The Victorian-based land lease operator recorded 253 settlements in the 12 months to 30 June 2020 – a drop from its usual 270 to 310 – while its after-tax profit fell 22% on the previous year to $42.8 million.
However, the hit was partly offset by a 25% increase in annuity income – from $22.4 million up to $28.1 million – from site rentals and deferred management fees (Lifestyle charges a 20% DMF unlike most other LLC operators).
Shareholders will also receive a final fully franked dividend of 2.5 cents per share – bringing the total dividend for the year to 5.5 cents, the same as the previous 12-month period.
Managing Director James Kelly acknowledged the year had been a “difficult one”.
He blamed planning delays and road access issues, and new home settlements taking longer to settle because of the changing conditions in Victoria’s housing market for the lower than expected result.
Lifestyle Communities purchased four new community sites with a pipeline of 1,957 homes in FY19/20 and says it is well-funded to buy at least two more sites per year with its debt facility with CBA, NAB and HSBC recently increased by $50 million to $275 million.
Mr Kelly acknowledged that the settlement of these new homes will depend on easing restrictions, saying the operator has the capacity to deliver another 900 to 1,100 in the next three years but this may be impacted by the ongoing uncertainty in Victoria.
But Mr Kelly said he was optimistic that settlements will pick up post-pandemic.
“The easing of restrictions in June led to an immediate increase in enquiry back to pre-COVID levels, which gives us confidence that demand will quickly pick back up when restrictions lift again,” he said.
He added that rates of referrals from existing customers have also remained high.
Lifestyle Communities now has 22 communities in planning, development or under management with 4,494 home sites across Victoria.