Peet Limited · ASX:PPC
Peet — Shareholder Meeting (2007)
59 slides from Peet's shareholder meeting presentation, 2007
Slide 1: Welcome - Peet Limited 2007 Annual General Meeting
Welcome PEET LIMITED 2007 Annual General Meeting
Slide 2: Contents
Contents » Group Performance Highlights 3 » Group Financial Performance 5 » Strategic Growth Model and Initiatives 11 » Land Bank and Market Position 14 » Funds Management 34 » Retirement, Commercial and Residential 37 » Market Conditions and Outlook 45 » Future Outlook and Strategy 54 Enriching liv
Slide 3: Group Performance Highlights
Group Performance Highlights Peet achieved earnings growth of 23.6% for FY07; full year dividend up 14.7% to 19.5 cents per share fully franked » Full year net profit after tax of $45.5 million (FY06: $36.8 million) » Final dividend of 10.5 cents per share fully franked – up 11% on the previous corr
Slide 4: Group Performance Highlights (continued)
Group Performance Highlights (continued) Performance demonstrates Peet’s ability to consistently deliver through market cycles » Site works for first retirement village underway, with a further two villages approved for development » Well advanced diversified commercial and residential development p
Slide 5: Group Financial Performance
Group Financial Performance growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 6: Financial Performance
Financial Performance Peet has recorded and continues to target solid earnings growth » Four years historical NPAT of 23.9% (CAGR) » Overall improvement in EBIT margin to 51.6% » Up to eight new owned and syndicated projects commencing development during FY08 Historical Revenue Growth Historical EBI
Slide 7: EBIT by Geographical Region
EBIT by Geographical Region High quality earnings stream, weighted to funds management » Vic and Qld contributed 54% of FY07 EBIT » Overall improvement in operating margins » Three syndicate capital raisings completed totalling $57M » Growing contribution from retirement and residential built form p
Slide 8: Strong Shareholder Returns
Strong Shareholder Returns Peet has delivered solid fully franked dividend yield and growth which has driven strong TSR performance since listing Dividends Earnings per share 18.2% 4 year CAGR 10.4% 4 year CAGR 21.4 30 27.9 20 18.4 25 24.3 8.4 14.4 14.8 15 19.6 7.3 20 5.1 cps cps 15 14.3 10.5 10 4.3
Slide 9: Group Financial Performance
Group Financial Performance Significant business scale with aggregated group revenue in excess of $400 million » Charts below illustrate the Peet Group’s actual revenue and profit before tax consolidated for syndicated and joint venture projects » Growth in operations achieved through leveraging exi
Slide 10: Assets Under Management
Assets Under Management Total assets under management has grown to more than $1.5 billion » Consistent growth in assets under management1 1,600 1,502 1,400 1,244 1,200 1,000 891 784 millions 800 600 533 400 200 0 FY03 FY04 FY05 FY06 FY07 1 Assets adjusted for market value Enriching lives since 1895
Slide 11: Strategic Growth Model and Initiatives
Strategic Growth Model and Initiatives growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 12: Strategic Growth Model
Strategic Growth Model Peet’s strategic objective is to deliver EPS growth and TSR out-performance » Funds and asset management underpinned by Australia’s third largest land bank (ASX) and an established company-owned distribution network » Business model allows use of syndication and income fund pl
Slide 13: Key Drivers to Growth
Key Drivers to Growth Peet has an established and scalable business model and future earnings growth will be driven by leveraging existing platform » Continue to bring new projects to market (approx. 38,000* lot potential pipeline) » Increase scale of funds management business / syndication rollout
Slide 14: Land Bank and Market Position
Land Bank and Market Position growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 15: Land Bank and Market Position
Land Bank and Market Position Significant land bank with an on-completion value of approximately $6.13 billion1 » Australia’s third largest land bank amongst ASX listed entities » Existing controlled lots stand at approximately 33,800 with a further pipeline of 4,200 lots under conditional contract
