Thank you for standing by, welcome to the Ingenia Communities Group 1H21 Results Presentation. All participants are in a listen-only mode. There will be a presentation, followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Simon Owen, CEO and Managing Director. Please go ahead. Good morning, everyone, and thanks for your attendance today. I am really excited to be presenting another strong result underpinned by doing the basics well, focusing on our residents and guests, recruiting and developing the best industry talent, growing our rents, increasing occupancy, selling homes, and being vigilant on our costs. COVID has required us as a business to rethink our priorities and our operating model. The overwhelming focus has been on prioritizing the safety and wellbeing of our residents, our guests, and our employees. We have deployed new ways, primarily utilizing digital channels of engaging with our customers and seeking to build market share. Through COVID, we have continued to develop, acquire, and grow. On occasion, this seemed counterintuitive to the status quo. As recently as last Friday, continual border closures and state lockdowns impede consumer confidence in booking interstate holidays. However, we have clearly fared better than most businesses. Our Holidays communities have boomed since the September school holidays, and our rental communities are operating at record levels of occupancy. It is also evident that most capital city and key regional residential property markets are experiencing strong demand and price growth, of which we are a beneficiary. Consequentially, the group has decided to voluntarily hand back one-third of the JobKeeper supplement we have received in the current financial year, representing approximately AUD 1.7 million. I would also note that we have not received JobKeeper since the end of September, and any JobKeeper receipts will be excluded from the calculation of any executive bonuses payable this year. There are some great highlights which we announced today. Record revenue of AUD 122 million for the first half. Our earnings before interest and tax was up 25% to AUD 40.3 million, and our operating cash flow was up 110% to AUD 59.7 million. We have started the year with a flurry on the acquisitions front. To date, we have settled AUD 105 million in stabilized communities and land and have a further AUD 40 million of acquisitions under contract, which are yet to settle. In addition, we have a significant pipeline of acquisition opportunities under due diligence or advanced negotiation and expect to be announcing several more acquisitions in the coming weeks, including one of the largest and most premium lifestyle communities on the East Coast. On the basis of the deal flow that I presently see in front of the business, and I was personally out doing due diligence inspections last week, I'm confident that the proceeds from the May 2020 capital raising will be fully invested in the coming months, and our LVR will be within our target range of 30%-40% by the middle of the year. Before we go into the details, I'm just going to make a couple of opening comments on what we are currently seeing in the sectors and markets within which we operate, as well as our strategy moving forward. The housing market is, by and large, booming in Australia, and at the end of January, reached a new record high, fueled by low interest rates, limited supply, pent-up demand, and rising consumer confidence. In the first two weeks of February, Ingenia experienced our strongest ever demand, where we achieved 36 net sales at a rate of nearly three new sales per day. As of Friday, the 12th of February, we have recorded 162 new home settlements and have a further 296 contracts and deposits on hand. However, it is not a uniform surge. It's an owner-occupier upswing with growth led by first home and changeover buyers, encouraged by a heady mix of federal and state-based stimulus. Detached housing in lifestyle locations seems increasingly preferable, and regional markets are seeing price growth of at least double that of capital city stock. Demand for units has diminished through COVID amidst low levels of investor participation, changing living preferences, and an absence of offshore buyers. A surge in residential housing prices is a double-edged sword for Ingenia. On the positive, there is clear confidence, strong liquidity, and a sense of urgency to transact. Balanced against that, however, is the possibility that some homeowners will inevitably wait out in the current market and seek to maximize any possible price gains before transacting, particularly if they are seeking to downsize or cash out some equity in the family home. Our holiday business is also strongly benefiting from border closures and holiday parks, which are located within a two to three-hour drive of key population centers, are seeing the biggest upswing in demand as many guests are planning shorter, more regular trips. Our Ingenia Gardens seniors rental business is also trading very strongly, with residents placing additional value on safety and security. Occupancy in that business closed at the end of January at 96%, which is up around 400 basis points on pre-COVID levels. Our strategy as we emerge from COVID remains unchanged. Our business is underpinned by owning land and collecting rent. We presently have 9,277 income-yielding homes, cabins, and sites, which is up 26% on the prior year. That number continues to grow every week as we settle new homes, integrate acquisitions, and add new rental and tourism cabins across the portfolio. Every week, we collect more than AUD 2.1 million in rent, with a significant component underwritten by the government. Rent collections were completely unchanged through COVID. Our strategy is based around growing an increasingly deep pool of rental income that gives our business