Ingenia Communities Group announced underlying profit of $34.8 million, up 24% on the prior year, as the business benefitted from a growing revenue base.
Ingenia’s CEO, Simon Owen said the core residential communities and holiday parks businesses were delivering growth and experiencing ongoing demand, with the Group’s key challenges being continuing construction delays and, more recently, a softening residential market.
“During the first half, revenue and EBIT increases on the prior year were delivered as we benefitted from an expanded asset base as well as growth in rents across the residential portfolios and strong performance from the holidays business. We commenced our asset recycling program as we focussed on improving portfolio quality and internally funding growth. However, extended construction timeframes and the subsequent impact on home settlements moderated first half earnings,” Mr Owen said.
Group revenue was up 32% to $173.6 million, and EBIT was up 24% to $42 million as high occupancy and rate growth across the lifestyle, rental and holidays communities contributed. Operating cash flow of $23.5 million was down 39% on 1H22, due to an increase in new home constructions to support 2H23 and FY24 settlements. Underlying EPS of 8.5 cents represents a 5% increase on 1H22. Statutory EPS of 8.3 cents was down 27%.
The Group achieved 125 new home settlements in 1H23 and Ingenia’s Lifestyle rental base continues to grow, with rental revenue up 51% to $30.3 million.
The Group’s holiday park earnings were up 64% on the prior comparable period to $20.8 million reflecting high occupancy and growth in average daily rates.
Mr Owen said, “In the short term, ongoing labour shortages and the impact of inflationary pressures and higher interest rates on consumer sentiment are expected to slow down our customers’ purchase journey. However, the fundamentals supporting our developments remain sound. Our communities are an attractive proposition for a growing cohort of downsizers who have substantial equity in their homes and are seeking to downsize not only for financial but lifestyle reasons.
A half year distribution of 5.2 cents per stapled security has been declared and is expected to be paid on 23 March 2023.
Subject to no material change in the operating environment, the Group is targeting EBIT growth of 0-10% on FY22 and underlying EPS of 19.1 cps to 21.5 cps for FY23, which is lower than previous guidance of EBIT growth of 30% and EPS growth of 5% (24.4 cps).