Metlifecare FY16 24 August 2016 Contents FY16 Results Highlights - - PowerPoint PPT Presentation
Metlifecare FY16 24 August 2016 Contents FY16 Results Highlights #1 3 Development & Growth #2 13 Operating Performance #3 19 Summary #4 25 Appendices #5 28 Please refer to the definitions section on page 37 of the presentation
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3 FY16 Results Highlights #1 19 Operating Performance #3
Please refer to the definitions section on page 37 of the presentation for additional detail on the non-GAAP financial measures contained within this presentation. A glossary of terms used in this presentation is contained on page 39.
13 Development & Growth #2 25 Summary #4 28 Appendices #5
Executive Team
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Results Highlights
Record sales of new and existing occupation right agreements in both volume and value. Strong platform created for future development growth. Continued momentum and market leadership in our upper North Island stronghold. Underlying profit $66.1m, up 26%. Net profit after tax $228.7m, up 86%. FY16 Final dividend of 4.0 cps, taking full year dividend to 5.75 cps, up 28%.
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FY16 FY15 Net profit after tax (IFRS) ($m) 228.7 122.7 Net operating cash flow ($m) 130.0 83.3 Net operating cash flow excluding development
sales ($m)1
50.5 34.4 Underlying profit ($m)2 66.1 52.4 Net assets per share ($) 5.32 4.29
Financial Highlights
Net profit after tax up 86% driven by strong residential property market. Earnings per share 107.5 cents, up 86%. Net operating cash flow increased 56%. Underlying Profit up 26% and audited for FY16 (refer note 2.3 of the Financial Statements). Net Tangible Assets increased 24%.
1 Refer page 37 of this presentation for additional detail on net operating cash flow excluding development sales. 2 Refer to pages 30 and 37 of the presentation for additional detail on Underlying Profit.
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FY16 FY15 Development sales (units) 138 87 Resales (units) 430 403 Total development sales and resale (units) 568 490 Embedded value per unit ($’000)1 208 155
Operating Highlights
Development sales volumes up 59%. Resales volumes up 7% with a 37% increase in realised resale gains per settlement. Embedded value per unit increased 34% (refer pages 22 and 36 for additional detail). Resales occupancy remains strong at 97% excluding contracted stock and 98% including contracted stock.
1 Refer page 37 of this presentation for additional detail on Embedded Value.
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FY16 FY15 New units completed 69 133 New care beds completed 36
105 133 Development landbank (units) 1,386 1,578 Development landbank (care beds) 387 502 Total development landbank (units & care beds) 1,773 2,080 138 units settled delivered realised development margin at 13% and excluding The Orchards realised development margin at 15%. Delivered 105 units and beds during the year. 279 units and beds under construction at 30 June 2016. Development cash flows associated with investment properties increased 56% to $131.9m reflecting an increase in development activities during the year. Settled the purchase of a 3ha site on McClymonts Road, Albany. Completed a review of brownfield opportunities which resulted in future development units
and beds being reduced and removed from the land bank to focus on greenfield growth.
Development Highlights
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Underlying profit up 26%. 71% of the underlying profit delivered through realised resale gains reinforcing the value of the Metlifecare portfolio. Growth in realised development margin anticipated from increased development activity. Operational Performance1 down due to increased residents’ capital gains and increased investment in operating cost to deliver growth.
1 Please refer to page 30 of the presentation for additional detail on Operational Performance.
(3.9) (1.9) 12.7 12.6 9.5 19.5 27.6 26.0 31.3 46.5 2.6 8.1 7.3 8.5 10.1
(10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 FY12 FY13 FY14 FY15 FY16
$'m
Underlying Profit
Operational Performance Realised Resale Gains Realised Development Margin
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0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Cents per share
Operating Cash flow per share Operating Cash flow per share excluding Development Sales
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18.2 33.9 46.0 52.4 66.1 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 FY12 FY13 FY14 FY15 FY16 $m
Underlying Profit
Underlying Profit 294 424 397 403 430 36 113 61 87 138
200 300 400 500 600 FY12 FY13 FY14 FY15 FY16
Resale & Development Sales Volume
Resale Development Sales 1.2 1.9 2.0 2.2 2.6 0.0 0.5 1.0 1.5 2.0 2.5 3.0 FY12 FY13 FY14 FY15 FY16 $b
Total Assets
Total Assets 3.04 3.00 3.75 4.29 5.32
0.00 1.00 2.00 3.00 4.00 5.00 6.00 FY12 FY13 FY14 FY15 FY16
$ per share
Net Tangible Assets per share
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Portfolio Located in High Growth Areas
The majority of the Metlifecare portfolio is located in high growth areas of Auckland, Bay of Plenty and Waikato. These areas have delivered significant property price growth over the past 12 months.