fantastically predictable weekly cash flow. Today, our core bottleneck remains finding the land and accessing the necessary approvals. Our sector is supply-constrained, and the demand is escalating. Every day, some 700 Australians turn 65, and that will continue for the next 30 years. Furthermore, approximately 70% of Australians aged over 65 own their home outright with no mortgage, but many have limited or no savings beyond the equity in the family home. Ingenia is in a great position today, with strong tailwinds supporting our key Lifestyle, rental, and Holidays platforms. We are well-capitalized, have great capital optionality with our funds management platform and our development joint venture with Sun Communities, and deep industry knowledge residing within the board and management team. Joining me on the call today are a number of the Ingenia executive team, including Scott Noble, our CFO, Natalie Kwok, who heads up our acquisitions team, Nicole Jentz, who is our Interim General Manager of Residential Communities, and Donna Byrne, who heads up investor relations. This is Nicole's first results call today, please feel free to direct any tough questions to her. With that, I'll now hand over to Scott, who is going to talk through the financials and capital management. Thanks very much, Simon. Good morning, everyone. I'm pleased to present Ingenia's 2021 interim result. The group delivered 136 turnkey settlements in the half, four down on the prior period, with 128 settlements recorded within Ingenia and eight recorded within the joint venture with Sun Communities. The highlight of the interim result was the operating cash flow, up 110% on the prior period to AUD 59.7 million. This growth was driven by the group's growing rental base, strong second quarter tourism result, and positive working capital movements from reduced inventory and increased tourism deposits held. Revenue increased 4% to AUD 122 million and EBIT increased 25% to AUD 40.3 million. These improvements were driven by growth in our lifestyle rental income and strong second quarter from our holidays business, which were partly offset by a decline in our development earnings from lower settlements. Pleasingly, stabilized EBIT margin grew 320 basis points. Underlying profit increased 24% to AUD 32.8 million, with underlying EPS declining 6% to AUD 0.101 per security as a result of the increased securities on issue from the May equity raising, where the funds raised were not fully deployed during the period. Statutory profit increased 38% to AUD 32.5 million, and statutory EPS grew 5% to AUD 0.10 per security. An interim distribution of AUD 0.05 per security has been declared. While this is an increase in the final FY 2020 distribution, it's a decline on the same period last year as the group focuses on preserving capital to internally fund growth. Turning to slide seven. While the result was impacted by COVID, Ingenia delivered a 25% growth in EBIT from the prior year and continued to grow stabilized margins across the group's core lifestyle and holidays and Ingenia Gardens businesses, delivering continued scale improvements, which offset the decline from the development result. Please note, the EBIT result includes AUD 5.1 million of JobKeeper that partially offset the impact of COVID on the business from lost revenue and additional costs. As mentioned by Simon, AUD 1.7 million of JobKeeper will be returned to the government due to the recovery of our holidays business and improved outlook. At the segment level, Lifestyle and Holidays EBIT increased 39% to AUD 22.5 million, with the Lifestyle and Holidays stabilized margin improving to 42.1%. Lifestyle Development EBIT declined AUD 1.7 million on the prior year due to lower settlements. This decline was offset by the growth in fee income from the development joint venture with Sun Communities, as the joint venture's first development of Freshwater progressed and asset acquisitions completed. Pleasingly, at 31 December, sales deposits and contracts on hand grew 29% from what we were holding at 30 June, providing good visibility on the group's second half earnings. Ingenia Gardens continues to deliver strong cash flow and improve margins, ending the half with record high occupancy of 96.4%. Turning to slide eight on capital management. Ingenia continues to have a strong capital management position from which we'll be able to grow the business. At 31 December, the group's LVR was 14.7% compared to our covenant of 55. Weighted average debt maturity was 2.8 years, and the average cost of drawn debt was 1.9%. Last week, we announced the group had entered into a new seven-year, AUD 75 million debt facility with the Clean Energy Finance Corporation. This facility increases the group's debt maturity profile and diversifies the group's debt sources, taking our total available facilities to AUD 525 million. As part of the CEFC facility, the group has formalized our energy and carbon reduction commitment, delivering on our sustainability objectives. The group's February 2022 debt maturity refinance is also well progressed. Slide nine provides an overview of the group's asset valuations of its investment properties. At 31 December, we had 20 assets independently valued. The average capitalization rates of our Lifestyle and Ingenia Holidays portfolio fell by 19 basis points over the half to 7.13%, with pure lifestyle communities dropping 24 basis points to an average of 6.29%. Transactions of high-quality lifestyle assets continue to transact at levels well below what our assets are recorded at. The improvement in the group's lifestyle asset cap rates has offset fair value declines from writing off of transaction costs on new acquisitions and the reduction in development value from the realization of development profits on discounted cash flows. While holiday parks are performing well and the outlook