - - 37% 33% 34% Ingenia Rental (All age) 330 1,419 8 79 93 $2.5b $173m
Slide 13: Residential communities
Residential communities Image: Artist impression – Clubhouse for Lot 25, Ingenia Lifestyle Latitude One, NSW PAGE 12
Slide 14: Residential Communities
Residential Communities Increasing exposure to land lease communities • Ingenia Lifestyle, Ingenia Rental and Ingenia Gardens delivering core recurring rental • Build out of development sites is key driver of future rental income and increased revenue Joint Venture management fees • Cash flows suppo
Slide 15: Land Lease (Lifestyle) Development
Land Lease (Lifestyle) Development Land lease development is core focus for growth Key Data FY24 FY23 EBIT of $59.2 million, up 40% on FY23 New home settlements (100% INA) 370 318 Future Focus • Total of 462 home settlements FY24 (370 Ingenia) • Deliver targeted returns New home settlements (Sun/Fun
Slide 16: Ingenia Lifestyle Development
Ingenia Lifestyle Development Creating future communities and growing high quality rent base Growth in construction aligned to increased sales momentum • Stable build times providing certainty on completion • Integrated sales and marketing function supporting demand led construction growth Continuin
Slide 17: Development activity supporting sales momentum
Development activity supporting sales momentum Delivering growth in settlements Building diverse portfolio of projects in line with risk adjusted return target • Projects in sixteen markets across three states • 2 projects moving from early stage construction to settlements FY25 • Seven communities
Slide 18: Extensive pipeline of 5,311 development sites
Extensive pipeline of 5,311 development sites Exposure to diverse markets and price points Diverse pipeline of projects with location and price diversity • Prices for current projects from $345,000 to >$1 million • 4 projects to commence FY25 – construction FY25/26 • Development approval received fo
Slide 19: Development Joint Venture
Development Joint Venture Growing settlements FY25 – four projects 88 $741k 227 producing settlements HOME AVERAGE HOME HOMES SETTLEMENTS SALE PRICE2 GENERATING Accelerating development activity – four projects under development FY24 RENT • Freshwater (Burpengary, QLD) • Natura (Bobs Farm, NSW) deli
Slide 20: Lifestyle Rental (land lease and all age rental)
Lifestyle Rental (land lease and all age rental) Delivering growth in annuity cash flows Key Data Total revenue FY24 $86.5m FY23 $76.8m >12% REVENUE EBIT $45.3m $39.8m INCREASE EBIT margin 52.3% 51.8% EBIT margin (stabilised)1 53.8% 52.9% Book value – in operation 30 Jun 24 $956.1m 30 Jun 23 $868.4m
Slide 21: Ingenia Lifestyle (land lease)
Ingenia Lifestyle (land lease) Rent base growing Significant growth in rental revenues Proactively responding to changing regulatory landscape • 365 new home settlements FY24 adding $3.9 million revenue per annum • Recent NSW & QLD government reviews have led to changes • Weighted average weekly ren
Slide 22: Ingenia Rental (all age rental)
Ingenia Rental (all age rental) All age ‘built to rent’ experiencing strong demand High occupancy maintained Low vacancy rates, limited new supply and migration driving demand for • Weighted average weekly rent increase 9% affordable rental homes • Addition of 54 new rental homes – attracting higher
Slide 23: Ingenia Gardens
1,020 95.9% $383 HOMES OCCUPANCY AVE. WEEKLY Ingenia Gardens RENT High occupancy maintained Ongoing high occupancy delivering quality, stable cash flows Key Data1 FY24 FY23 • Residents attracted to supported environment and social interaction Future focus Total revenue $23.7m $27.4m • EBIT margin ma
Slide 24: Ingenia Holidays
Ingenia Holidays 38 2,048 4,635 1,405 PARKS WITH ‘ANNUAL’ SITES PERMANENT >8,000 INCOME TOURISM GENERATING HOMES (RENTAL GENERATING CABINS AND STABLE RENTS AND LAND SITES1 SITES LEASE) 1. Includes five holiday parks owned by Ingenia managed funds. Ingenia has an interest in each fund. Image: Ingenia
Slide 25: Ingenia Holidays
Ingenia Holidays Continued growth FY24 Key Data FY24 FY23 Tourism rental income up 8% with increase in both occupancy and rate Future focus Tourism rental income $105.1m $97.3m • Maintain high customer satisfaction • EBIT up 4.6% to $56.9 million Residential rental income $11.6m $11.2m • Benefit of
Slide 26: Ingenia Holidays growth focus
Ingenia Holidays New cabins at Asset management strategies to deliver Soldiers Point installed April 2024 growing revenue streams - on track to exceed 15% yield on investment Customer insights and affordability of domestic holidays support demand • Domestic travel forecast to continue to grow1 • Ret
Slide 27: Growth Focus
Growth Focus Accelerate transition from an aggregator of land and assets to operationally efficient developer and operator to unlock value and build scale Image: Display homes open day at Ingenia Lifestyle Drift, QLD PAGE 26
Slide 28: Strong foundation for delivery of enhanced performance through growth
Strong foundation for delivery of enhanced performance through growth The Group has pivoted to focus on execution and acceleration of growth via a disciplined and more efficient delivery model to unlock value and build scale TRANSITION FROM AN AGGREGATOR OF LAND AND ASSETS TO OPERATIONALLY EFFICIENT
Slide 29: Actions to date
Actions to date Focus on execution and refinement of financial and strategic goals Management and • New CEO (April 2024) and CFO (July 2023) with strong pedigrees in development and financial discipline structure • Reduced corporate headcount and streamlined executive – contributing to $6 million pa