16% 6% 4% 73% 1%
Location by Value
BOP Lower Nth Island Waikato Auckland Northland 18% 13% 5% 62% 2%
Location by Units
BOP Lower Nth Island Waikato Auckland Northland
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CRESTWOOD HIGHLANDS PAKURANGA PINESONG DANNEMORA LONGFORD PARK HIBISCUS COAST WAITAKERE WAITAKERE THE POYNTON 7 SAINT VINCENT POWLEY 135 units 80 units HILLSBOROUGH 199 units 93 units 87 units 257 units 359 units 324 units 201 units 218 units 193 units 269 units OAKRIDGE VILLAS 68 units SOMERVALE THE AVENUES GREENWOOD PARK BAYSWATER 232 units 240 units 90 units 94 units 78 units PALMERSTON NTH (50% owned) 99 units KAPITI COASTAL VILLAS 225 units 205 units 198 units FOREST LAKE PAPAMOA THE ORCHARDS 54 units GREENWICH GARDENS 27 units
Metlifecare Portfolio Statistics 24 Villages (14 in Auckland) 4,025 Units 354 Care Beds and Care Suites 1,773 Units and Care beds available for development 279 Units under construction 5,000 plus Residents
Papamoa Beach Village, Papamoa
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Development land bank of 1,773 units and beds. Completed 105 new units and beds during FY16. Development sales of 138 units with realised development margin of 13% and an improving trend in recent development activity (development margin excluding The Orchards of 15%). 5ha of land at Red Beach on the Whangaparaoa Peninsula confirmed as unconditional in July and settled in August 2016.
100 200 300 400 500 600 The Orchards Coastal Somervale Oakridge Papamoa The Avenues Greenwich Gardens Red Beach Albany Crestwood Pinesong
Development Landbank
Units Care Beds
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Total of 279 Units and Beds under construction (162 units and 117 beds) at 30 June 2016. 55 apartments at Greenwich Gardens completing in August 2016.
42 16 104 69 48 20 40 60 80 100 120 The Orchards Somervale Greenwich Gardens
UNITS & BEDS UNDER CONSTRUCTION
Beds Under Construction Units under Construction
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Papamoa Beach Village, Bay of Plenty
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Greenwich Gardens, Auckland 27 Villas completed and
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The Orchards, Auckland
have applications in the final stage.
The Orchards – Glenfield, Auckland Cox House Cafe
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93% 96% 96% 97% 97%
90% 91% 92% 93% 94% 95% 96% 97% 98% FY12 FY13 FY14 FY15 FY16
Resales Occupancy
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and property price growth.
66 69 69 81 111 44 56 55 61 66
40 60 80 100 120 140 160 180 200 FY12 FY13 FY14 FY15 FY16
$'000
DMF & Realised Resale Gain per Settlement
Realised Resale Gain DMF per Settlement
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gains and cash flow generation.
2015.
53 64 69 74 80 60 54 61 81 128
50 100 150 200 250 FY12 - Merged FY13 FY14 FY15 FY16
$'000
Embedded Value
DMF Resales Gains
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Residents
the average length of stay for units settled was:
ILUs and ILAs was 75.7 years and for SAs was 83.9. Staff
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FY16 FY15 Dividend per share (cps) 4.0 3.0 Total dividend per share (cps) 5.75 4.50 The Metlifecare Board have declared a final dividend of 4 cents per share, unimputed. This represents a pay-out for the second half of approximately $8.5m. The total dividend paid for 2016 (interim and final) of 5.75 cents per share being approximately $12.2m, represents 19% of underlying profit. The record date for the final dividend is 9 September 2016 and the payment date is 23 September 2016. The Dividend Reinvestment Plan does not apply for this dividend.
