Peet increases full year profit
- Operating profit2 and statutory profit3 after tax of $49.1 million, up 10%
- Earnings per share of 10.02 cents, up 10%
- Full year dividend of 5.0 cents per share, fully franked, up 5%
- Revenue5 of $301.7 million with 2,924 lots settled
- EBITDA5 of $101.3 million, up 11%
- EBITDA5 margin of 34%
- Contracts on hand6 as at 30 June 2018 of 2,257, with a value of $616 million
- Gearing7 of 18.2%
- Strong operating cash flows of $118.0 million8
The Peet Group today announced an operating profit2 and statutory profit3 after tax of $49.1 million for the year ended 30 June 2018 (“FY18”), which represents an increase of 10% compared with the year ended 30 June 2017 (“FY17”).
Earnings per share were 10.02 cents, also representing an increase of 10% compared with FY17.
Peet Managing Director and CEO, Brendan Gore, said the results were underpinned by continuing favourable conditions across east coast markets.
“The benefits of the Group’s geographically diversified portfolio have underpinned the 2018 performance, with the favourable conditions on the east coast more than offsetting the subdued Perth market. Additionally, FY18 saw sales and settlements from the Queensland portfolio improve on the back of Flagstone and the Eden’s Crossing projects,” said Mr Gore.
The FY18 EBITDA5 increased by 11% on FY17 and the EBITDA5 margin for FY18 was 34%, compared to 29% for FY17.
“These increases are predominantly attributable to the price growth achieved across the Victoria and Queensland portfolios, the settlement of super lots and a continuing focus on efficiencies across the business,” said Mr Gore.
Peet has maintained its focus on prudent capital management and during the first half of FY18, issued $50 million of Peet Bonds, which has further diversified its debt structure. This diversification helps underpin a strong balance sheet and, together with low gearing9 of 18.2% (compared to 21.4% at 30 June 2017), provides Peet with the capacity to strategically replenish its landbank when opportunities emerge.
The Group achieved 2,950 sales (down 2% on FY17) with a gross value of $714.5 million and 2,924 settlements (down 5% on FY17) with a gross value of $711.5 million.
“Sales were impacted by the varied market conditions around the country, with east coast markets performing strongly and the Western Australian and Northern Territory markets continuing to be subdued. Settlements were affected by the timing of lot settlements across projects and the substantial completion of several syndicated Victorian projects during FY17.
“Importantly, sales and settlements from the Group’s Queensland portfolio increased 16% and 64%, respectively, compared to FY17, with the performance underpinned by the continued growth of the Flagstone estate and the first full year of sales from the Eden’s Crossing project,” said Mr Gore.
As at 30 June 2018 there were 2,257 contracts on hand10 with a gross value of $616.0 million, compared with 2,186 contracts on hand10 with a gross value of $545.7 million at 30 June in 2017. The pipeline of contracts on hand at year end provides strong momentum into the 2019 financial year (“FY19”).
Subsequent to 30 June 2018, the Directors declared a final dividend for FY18 of 3.0 cents per share fully franked, bringing the total dividend for the year to 5.0 cents per share, fully franked, which is 5% higher than FY17.
The Dividend Reinvestment Plan remains deactivated.
Peet will continue to target the delivery of quality residential communities around Australia by leveraging its land bank; working in partnership with wholesale, institutional and retail investors; and continuing to meet market demand for a mix of product in the growth corridors of major Australian cities, with a primary focus on affordable product.
Key elements of the Group’s strategy for the year ahead and beyond include:
- continuing to deliver high-quality, masterplanned communities, adding value and facilitating additional investment in amenity and services wherever possible;
- managing the Group’s land bank of more than 49,000 lots with a focus on maximising return on capital employed;
- continuing to assess opportunities to selectively acquire residential land holdings in a disciplined manner, predominantly under our funds management platform, and as appropriate to market conditions;
- maintaining a focus on cost and the level of debt; and
- broadening its product offering to Completed Homes and Medium Density.