for them remains extremely positive, we are not seeing any material reduction in holiday park cap rates. Our Ingenia Gardens portfolio valuations were positively impacted by higher average occupancy. The average capitalization rate for this strong cash flow portfolio still remains an outlier in the property sector at 9.65%. Thank you very much. Simon. Thanks, Scott. We might now move into operations, so moving on to page 11. Ingenia today owns outright 40 Lifestyle and Holiday communities, including 4,327 occupied permanent sites, which is up over 17% on 12 months ago. This has been achieved through a combination of acquisitions, development, and community expansions. Moving on to page 12. Total income from our Lifestyle and Holidays business was AUD 48.3 million for the half, up 18% on the prior year. Our earnings before interest and tax for the first half grew by 39% to AUD 22.4 million. We've been able to further improve the operating margin by another 170 basis points out to 42.1% with further growth to come. The margin expansion is really being driven by a combination of rent growth and scale leverage as our revenues grow at a faster rate than our costs. We were also able to grow our rents on a same-store basis by around 2%, up to AUD 187 per week. That was through a combination of contractual rent increases, rolling market reviews, and rent resets when homes turn over. Rent growth has been impacted by state government-imposed rental pauses in Victoria and Queensland, as well as lower CPI and general COVID sensitivity. Just touching on to Ingenia Holidays, which is on the next page 13. The first few months of the financial year remained sluggish, particularly as many interstate borders remained closed. The market bounced sharply leading into the September school holidays and has remained incredibly strong since then. Current year receipts to date, plus forward bookings through to 30 June 2021, are up over 13% on last year's full-year result. We still have a further four and a half months left to capture additional bookings. I'll now move forward to our Funds Management business, which is covered on page 15. Funds Management will be a key growth driver moving forward as we look to launch a new AUD 100 million fund later this year. Funds Management provides Ingenia with additional capital flexibility in terms of how we fund our growth. It's highly accretive to earnings. We also retain a last right of refusal over the communities within each of the existing funds, should the funds ever be wound up. Moving through to Development on page 17. Home settlements were slightly down on the prior year due to delays associated with COVID. As of the 12th of February, we currently have 162 new home settlements, plus a further 194 deposits and contracts on hand for this current financial year, and a further 102 deposits for next financial year. The reduction in reported earnings and margin are primarily related to home settlement volumes, which are expected to recover into the second half. I'll now close on page 22. Given the steadily improving trading conditions we are experiencing, the group is pleased to reinstate guidance with earnings before interest and tax growth forecast at 15%-20% and an AUD 0.01-AUD 0.02 decline in underlying earnings per share. The reduction in underlying earnings per share is a result of the timing difference between issuing additional securities in May 2020 and deploying that capital into the acquisition of new communities and development land, which will be complete by June this year. That's all Scott and I were going to present today, so we're now delighted to hand over to Q&A. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Michael Peet from Goldman Sachs. Please go ahead. Hi, Simon and Scott. Congrats on the result in difficult times. Just on the guidance, can I just clarify, the minus AUD 0.01-AUD 0.02, does that include JobKeeper? Yes, it does, Michael. Okay. Then the handback of AUD 1.7 of JobKeeper, has that already occurred, or is that going to impact in the second half? No, that's going to occur in the second half, Michael. It's not in our results for the first half, but it's in our guidance for the full year. All right, great. Just the margin uplift that is excluded on a stabilized, excluding any JobKeeper, is that margin increase there 320 basis points? That's correct. Yeah. Okay, great. What sort of settlements are you expecting? Are you expecting those to ramp up in the joint venture in the second half, or how's that looking? Yeah, Michael, we are expecting a bigger uptick in the second half from the joint venture, and likewise from Ingenia. Heavily weighted to the second half. Yeah. Okay. You called out, obviously, in a rising price environment, maybe some people might hold on and things. I'm just trying to get a sense of what you think is coming through, or the demand that's out there versus how you're going to convert that from inquiry, sales to settlement in the current environment. It just sounds like it's a little bit harder than maybe you thought to ramp those settlements up. Michael, I think as I noted, as of last Friday, we recorded 162 new home settlements, and we have a further 194 deposits and contracts on hand relating to this financial year. We still would have at least two months to convert additional customers who are capable of settling prior to 30 June. I think we have great visibility in front of us at the moment on what settlements for the current financial year are going to look like. Could you give us a sense of the stock homes that you have maybe for walk-ins or anything like that, or are you still building really to order? No, apart from Victoria where we've paused construction just to the basic shutdown of the industry down there, we've continued to build homes in some communities as quickly as we can, like up at Hervey Bay, Latitude