Lifestyle Communities (LIC) H2 2024 earnings summary

Executive summary

• Achieved 375 new home sales and 311 settlements, with a portfolio and pipeline totaling 6,563 homes, despite challenging Victorian market conditions and declining consumer confidence in FY24.

• Operating profit after tax fell 25.7% to $52.9m, mainly due to lower settlements and higher marketing costs.

• Raised AUD 275 million through a fully underwritten rights issue to pay down debt and strengthen the balance sheet.

• Revenue from community management rose 16% to $54.7m, supported by increased annuity income streams.

• New land acquisitions included Armstrong Creek, with other sites at Clifton Springs, Yarrawonga, Inverloch, and Clyde.

Financial highlights

• Operating profit after tax: $52.9m (down from $71.1m year-over-year); new home settlements declined to 311 from 356.

• Community management revenue increased to $54.7m from $47.2m year-over-year.

• Net assets rose to $831.8m (up from $524.9m year-over-year); net debt reduced to $319.9m.

• Full year dividend: 10.5 cps (down from 11.5 cps year-over-year), with a final fully franked dividend of 5.0 cps declared for FY24.

• Asset fair value adjustments were -AUD 4 million in FY24, compared to AUD 15 million in FY23.

Outlook and guidance

• Withdrawing forward-looking guidance due to market uncertainty and negative media coverage; focus on balance sheet strength, targeted inventory sales, and disciplined cost management.

• Independent expert review underway to restore trust after media scrutiny and VCAT matter.

• 348 new home deposits on hand; 228 homes to settle in FY25, 120 in FY26.

• Monitoring sales performance and adjusting build rates, land acquisition, and marketing spend as needed.

• Confident in long-term demand for affordable housing and the DMF model, but cautious in the short term.