Slide 16: Land Acquisition Activity
Land Acquisition Activity Land acquisition activity continues to facilitate future growth » Around 8,200 lots acquired since June 2006 – 9000 8,2021 22.5% land bank increase 8000 7000 » Acquisitions continue in key states of Vic, WA and Qld 6000 5000 4,297 » Industrial landholdings acquired in Vic –
Slide 17: Land Bank
Land Bank As at 30 September 2007 12 Projects 5,664 Lots » Peet has established a quality national land bank that provides a diversified production profile » Strong exposure to improving east coast property market » Estimated on-completion value approx. $6.13 billion QLD 9 Projects 4,370 Lots ► 13 y
Slide 18: Syndicated and JV Project Pipeline
Syndicated and JV Project Pipeline Over 16,350 lots under management, with an estimated on-completion value of $3.45 billion » Increased profitability projected over longer term as increased profit shares are realised on more recent syndicates No. of On Completion Lots2 Value ($m)1 2008 2009 2010 20
Slide 19: Owned Project Pipeline
Owned Project Pipeline Over 17,400 lots owned with a combined estimated completion value of $2.68 billion » Owned projects contributing to profits projected to increase from seven in FY07 to 14 in FY08 » Number of owned projects have historically low cost base No. of On-completion Lots 2 Value ($m)
Slide 20: Estates – Western Australia
Estates – Western Australia Enriching lives since 1895 | www.peet.com.au 20
Slide 21: Ashton Heights
Ashton Heights Owned Project Location 28km North of CBD Projected Gross Revenue $114 million Total Area 60.0 ha Purchase Date 2003 Commencement Completion Estimated Timing 2005 2009 Sold Remaining Total Number of Lots 444 159 603 Enriching lives since 1895 | www.peet.com.au 21
Slide 22: Burns Beach
Burns Beach Syndicated Project Awards Location 28km North of CBD » 2007 Western Australian Coast Care Award – Projected Gross Revenue $963 million Winner of Outstanding Total Area 290.0 ha Development, Innovation and/or Design Purchase Date 1969 Commencement Completion Estimated Timing 2005 2013 Sol
Slide 23: Lakelands Private Estate
Lakelands Private Estate Syndicated Project Awards Location Mandurah, 60km South of CBD » Urban Development Institute of Australia Award ‘2005 Environmental’ Projected Gross Revenue $419 million » Western Australian Environment Award Total Area 281.9 ha 2005 ‘Business Leading by Example’ Finalist Pu
Slide 24: The Village at Wellard
The Village at Wellard Joint Venture Project – Landstart (WA Gov’t) Awards Location Wellard, 29km South of CBD » 2006 Housing Industry Association Projected Gross Revenue $332 million Greensmart Development of the Year Total Area 320.6 ha » 2005 Planning Institute Australia Awards; » Special Commend
Slide 25: Quattro
Quattro Joint Venture Project – Urban Renewal Project Overview Location 11km South East of CBD » 5 full refurbishments Projected Gross Revenue $88 million » 308 demolitions » 280 lots created (24 hectares) Total Area 24.0 ha » Sustainable housing Purchase Date n/a Commencement Completion Estimated T
Slide 26: Estates - Victoria
Estates - Victoria Enriching lives since 1895 | www.peet.com.au 26
Slide 27: Greenvale
Greenvale Owned Project Location 20km North of CBD Projected Gross Revenue $500 million Total Area 357.0 ha Purchase Date 2003 Commencement Completion Estimated Timing 2004 2021 Sold Remaining Total Number of Lots 229 2,098 2,327 Enriching lives since 1895 | www.peet.com.au 57 27
Slide 28: Innisfail
Innisfail Owned Project Location 22km West of CBD Projected Gross Revenue $250 million Total Area 145.0 ha Purchase Date 1999 Commencement Completion Estimated Timing 2003 2012 Sold Remaining Total Number of Lots 837 623 1460 Enriching lives since 1895 | www.peet.com.au 58 28
Slide 29: Brimbank Gardens
Brimbank Gardens Syndicated Project Location 18km West of CBD Projected Gross Revenue $259 million Total Area 203.0 ha Purchase Date 2001 Commencement Completion Estimated Timing 2002 2015 Sold Remaining Total Number of Lots 1068 1001 2069 Enriching lives since 1895 | www.peet.com.au 59 29
