This article is from the Australian Property Journal archive
THE contribution of new acquisitions has helped aged accommodation and tourist park operator Ingenia to a strong interim result and increasing margins, fuelling its appetite for further development activity.
Its underlying profit jumped by 37.7% to $14.6 million on the previous corresponding period, while EBIT was up 40.9% to $19.3 million and revenue 17.6% to $76.9 million.
Ingenia’s chief executive officer, Simon Owen, said the result demonstrated the benefit of successfully integrating quality acquisitions to the group’s platform and delivering on embedded growth across the group in rental cash flows and development earnings.
Rental income accounted for 80% of portfolio EBIT. Owen said the group has settled 117 new homes at a margin of around $114,000, with a strong second-half forecast supported by 207 contracts and deposits, including 72 across its Latitude One, The Grange and Lake Conjola projects.
It achieved a record 211 new home settlements in the 2017 financial year, ahead of its upgraded target of 190.
“Looking forward to FY19, it is very pleasing that all approvals are now in place for our targeted 350-plus settlements,” Owen said.
He said the group has experienced a strong start to the second half as it looked to accelerate the build-out of its development pipeline to deliver new rental contracts and increase scale and margins across the business.
“Margins across the business continue to improve, with scale benefits emerging.”
He said the group would continue to refine its portfolio in line with strategy, announcing the divestment of three non-core assets in the half, providing $17 million in capital to recycle into its lifestyle developments.
Through the middle of last year it acquired five sites following a $74 million capital raising in May. They included the Brisbane sites Sheldon Caravan Park in Eight Mile Plains and Durack Gardens, both for $25 million, among four established communities and one development site.
“Our tourism business is performing strongly with the result benefitting from acquisitions, including Cairns Coconut, and a growing digital and brand presence.”
Earnings per security for the half was grew by 18.3% to 7.1c, but this was partially offset by higher taxes.
Ingenia reaffirmed its full-year guidance of EBIT in the range of $45 million to $47 million; new home settlements of between 260 and 280; and EPS (underlying profit) of at least 15.6 cps.
Owens said its first greenfield project, Latitude One in Port Stephens, is “significantly exceeding” internal targets with more than 70% of released homes have been sold at an average price exceeding $475,000.
There are 38 homes currently under construction and the first residents are expected to move in from late April. Ingenia’s loan to value ratio was 35.1%, within the target range of 30% to 40% and below banking covenant of 50%.
Australian Property Journal