Greenwich Gardens, Unsworth Heights Auckland
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Summary
Record sales of new and existing occupation right agreements in terms of volume and value. Strong platform created for future development growth. Continue to focus growth in value-creating areas and build on our geographic market strength. Record underlying profit $66.1m, up 26%. Record net profit after tax $228.7m, up 86%.
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Waitakere Gardens- Auckland
Profit & Loss FY16 ($m) FY15 ($m) Total revenue 106.2 101.5 Fair value movement of investment property 237.2 121.2 Joint Venture share of profit 0.4 1.0 Total expenses (100.0) (90.0) Finance costs (0.1) (0.2) Net profit before tax 243.7 133.5 Tax expense (15.0) (10.8) Net profit after tax 228.7 122.7 Non recurring item
Net profit excluding non recurring items 228.7 121.7
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FY16 revenue was 5% ahead of the pcp. The Fair Value movement was up 96% on the pcp as a result of strong property price growth. Auckland and BOP villages delivered strong property price lifts. Deferred tax increased as a result of increased future DMF income associated with price lifts. Total expenses ahead of the pcp due to: Loss on sale of the Wairarapa Village. Increase in residents’ share of capital gains as a result of sales price growth. Greenwich Gardens and The Orchards operating with the majority of completed units occupied. Investment in the future has led to an increase in support office costs to assist increased operations activity and development growth.
Underlying Profit before tax FY16 ($m) FY15 ($m) Net profit excluding non recurring items 228.7 121.7 Fair Value movement of investment property (237.2) (121.2) Loss on sale or Impairment on PP&E 3.0 1.3 Tax expense 15.0 10.8 Operational performance 9.5 12.6 Realised resale gains 46.5 31.3 Realised development margin 10.1 8.5 Underlying profit before tax 66.1 52.4
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Underlying profit before tax up 26%. Realised resale gains ahead 49% on the pcp as a result of increased realised resale gain per settlement and mix of ILUs, ILAs and SAs.
Operating Cash Flow FY16 ($m) FY15 ($m) Development sales cash flows 79.5 48.8 Resales cash flows (realised resale gains) 46.5 31.3 Total sales and resales cash flows 126.0 80.1 Net operations performance 4.1 3.2 Interest paid (0.1)
130.0 83.3
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and settlement volumes achieved given the mix of units settled.
increase on FY15. * The table above splits operating cash flows between sales, resales, operations and interest (refer page 32 for additional detail).
Resident receipts above.
Operating Cash Flow FY16 ($m) FY15 ($m) Resident receipts 87.8 81.1 ORA development sales & resales 256.4 196.2 Payments to suppliers (84.1) (79.4) ORA repurchases (130.4) (116.1) GST 0.3 (0.6) Interest received 0.1 0.1 Interest paid (0.1)
Net operating cash per cash flow 130.0 83.3 Operating cash flow with development sales & resales split Development sales cash flows 79.5 48.8 Net resales cash flows 46.5 31.3 Net ORA cash flows 126.0 80.1 Net operating performance 4.1 3.2 Interest paid (0.1)
130.0 83.3
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Balance Sheet FY16 ($m) FY15 ($m) Cash & other assets 25.2 17.0 Property plant & equipment 36.4 33.8 Investment properties 2,524.8 2,176.6 Total assets 2,586.4 2,227.4 Payables & other liabilities 31.3 26.9 Bank loans 80.8 60.1 Deferred membership fees 93.5 84.2 Refundable occupation right agreements 1,154.1 1,066.1 Deferred tax liability 93.7 78.7 Total liabilities 1,453.4 1,316.0 Total equity 1,133.0 911.4
Investment Properties FY16 ($m) FY15 ($m) Development land 47.1 23.9 Investment properties under development 46.3 42.3 Completed investment properties 1,181.0 957.6 Total valuation 1,274.4 1,023.8 Plus: Refundable occupation right agreement amounts 1,437.4 1,346.1 Plus: Residents’ share of capital gains 30.6 29.6 Plus: Deferred Membership Fee 93.5 84.2 Less: Membership fee receivables (307.8) (282.6) Less: Occupation right agreement receivables (3.3) (24.5) Total investment properties 2,524.8 2,176.6
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2015.