Slide 30: Tarneit Gardens
Tarneit Gardens Syndicated Project Location 25km West of CBD Projected Gross Revenue $139 million Total Area 124.6 ha Purchase Date 2003 Commencement Completion Estimated Timing 2005 2012 Sold Remaining Total Number of Lots 506 622 1128 Enriching lives since 1895 | www.peet.com.au 60 30
Slide 31: Cardinia Lakes
Cardinia Lakes Syndicated Project Location 55km South East of CBD Projected Gross Revenue $115 million Total Area 90 ha Purchase Date 2003 Commencement Completion Estimated Timing 2005 2013 Sold Remaining Total Number of Lots 171 593 764 Enriching lives since 1895 | www.peet.com.au 61 31
Slide 32: Estates - Queensland
Estates - Queensland Enriching lives since 1895 | www.peet.com.au 32
Slide 33: Warner Lakes
Warner Lakes Syndicated Project Location 21km North of CBD Projected Gross Revenue $203 million Total Area 206 ha Purchase Date 2003 Commencement Completion Estimated Timing 2004 2012 Sold Remaining Total Number of Lots 431 725 1156 Enriching lives since 1895 | www.peet.com.au 62 33
Slide 34: Funds Management
Funds Management growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 35: Syndicate Capital Raising and Distribution
Syndicate Capital Raising and Distribution Direct distribution network of 4,000 active investors; strong repeat investment in excess of 65% » A further 6,000 prospective investors who receive information » $57M raised from three land syndications in FY07 – Botanic, Mundijong and Beachton » Increased
Slide 36: Funds Management – Income Property Fund
Funds Management – Income Property Fund » A portfolio of non-CBD commercial and industrial properties » Two new properties purchased in FY07 » A third property was acquired (first in Victoria) and settled in August 2007 » Expanded to more than 600 unit holders — strong inflow of funds » Over $50 mil
Slide 37: Retirement, Commercial and Residential
Retirement, Commercial and Residential growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 38: Retirement - Senior Living
Retirement - Senior Living » Demographics point to major growth opportunity » Priority is organic growth – adding value to Peet land estates » Solid pipeline of developments already identified » New “Peet Senior Living” and “Lattitude” brands established » Focus on strata-title resort-style villages
Slide 39: Retirement - Senior Living (continued)
Retirement - Senior Living (continued) Lattitude Lakelands » Within Lakelands Estate, Mandurah » 194 unit retirement village » Construction underway » Stage 1 (31 units) 60% sold » 4 year project » Project value $70 million Enriching lives since 1895 | www.peet.com.au 39
Slide 40: Commercial and Residential Built Form
Commercial and Residential Built Form More than 100 residential built form and commercial projects identified in land bank; potential syndication and income fund feedstock » Peet Living undertakes development of boutique low rise apartments, townhouses and gated villa complexes. » Peet Commercial se
Slide 41: Carramar Village
Carramar Village Syndicate Project Carramar Village, Carramar, WA Project Type Shopping & medical No. of retail units 16 Current Status Development approval received and building licence application submitted. Construction t o commence late 2007\early 2008` . Expected Completion October 2008 Date De
Slide 42: Grand 56, Joondalup, WA
Grand 56, Joondalup, WA Owned Project Grand 56, Joondalup, WA Project Type Mixed use (apartments & commercial) No. of residential 24 plus 1 commercial units Current Status 100% sold Expected Completion January 2008 Date Description This boutique project designed by leading Perth residential archit e
Slide 43: Vantage Square\Madison Square, Wellard
Vantage Square\Madison Square, Wellard Owned Project Vantage Square\Madisson Square, Wellard, WA Project Type Apartments and Tow nhouses No. of residential 120 Apartments and Tow nhouses Units Current Status Building Licence application under preparation. Sales and construction commencing Q2\Q3 2008
Slide 44: Fusion Ashton Heights
Fusion Ashton Heights Owned Project Fusion Ashton Heights, Tapping, WA Project Type Gated Villas No. of residential 27 villas Units Current Status Civil, landscape and pool w orks commenced. Sales to be launched end of 2007 Expected Completion February 2008 Date Description Fusion is Peet' s innovat
