Tourism rebound, rental income boost Ingenia's earnings
Rebounding domestic tourism, increasing rental income from land lease communities and upwards revaluation of its assets pushed Ingenia’s first-half profit up almost 23 per cent even as new home settlements stalled due to construction delays.
The ASX-listed operator of holiday parks and developer of residential communities for downsizing baby boomers said revenue rose 7.7 per cent to $131.4 million and statutory profit increased to $53.1 million from $36 million.
Ingenia said it was on track to settle more than 475 residential lots this year, having completed just 139 in the first half. It repeated its earlier guidance of 20-25 per cent growth in earnings before interest and tax for the year as a whole, with 3-6 per cent growth in underlying earnings per share from last year,
Jarden analyst Andy MacFarlane said the results were weaker than expected given Ingenia’s recent boost to scale, particularly from the $270 million acquisition of the Queensland-based Seachange portfolio of lifestyle communities late last year.
“A softer result than we had expected following a material step change in business scale following the acquisition of Seachange and Caravan Parks of Australia portfolio during the first half but cycling some challenging conditions from lockdown perspective on development and tourism,” Mr MacFarlane said.
“The result implies a stronger second half skew, including development settlements with 475-plus lot target maintained (implies 336-plus in the second half).”
First-half residential lot settlements rose slightly from 136 in the same period a year earlier and down from the 214 settled in the final six months of FY21.
The shares were little changed on Tuesday morning, down 5¢, less than a percentage point, at $5.46.
Ingenia said a “strong” second half of settlements was underway, having received deposits or contracts on 507 homes. The company has 4831 revenue-producing sites in 34 communities across east-coast Australia up from 3269 in 19 communities at the end of December 2020.
The company’s retiree-focussed Ingenia Gardens portfolio rose to 1437 units in 27 communities from 1377 in 26 communities a year earlier.
It said strong tailwinds were driving demand for the company’s holiday business, which grew to 4240 sites by the end of December from 2836 a year earlier on the back of acquisitions such as the $37 million purchase of the BIG4 Beacon Resort on Victoria’s Bellarine Peninsula.
“Whilst construction does remain a risk and industry-wide supply chain challenges persist, we are tracking well to grow settlement volumes, with 15 projects now underway,” chief executive Simon Owen said.
“Pleasingly, Ingenia’s holidays business is experiencing strong demand and forward bookings are up materially on the prior year, providing a positive outlook for holiday parks across our key markets of NSW, Queensland and Victoria.”
Rising land prices and higher revenue streams pushed up the value of its investment properties by 44 per cent to $1.7 billion.
“An expanded asset base following the integration of over $700 million of acquisitions in FY21 and FY22 year to date, CPI [inflation-] linked rents across residential communities, and strong forward bookings for the holidays business, will significantly increase revenue from operations in the second half,” the company said.
Ingenia declared a 5.2¢ dividend, up from the 5¢ it paid a year earlier, payable on March 24.
