This article is from the Australian Property Journal archive
AN ageing population and increasing number of downsizers has helped Ingenia Communities (ASX: INA) weather soft residential market conditions and achieve its highest ever number of settlements.
Annual underlying profit grew 28% to $47.2 million for the 2019 financial year, and statutory profit slipped 14% to $29.3 million. Group revenue lifted 21% to $228.7 million and EBIT by 26% to $61.5 million, above guidance of 15% to 20%.
An increase in settlements and rental income grew operating cash flow by 26% to $59.3 million. The record number of 336 new home settlements in the period reflected a 17% increase, and is expected to add about $2.7 million in annual rental income.
The strong settlements figure and asset performance took earnings per security of 21 cents above guidance and a 19% above FY18.
“It is particularly pleasing that in the most challenging residential market in a decade we had a record year for new home settlements at increased above ground development margins and higher rents,” chief executive officer, Simon Owen said.
“Demand drivers remain strong across the industry with an ageing population and housing affordability underpinning earnings growth. Whilst we saw some slowing of the residential market, our investment proposition for seniors is gaining widespread traction and remains compelling. Many seniors will struggle to fund a comfortable retirement and downsizing to one of our communities is already making a significant difference to the quality of life for many of our residents.”
INA closed out the year with over 200 contracts and deposits on hand.
The group made $72.6 million in new acquisitions and and expects to settle the acquisition of funds management business, Eighth Gate Capital, later this month. During the year it entered into a joint venture with Sun Communities that has acquired its first two projects, and four additional sites are “actively being assessed”.
INA purchased land adjacent to its Lara community which has the potential for 196 new homes, and has obtained approvals for 184 new homes in its communities at Chambers Pines and Hervey Bay.
Ingenia expects to deliver EBIT growth of 10% to 15%, and underlying earnings per security growth of 5% to 10% for FY20.
A final distribution of 5.80 cpss was declared. The full year distribution of 11.2 cpss was a 4% increase.