Slide 30: Our focus to drive performance
Our focus to drive performance Strategic levers for growth BUILD CAPACITY IN SIMPLIFY BUSINESS DEVELOPMENT GROWTH ENGINE DRIVE OPERATIONAL EFFICIENCY • Streamline executive and business • Deliver pipeline of current projects, • Reduce cost base and refine structure to drive accountability accelerati
Slide 31: Roadmap for enhanced returns
Our focus to drive performance Roadmap for enhanced returns REFOCUS BUSINESS OPTIMISE RETURNS EFFICIENT PLATFORM OF SCALE Year 1 Year 3 Year 5 Complete transition from acquirer to operator Enhanced returns through development Scale efficiency; operating efficiencies delivery of target returns • Simp
Slide 32: Target portfolio structure and returns
Target portfolio structure and returns DEVELOPMENT RECURRING REVENUE EBIT contribution 50-60% EBIT contribution 40-50% GROW OPTIMISE RETURNS MAXIMISE VALUE LAND LEASE PORTFOLIO and ENHANCE RESIDENTIAL RENTAL HOLIDAYS DEVELOPMENT RETURNS CAPITAL AND • Priority for growth capital deployment • Select i
Slide 33: Outlook and Guidance
Outlook and Guidance Image: Artist impression – clubhouse Ingenia Lifestyle Element, NSW PAGE 32
Slide 34: Outlook and Guidance
Outlook and Guidance Business primed for growth FY25 FY25 guidance reflects focus on execution and development growth with reference to the following key factors Guidance1 • Timing of settlements (2H25 vs 1H26) remains key variable Targeting underlying EPS of 24.4 cents to • Increasing portion of se
Slide 35: Questions
Questions John Carfi Justin Mitchell Donna Byrne Justin Blumfield Matthew Young Kristy Minter Michael Rabey CEO & Managing Chief Financial Officer GM Investor Relations EGM Residential EGM Tourism GM People & Culture Acting EGM Director & Sustainability Development Image: Ingenia Holidays Cairns Coc
Slide 36: Appendices
Appendices Image: Ingenia Holidays Cape Paterson, VIC PAGE 35
Slide 37: EBIT by segment and underlying profit
Appendix 1 EBIT by segment and underlying profit Residential Communities Tourism Other Capital Lifestyle Lifestyle Ingenia Ingenia Fuel, Food ($m) Partnerships1 and Total Development Rental Gardens Holidays and Beverage Corporate2 Rental income - 68.3 21.6 11.6 - - 101.6 Tourism and annuals rental i
Slide 38: Restatement of FY23 segment results
Appendix 2 Restatement of FY23 segment results Lifestyle Lifestyle Ingenia Holidays & Fuel, Food & Corporate & $m Development Rental Gardens Mixed Use Beverage Other Segment EBIT restated External segment revenue 141.3 76.8 27.4 126.4 19.3 3.3 Corporate and Other includes: Cost of manufactured homes
Slide 39: Cash flow
Appendix 3 Cash flow FY24 FY23 ($m) ($m) Opening cash at 1 July 45.7 14.5 Rental and other property income 268.5 259.2 • Increase in operating costs in Lifestyle Rental and Holidays; and cost increases in Lifestyle Property and other expenses (219.8) (189.6) Development to support new projects Proce
Slide 40: Consolidated balance sheet
Appendix 4 Consolidated balance sheet 30 Jun 24 30 Jun 23 ($m) ($m) Cash 14.5 45.7 • FY24 growth in inventory balance as additional projects commence home Inventories 86.5 54.1 construction and development activity accelerates to meet future demand • Investment property value reflects capital expend
Slide 41: Key drivers of segment EBIT margin
Appendix 5 Key drivers of segment EBIT margin LIFESTYLE RENTAL INGENIA GARDENS INGENIA HOLIDAYS DEVELOPMENT 52.3% 51.8% 49.1% 48.6% 42.2% 43.1% 28.7% 29.9% FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 EBIT Margin EBIT Margin EBIT Margin EBIT Margin EBIT Margin EBIT Margin EBIT Margin EBIT Margin KEY DRIV
Slide 42: FY24 Select Initiatives
Appendix 6 Progressing sustainability initiatives aligned to strategy, vision and values Disclosures Environment Extended disclosures in 2024 Continued solar installations in Progressed construction at Fullerton Cove Sustainability Report in alignment with new developments and rolled NSW, Bargara QL
Slide 43: Land lease investment property fair value drivers
Appendix 7 Land lease investment property fair value drivers Development Component – Land lease Investment Property Value • On acquisition of land, the asset is initially recognised in the Development segment and reflects the initial cost of the Primary IP Development - Segments In-Operation undevel
Slide 44: FY24 settlements – project value metrics
Appendix 8 FY24 settlements – project value metrics Overview of development project metrics Per Lot ($‘000) $243.01 $153.72 $84.42 $69.32 $194.02 Development profit “above the ground” $263.32 • Development profit reflects the gross development Development profit margin for new homes settled during t
Slide 45: Underlying to statutory profit
Appendix 9 Underlying to statutory profit FY24 Underlying to Statutory Profit Bridge 180.0 160.0 57.3 (96.6) 140.0 120.0 4.7 100.0 $m 94.8 80.0 60.0 (14.8) 40.0 (4.2) (6.2) (20.9) 20.0 14.0 0.0 Underlying Profit Gain on Disposal of Fair Value Gain on Impairment of Share of Joint Transaction Costs Re
Slide 46: Contact us
Contact us Donna Byrne Justin Mitchell Ingenia Communities Group GM Investor Relations and Sustainability Chief Financial Officer Level 3, 88 Cumberland Street, dbyrne@ingeniacommunities.com.au jmitchell@ingeniacommunities.com.au Sydney, NSW 2000 Tel: +61 401 711 542 www.ingeniacommunities.com.au Im
Slide 47: 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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