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Woodwork talents at Greenwood Park, Tauranga
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Metlifecare Portfolio - 30 June 2016
Villages ILU's ILA's SA's Total Care Beds Care Suites Total Future Units Future Care Beds Total Overall Total Crestwood 121 14 135 41 41 22 22 198 Dannemora Gardens 201 201 201 The Orchards 54 54 36 36 42 42 132 Hibiscus Coast Village 150 71 48 269 269 Hillsborough Heights Village 176 42 218 218 Highlands 129 70 199 41 41 240 Longford Park Village 144 49 193 193 Pakuranga Village 69 18 87 60 60 147 Pinesong 100 232 27 359 10 10 29 29 398 Powley 46 34 80 45 45 125 Poynton 242 15 257 5 5 262 7 Saint Vincent 81 12 93 2 2 95 Greenwich Gardens - Unsworth Heights 27 27 355 48 403 430 Waitakere Gardens 324 324 324 Red Beach 419 68 487 487 Albany 346 86 432 432 Auckland Total 962 1205 329 2496 223 17 240 1213 202 1415 4151 The Avenues 90 90 30 30 60 150 Bayswater 159 56 17 232 6 6 238 Greenwood Park 145 81 14 240 240 Papamoa Beach Village 78 78 88 48 136 214 Somervale 83 11 94 40 40 16 69 85 219 BOP Total 465 227 42 734 40 6 46 134 147 281 1061 Coastal Villas 140 16 49 205 30 30 4 4 239 Kapiti Village 225 225 225 Palmerston North Village 49 50 99 38 38 137 Oakridge Villas 68 68 35 38 73 141 Forest Lake Gardens 142 56 198 198 Other Total 624 72 99 795 68 68 39 38 77 940 Total 2051 1504 470 4025 331 23 354 1386 387 1773 6152
right agreements (as per page 31) of $79.5m from net cash flow from operating activities in the financial statements. Development sales cash flows are utilised to repay debt so net operating cash flows excluding development sales is a measure of the free cash flows available from operations.
plant & equipment and excludes one-off gains & losses and taxation. It is a non-GAAP financial measure and is not prepared in accordance with NZ IFRS. Underlying profit is a retirement village industry standard presented to assist in comparison of Metlifecare with its peers.
Coast Village and is offset by costs associated with the remediation. It is a non-GAAP financial measure and is not prepared in accordance with NZ IFRS. Metlifecare believes it assists readers understand the operating performance of the business on a comparable basis.
development of the unit. The calculation includes construction costs, non-recoverable GST, capitalised interest to the date of completion, land apportionment at cost, and infrastructure costs but excludes construction costs associated with offices, common areas and amenities. Margins are calculated based on when a stage is completed. Margins presented above are on the basis of the settled units during the period.
in relation to joint venture accounting are excluded when calculating average settlement values in the operational section. In FY16 resale settlements for Metlifecare Palmerston North were ILU’s 5 and SA’s 7 (FY15 ILU’s 7 and SA’s 11). DMF and realised resale gains figures exclude resale settlements for Metlifecare Palmerston North when calculating average settlements.
refundable loan liability as per the balance sheet and company-owned stock items. The embedded value is a combination of Resale Gains and Deferred Membership Fee receivable. The value of the Deferred Membership Fee receivable is as per note 3.1 of the Financial Statements and the balance is Embedded Resale Gains. The per unit calculations have been adjusted for the Palmerston North joint venture accounting changes. Embedded value assists readers to understand the potential future cash flows from Realised Resale Gains & Deferred Management Fee Receivables.
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reader with understanding the volumes of units settled during the period and the impact that development sales and resales during the period had on occupancy as at the end of the period.
investment decision. It is intended to constitute a summary of certain information relating to the performance of Metlifecare Limited (“Metlifecare”) for the year ended 30 June 2016. Please refer to the financial statements for the year ended 30 June 2016 that have been simultaneously released with this presentation.
investment decision, investors must rely on their own examination of Metlifecare, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition
warranty, expressed or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or
extent permitted by law, Metlifecare, its directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Metlifecare, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any person through use of or reliance on anything contained in, or omitted from, this presentation.
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The sale of an ORA where a sale has previously been completed
The difference between the resale and repurchase of occupation right agreements
Occupation Right Agreement
Independent Living Unit
Independent Living Apartment
Serviced Apartment
Prior Comparable Period
Independent Living Units, Independent Living Apartments and Serviced Apartments
Deferred Membership Fees