Metlifecare FY16 24 August 2016
Contents FY16 Results Highlights #1 3 Development & Growth #2 13 Operating Performance #3 19 Summary #4 25 Appendices #5 28 Please refer to the definitions section on page 37 of the presentation for additional detail on the non-GAAP financial measures contained within this presentation. A glossary of terms used in this presentation is contained on page 39. 2
Executive Team 1. FY16 Results Highlights
FY16 Results Highlights 1 Record sales of new and existing occupation right agreements in both volume and value. Strong platform created for future development growth. Continued momentum and market leadership in our upper Results North Island stronghold. Highlights Underlying profit $66.1m, up 26%. Net profit after tax $228.7m, up 86%. FY16 Final dividend of 4.0 cps, taking full year dividend to 5.75 cps, up 28%. 4
FY16 Results: Financial Highlights 1 FY16 FY15 Net profit after tax (IFRS) ($m) 228.7 122.7 Net operating cash flow ($m) 130.0 83.3 Net operating cash flow excluding development 50.5 34.4 sales ($m) 1 Underlying profit ($m) 2 66.1 52.4 Net assets per share ($) 5.32 4.29 Net profit after tax up 86% driven by strong residential property market. Earnings per share 107.5 cents, up 86%. Financial Net operating cash flow increased 56%. Highlights Underlying Profit up 26% and audited for FY16 (refer note 2.3 of the Financial Statements). Net Tangible Assets increased 24%. 1 Refer page 37 of this presentation for additional detail on net operating cash flow excluding development sales. 2 Refer to pages 30 and 37 of the presentation for additional detail on Underlying Profit. 5
FY16 Results: Operating Highlights 1 FY16 FY15 Development sales (units) 138 87 Resales (units) 430 403 Total development sales and resale (units) 568 490 Embedded value per unit ($’000) 1 208 155 Development sales volumes up 59%. Resales volumes up 7% with a 37% increase in realised resale gains per settlement. Operating Embedded value per unit increased 34% (refer pages 22 and 36 for additional Highlights detail). Resales occupancy remains strong at 97% excluding contracted stock and 98% including contracted stock. 1 Refer page 37 of this presentation for additional detail on Embedded Value. 6
FY16 Results: Development Highlights 1 FY16 FY15 New units completed 69 133 New care beds completed 36 - Total units & beds completed 105 133 Development landbank (units) 1,386 1,578 Development landbank (care beds) 387 502 Total development landbank (units & care 1,773 2,080 beds) 138 units settled delivered realised development margin at 13% and excluding The Orchards realised development margin at 15%. Delivered 105 units and beds during the year. 279 units and beds under construction at 30 June 2016. Development Development cash flows associated with investment properties increased 56% to $131.9m Highlights reflecting an increase in development activities during the year. Settled the purchase of a 3ha site on McClymonts Road, Albany. Completed a review of brownfield opportunities which resulted in future development units and beds being reduced and removed from the land bank to focus on greenfield growth. 7
FY16 Results: Underlying Profit 1 Underlying Profit 70.0 10.1 60.0 8.5 50.0 7.3 40.0 8.1 $'m 30.0 2.6 26.0 31.3 20.0 46.5 10.0 19.5 27.6 12.7 12.6 9.5 0.0 (3.9) (1.9) (10.0) FY12 FY13 FY14 FY15 FY16 Operational Performance Realised Resale Gains Realised Development Margin Underlying profit up 26%. 71% of the underlying profit delivered through realised resale gains reinforcing the value of the Metlifecare portfolio. Growth in realised development margin anticipated from increased development activity. Operational Performance 1 down due to increased residents’ capital gains and increased investment in operating cost to deliver growth. 1 Please refer to page 30 of the presentation for additional detail on Operational Performance. 8
FY16 Results: Operating cash flows 1 Operating cash flows per share 0.70 0.60 Cents per share 0.50 0.40 0.30 0.20 0.10 0.00 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 -0.10 Operating Cash flow per share Operating Cash flow per share excluding Development Sales Good growth in operating cash flows and operating cash flows excluding development sales. Operating cash flows from development sales are applied to repayment of debt. 9
