This article is from the Australian Property Journal archive
LAND lease and short stay accommodation operator Ingenia Communities has exceeded its full-year guidance thanks to higher new home settlements and recurring income, and has forecast more growth as it rides the tailwinds of the seniors housing and domestic travel sectors.
Ingenia posted EBIT growth of 17% to $125.7 million in FY24, ahead of guidance at 10% to 15% year-on-year, on FY23 and underlying earnings per security of 23.3c, up 14% and above its forecast 20.8c to 22.3c per security.
The group is targeting earnings per security of 24.4c to 25.6c for FY25 and EBIT growth of 10% to 15% on FY24.
The market responded positively, with shares closing 5.71% higher at $5.37.
“We are targeting further growth in FY25 as we maintain our focus on the seniors housing and domestic travel sectors, which have proven strong tailwinds,” Ingenia CEO and managing director, John Carfi said.
“Our recurring revenue streams provide a solid base and are growing, supporting returns as we focus on improving development outcomes.”
Group revenue was up 20% to $472.3 million, and EBIT was up 17% to $125.7 million. Operating cash flow of $82.2 million was steady with ongoing investment in inventory as settlements increase and new projects commence.
The group achieved 462 new home settlements in FY24, up 24%, with average home sales price also increasing.
Its lifestyle rental portfolio benefitted from CPI-linked rental increases, market rent reviews and growth in the rent base as developments and site intensification added new homes, delivering full year EBIT of $45.3 million, up 14%.
“The business is well placed to deliver growing returns and capitalise on the value inherent in our development pipeline and asset base, with good momentum demonstrated into FY25. We have a $2.5 billion portfolio (owned or managed), a pipeline of over 5,300 new home sites and the capacity to increase production to meet customer demand,” Carfi said.
It has 102 communities and 16,000 income-generating homes.
“While long term demand drivers remain in place, our guidance reflects the uncertainty caused by current macroeconomic conditions, changes to the regulatory and competitive landscape, and the lead time for delivery of future efficiency gains.
Ingenia noted some short-term challenges including ongoing high interest rates and cost of living pressures impacting residential markets. Across Ingenia’s submarkets, days on market are varied, ranging from an average of 16 to 70 days. Queensland projects are generally outperforming, with NSW experiencing more stable conditions and days on market in Victoria continuing to increase.
“The business is benefitting from diversity of price, location and product across the active developments with sales rates tracking in line with expectations.”
Carfi said that while Ingenia is “pleased” to increase settlements, development returns for some projects remain “below target”.
“I have spent considerable time in this area of the business, and we are progressing a range of initiatives that will ensure we move towards targeted returns over the medium term, building development into the growth engine of this business.”
A final distribution of 6.1c per stapled security has been declared. The full year distribution of 11.3c per security was up 3% on FY23.
