This article is from the Australian Property Journal archive
WHILE Ingenia Communities (ASX: INA) was impacted by broader market challenges including constraints in the construction industry and high interest rates, the same conditions could leave the group’s affordable offerings well positioned in the coming year.
Ingenia posted a statutory profit of $64.36 million down 33% from $95.79 million in FY22.
Over the FY23 period, INA’s EBIT was $109.26 million up from $101.73 million in FY22. Operating cash flow was at $82.5 million down 28% on $114.9 million in FY22.
With underlying earnings per security at 20.8 cents down on 23.3 cents per security in FY22. While distributions per security were at 11.0 cents, unchanged from FY22.
Net tangible assets were at $3.52 up 2% on $3.46 from 30 June 2022, with net asset value at $3.77 up 1% $3.72.
“Earnings were affected by first half construction challenges, now largely abated, and a slowing residential market which was impacted by the unprecedented twelve consecutive interest rate rises,” said Simon Owen, CEO at Ingenia.
“Revenue and EBIT increases on the prior year were delivered as we benefited from an expanded asset base as well as growth in rents across the residential portfolios, and further strong performance from the holidays business.”
The group settled 374 homes over FY23, with 324 homes contracted or deposited.
The group’s $2.3 billion portfolio was 39% weighted to Lifestyle Rental, 36% to Ingenia Holidays, 18% to Lifestyle Development at 7% to Ingenia Gardens.
With income generating sites across the group, as at 30 June 2023, totalling 14,558 sites.
Ingenia Lifestyle currently has development underway at 18 communities, with a strong development pipeline of 5,778 potential new home sites across 31 projects within Ingenia and joint ventures.
Ingenia Lifestyle Development saw a 4% increase in gross new home development profit tp $65.5 million with its EBIT down 7% to $33.3 million.
Ingenia Lifestyle Rental’s rental income was up 31% to $62.3 million with its EBIT up 34% to $35.9 million
Ingenia Gardens comprises 25 rental communities for a combined 1,340 rental units, with rental income up 2% to $24.8 million and EBIT down 9% to $10.5 million.
Ingenia Holidays portfolio comprises 32 holiday communities with tourism rental income up 36% to $97.3 million and EBIT up 31% to $46.4 million.
Ingenia’s gearing was at 25.3%, with a loan to value ration of 31.4%, a total debt facility of $780 million, drawn debt of $609.1 million and committed undrawn debt of $146.7 million.
While cost of drawn debt was at 4.6% and weight average debt maturity was at 3.4 years.
“Ingenia is ideally positioned to benefit as housing market conditions improve and our homes meet the demand for affordable housing balanced with an attractive lifestyle. We continue to cater to a range of locations and price points,” added Owen.
“We are focused on further asset recycling, growing cash flows and managing our balance sheet capacity to fund development activity and investment in embedded growth.”
For FY24, INA is targeting an underlying EPS of 20.8 cents to 22.3 cents and EBIT growth of 10% to 15% on FY23.
“With strong demand fundamentals, recurring rents from our residential business and a well positioned portfolio and balance sheet, we are confident in our ability to deliver growth in FY24,” concluded Owen.
“However, we remain cognisant of the ongoing uncertainty in the macroeconomic environment and residential sales activity.”
