Ingenia FY21 to exceed guidance

16 July 2021

Ingenia Communities Group announced that the Group’s FY21 result would exceed guidance, as a result of strong performance across the operating business and the settlement of 380 new homes for the year across Ingenia and the Joint Venture (with a further 10 settlements in the funds business).

Ingenia Communities Group CEO, Simon Owen, said that the business delivering such a strong outcome, despite the challenges of the last year, reflected the momentum across the business and diversity of earnings.

“We will exceed our guidance for FY21, supported by strong settlements in the last quarter, high occupancy across our residential communities and improved performance from the holidays business from the second quarter. Above ground home development margins exceeded the first half and we close the year with over 300 contracts and deposits in place, demonstrating the growing demand across our development projects,” Mr Owen said.

The FY21 result, which remains subject to finalisation of the Group’s accounts and audit process, is expected to exceed the upper end of the Group’s guidance range, with EBIT anticipated to be up circa 30% on FY20 EBIT of $71.9 million (versus guidance of only 15-20% growth). Underlying earnings per security is expected to be circa 5% above FY20 underlying eps (versus guidance of a 1-2 cents per security decline on FY20).

The Group’s holiday parks have benefitted from buoyant demand for domestic travel, with revenue of over $50 million for the year, up on FY20. The recent restrictions for greater Sydney have materially impacted bookings across the Group’s NSW holiday parks which have experienced high cancellations. Increased intrastate travel has mitigated the impact of cancellations on the Group’s key Queensland parks, including Cairns Coconut and Noosa. While demand is anticipated to rebound as restrictions ease, uncertainty around the timing and length of restrictions remains the key determinant of holidays performance over FY22.

The Group’s asset base continued to expand through the completion of more than $190 million of acquisitions in FY21 as the Group deployed the $178 million of equity raised at the end of FY20. Settlement of a portfolio of five holiday parks will occur over July and further acquisition opportunities are under consideration.

Mr Owen said: “Ingenia enters FY22 with a positive outlook – our residential communities are delivering stable revenues and we are seeing ongoing demand for domestic travel which is benefitting our holiday parks. In addition, we have new developments commencing which will assist us to meet the growth in demand we are seeing in our key markets. With strong deposits and contracts in place, additional balance sheet capacity and a solid acquisitions pipeline we are continuing to focus on expanding our footprint and rental base to deliver future growth.”

Further information on FY21 financial and operating performance will be provided in the Group’s financial results announcement on 18 August.

Unit Price Performance

The REIT has shown strong unit price growth in 2021 off the back of acquisitions and further equity raising. In March the group released their results for the 1H of 2021 with an Underlying, an increase of 24% on the previous corresponding period, however earnings per share was down -6% following the earlier capital raising.

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