Ingenia Communities Group (ASX: INA), formerly known as ING Real Estate Community Living Group, owns, operates and develops a diversified portfolio of senior rentals, lifestyle and holiday communities across Australia. Since its establishment in July 2004, the group now employs more than 700 staff to oversee operations across Ingenia Lifestyle, Ingenia Holidays, Ingenia Gardens & Ingenia Rental. Across all of its lifestyle communities, residents are entitled to use Ingenia Care – a complimentary concierge service to complement the living experience.
Reasons for Potential Opportunity
In its FY20 results released on 18 August 2020, Ingenia Communities Group reported an underlying profit of $59.1 million, a 25 per cent increase relative to the prior corresponding period. Additionally, group revenue climbed 7 per cent to $244.2 million, with earnings before interest and tax (EBIT) surging 17 per cent to $71.9 million. More notably, these results were fuelled by an increase in rental sites through acquisitions and development, higher average new home sales price as well as development margin and cost management across the Group. However, the upsides were in part offset by temporary holiday park closures as well as reduced settlements as a result of the COVID-19 pandemic.
Within the 12 months, Ingenia achieved 325 new home settlements across the Group’s development projects, 3 per cent lower than that of the prior corresponding period. The group was initially on its way to achieve a new record for settlements had operating conditions not been disrupted due to lock-down restrictions. Nevertheless, Ingenia achieved an underlying earnings per share of 22.1 cents, a 5 per cent increase relative to the prior corresponding period. This was primarily driven by strong lifestyle and development performance, impacted by additional securities issued as a result of the capital raising held earlier in the year.
Moving forward, the group’s acquisition pipeline remains strong with additional opportunities surfacing and due diligence being conducted on several established assets. Ultimately, the timing and composition of future acquisitions will impact its FY21 performance, with the remaining capital from the Group’s $178 million equity raise back in May 2020, expected to be deployed progressively over the next 1 – 1.5 years. Even as the firm failed to provide a FY21 guidance, Ingenia remains in a good position as it concluded the financial year with a balance sheet that provides significant support and capacity. This is evident through the 50 per cent increase of the group’s net assets with Net Asset Value per security climbing 9 per cent to $2.90.
Simon Owen | Chief Executive Officer
Simon assumed the role of Chief Executive Officer in November 2009. He boasts more than 20 years’ experience working in ASX-listed groups with roles across mergers and acquisitions, funds management, finance & sales and development. Before joining Ingenia Communities, Mr Owen was the CEO of Aevum, a formerly-listed retirement company.
Jim Hazel | Non-Executive Chairman
Mr Hazel boasts an extensive corporate career in both the retirement and banking sectors. He was appointed to the Board in March 2012 and was previously the Managing Director of Primelife Corporation Limited. As a Director of Bendigo & Adelaide Bank Ltd, Mr Hazel holds a Bachelor of Economics degree and is a member of the Investment Committee.
Fundamental Performance Indicators
|Per Share Statistics||FY16||FY17||FY18||FY19||FY20|
|Investment Income (m)||0.70||0.83||0.91||1.00||0.91|
|Cash Flow ($)||0.14||0.17||0.23||0.26||0.25|
|Net Profit Before Abnormals (m)||19.70||26.70||36.90||48.30||65.30|
|Rental Income (m)||57.70||70.00||86.50||89.80||94.50|
|Other Income (m)||49.80||80.10||103.20||138.90||149.70|
|Net Gearing (%)||70.30||36.50||42.50||37.00||7.90|
|Dividend Yield (%)||3.20||3.90||3.50||3.50||2.20|
|Capital Structure||Cash ($m)||Total Debt ($m)||Equity ($m)|
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