FY16 Performance Highlights 1 Resale & Development Sales Volume Underlying Profit 70.0 600 60.0 138 500 113 87 61 50.0 400 40.0 36 300 $m 66.1 30.0 52.4 430 424 397 403 200 46.0 20.0 294 33.9 100 10.0 18.2 - 0.0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Resale Development Sales Underlying Profit Total Assets Net Tangible Assets per share 3.0 6.00 5.32 2.5 5.00 4.29 2.0 3.75 4.00 $ per share $b 1.5 3.04 3.00 2.6 3.00 2.2 2.0 1.0 1.9 1.2 2.00 0.5 0.0 1.00 FY12 FY13 FY14 FY15 FY16 0.00 Total Assets FY12 FY13 FY14 FY15 FY16 10
FY16 Portfolio 1 The majority of the Metlifecare portfolio is located in high growth Portfolio areas of Auckland, Bay of Plenty and Waikato. Located in High These areas have delivered significant property price growth over Growth Areas the past 12 months. Location by Value Location by Units 1% 2% 16% 18% 6% BOP BOP Lower Nth Island Lower Nth Island 4% 13% Waikato Waikato Auckland Auckland Northland Northland 62% 5% 73% 11
FY16 Portfolio 1 THE ORCHARDS GREENWICH GARDENS 54 units 27 units Metlifecare Portfolio Statistics CRESTWOOD POWLEY 135 units 80 units BAYSWATER HIGHLANDS 7 SAINT VINCENT 24 Villages (14 in Auckland) 232 units 199 units 93 units GREENWOOD PARK PAKURANGA THE POYNTON 240 units 4,025 Units 87 units 257 units THE AVENUES PINESONG WAITAKERE WAITAKERE 90 units 359 units 324 units 354 Care Beds and Care Suites SOMERVALE DANNEMORA HILLSBOROUGH 94 units 201 units 218 units PAPAMOA LONGFORD PARK HIBISCUS COAST 1,773 Units and Care beds available for development 78 units 193 units 269 units OAKRIDGE VILLAS 279 Units under construction 68 units 5,000 plus Residents PALMERSTON NTH (50% owned) FOREST LAKE 99 units 198 units KAPITI 225 units COASTAL VILLAS 205 units 12
Papamoa Beach Village, Papamoa 2. Development & Growth
Development & Growth 2 Development Landbank The Orchards Coastal Somervale Oakridge Papamoa The Avenues Greenwich Gardens Red Beach Albany Crestwood Pinesong 0 100 200 300 400 500 600 Units Care Beds Development land bank of 1,773 units and beds. Completed 105 new units and beds during FY16. Development sales of 138 units with realised development margin of 13% and an improving trend in recent development activity (development margin excluding The Orchards of 15%). 5ha of land at Red Beach on the Whangaparaoa Peninsula confirmed as unconditional in July and settled in August 2016. 14
Development & Growth 2 UNITS & BEDS UNDER CONSTRUCTION 48 Greenwich Gardens 104 69 Somervale 16 The Orchards 42 0 20 40 60 80 100 120 Beds Under Construction Units under Construction Total of 279 Units and Beds under construction (162 units and 117 beds) at 30 June 2016. 55 apartments at Greenwich Gardens completing in August 2016. 15
Development Progress 2 Papamoa Beach Village, Bay of Plenty 16
Greenwich Gardens, Auckland Development Progress 2 27 Villas completed and occupied 17
Development Progress 2 The Orchards, Auckland Nearing completion. • All completed units occupied. • 52% of the units under construction • have applications in the final stage.
The Orchards – Glenfield, Auckland Cox House Cafe 3. Operating Performance
Operating Performance 3 Resales Occupancy 98% 97% 96% 95% 94% 97% 97% 96% 96% 93% 92% 93% 91% 90% FY12 FY13 FY14 FY15 FY16 Resales occupancy remains high with increased stock returns resulting in higher resale volumes. Including stock that is currently under contract, total occupancy increases to 98%. Resales occupancy breakdown: Independent Living Units - 98% Serviced Apartments - 93% Development sales stock available at 30 June 2016 was 26 units excluding stock under contract. 20
Operating Performance 3 DMF & Realised Resale Gain per Settlement 200 180 160 66 140 120 61 $'000 100 56 55 44 80 60 111 81 40 66 69 69 20 - FY12 FY13 FY14 FY15 FY16 Realised Resale Gain DMF per Settlement Increased focus is being placed on yield management to capture property price growth in the market. DMF and realised resale gains per settlement have increased by 25% relative to the pcp reflecting mix of units and property price growth. The mix of units sold during the period was weighted towards ILUs and ILAs at 75% and SAs at 25%. 21
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