Slide 45: Market Conditions and Outlook
Market Conditions and Outlook growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 46: Market Overview: Unemployment Rate
Market Overview Positive Outlook » Unemployment rate at an all time low » Planning restrictions affecting availability » Strong population growth of new supply » Residential vacancies near all time lows » Housing affordability an emerging issue » Residential rents growing strongly Low Employment is
Slide 47: Residential Market Overview
Residential Market Overview Peet is well placed to take advantage of improving market conditions in the east coast market MARKET PERFORMANCE Last 6 -12 Months Next 6 -12 Months Sound. Improving demand. Price growth. Improving volume and prices. VIC Low vacancy rate. Low vacancy rate. ▲ Underlying de
Slide 48: Population, ageing and migration
Population, ageing and migration Source of Population: Overseas Migration » Net migration approaching natural increase » Migration will drive population growth » Migration relied on by states suffering labour shortages 200,000 180,000 160,000 140,000 120,000 100,000 80,000 Natural Increase 60,000 Ne
Slide 49: Strong Population Growth has Driven Housing Demand
Strong Population Growth has Driven Housing Demand Underlying housing demand running at approximately 3,175 dwellings per week » Population growth in the three key States of Vic, WA and Qld has been strong. » After some years of below Australian average population growth, Victoria has rebounded with
Slide 50: Population and migration
Population and migration Source of Population: Inter-state migration » WA population continues to grow Queensland (Dec Qtr) Queensland (Dec Qtr) Interstate : 8,273 Interstate : 8,273 International : 6,301 International : 6,301 Natural Increase: 7,034 Natural Increase: 7,034 Population Change: 21,608
Slide 51: Strong Population Growth Expected to Continue
Strong Population Growth Expected to Continue Overseas migration a key driver of population growth » Strong population growth is projected to continue in key states of Vic, WA and Qld 9,000,000 8,000,000 7,000,000 6,000,000 Population 5,000,000 4,000,000 NSW Vic QLD WA 3,000,000 2,000,000 1,000,000
Slide 52: Record Low Vacancy Rates
Record Low Vacancy Rates All key states experiencing record low vacancy rates » A tightening rental market is expected to see rents rise which may also drive prices further. % 9 8 MELB BRIS 7 PERTH AUS Qtr’ly Vacancy Rate AVG (AUS) Tightening rental market 6 5 4 3 2 Record low vacancy rates 1 0 SEP8
Slide 53: Economic Snapshot
Economic Snapshot States economic overview » Solid medium term economic outlook for Queensland, Victoria and New South Wales » Steady growth outlook for Western Australia % 7 forecast Vic NSW Qld WA 6 5 4 3 2 1 0 2005-06 (a) 2006-07 (e) 2007-08 (f) 2008-09 (f) 2009-10 (f) 2010-11 (f) Source: State G
Slide 54: Future Strategy and Outlook
Future Strategy and Outlook growth and diversity Enriching lives since 1895 | www.peet.com.au
Slide 55: Peet's Growth Strategy
Peet’s Growth Strategy Clear platform for growth from existing businesses » Continue to optimise our core business » Continue to unlock further development opportunities within our existing land bank — retirement, retail, commercial and industrial developments » Increase scale of funds management bu
Slide 56: Outlook
Outlook Continued focus on earnings growth as a key driver of shareholder value » Operating businesses performing well » Strategic initiatives on track » Strengthened balance sheet to capitalise on and pursue new growth opportunities » National land bank allows us to capitalise on market conditions
Slide 57: About Peet
About Peet Enriching lives since 1895 | www.peet.com.au 57
Slide 58: Asset Manager, Land Syndicator, Fund Manager
Asset Manager Land Syndicator Fund Manager growth and diversity Enriching lives since 1895 | www.peet.com.au 58
Slide 59: Disclaimer
Disclaimer While every effort is made to provide accurate and complete information, Peet does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Pe