and Plantation. Yeah, Michael, I'll maybe point you to the property book. We actually do call out at 31 December per project what were available and unsold at each project. Okay. Yeah. Just looking at the margin increase again, just on the lifestyle and holidays business, 170 basis points you called out there from the EBIT margin expansion. Could you give us a sense of how to split that between, say, permanents and the short stay side of the business? I'd like to get back to you on that one, Michael. We obviously had certainly a big uptick in that second quarter from holidays. We also had improved scale coming through from the additional acquisitions and then from the development sites that settled. I don't have the exact details to split that out, that margin, but happy to work on that offline. I imagine that margin should continue to head up. I mean, albeit holidays, it'll remain tight for the short term, absolutely. Yeah, obviously on the operating side, you're going to be banking those permanently for the permanence, pardon the pun, I guess. That's the way to think about that margin increase. It should keep going up? Yes. That's the way we look at it. Brilliant. Thank you. Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from James Druce from CLSA. Please go ahead. Yeah. Good morning, guys. Just to follow up on the settlement story, just wondering if there's any skew in terms of price as well coming into the second half? Can you just remind me of the sales rate you were doing? I think you mentioned something in the prepared remarks. Hi, James. Can you just repeat the question again? Just wondering if there's a skew in terms of the average price at all you're looking for in the second half, just following on from the earlier question. Also just on the sales rates that you're achieving. I think you mentioned something in the prepared remarks. Can you just repeat that, please? Yeah. In terms of the sales prices that we're achieving, I would expect there will be some modest growth in the low to mid-single-digit figures as we increase our home prices in line with what is going on in the broader residential market. We will sell out of our Latitude One community this financial year, and we are probably another 12-18 months away from starting the 170 home expansion of that next door. There will be a mix change, as there will be no Latitude One homes to sell into the next financial year. In terms of the sales velocity, if you look back over the last three or four years, we typically, in terms of new home settlements, have a one-third, two-third split between the first half and the second half. We have great visibility, probably the best visibility we've had on settlements for 30 June for some years. I think the numbers you're referring to is that we have 162 new homes sold or, sorry, new homes settled as at February 12, and we have another 194 deposits and contracts on hand for residents who intend to settle this current financial year. I do think that we're basically in the middle of February, so there's plenty of time for prospective residents, particularly given the days on market we're seeing at the moment, where it's not uncommon for residents to be able to list their homes in key coastal markets like Port Stephens or up at Coffs Harbour or up in Hervey Bay, and their time on market's less than 30 days. There's still effectively the best part of another two months for us to convert prospective residents and have them settle before 30 June. I think we're in a pretty good position at the moment. Yeah. I thought you said something, put some numbers out in terms of sales per week at the moment. I was just saying- Follow that up. sorry. In the first two weeks of February, we were taking just under three new deposits a day, which is the highest we've ever achieved in the business. February is traditionally a very strong month for us as people often have conversations with their mom and dad over Christmas, and then once the school holidays are finished, February is traditionally a very strong month for us. This February in particular has been incredibly strong. Okay, that's clear. Just on guidance, you said you're gonna deploy most of the remaining equity. Just wondering if, by 30 June, just wondering if that is in guidance and can you give a feel for how that capital is gonna be deployed across tourism, lifestyle and greenfield acquisitions? Yeah. Thanks, James. Yeah, good question. Yes, we are forecasting some acquisitions in guidance that we are very close to transacting on. We haven't announced them to date. In terms of mix of those acquisitions, number one priority is our lifestyle, pure Lifestyle assets. We are also looking and undertaking due diligence on some holiday assets. Okay. What's left to deploy? Can you just remind me, please? Look, we're at a 14% LVR. Our target LVR is 30%-40%. Yeah, we have certainly capacity in the business to grow that up back to that standard, the target LVR level. In terms of the actual equity that we raised, which was AUD 178 million, we have, I think, announced today that we're at AUD 145 million of that has been deployed this financial year. James, to clarify, we would have additional capacity over and above what we've settled to date, plus what's contracted but yet to settle of around another AUD 100 million-AUD 120 million. That would see us at the lower end of our target gearing range. Okay. That's clear. Do you have the OPEX numbers for the year or for the half, sorry? Yeah, sure. Our operating capital, we had obviously AUD 24 million of spend on CapEx during the half. In terms of what was operational CapEx, that was AUD 3 million. We had approximately AUD 6 million invested into refurbs and new cabins at our rental and tourism parks, with about the balance in earthworks on our developments. In the full year, we're targeting total spend in that AUD 50 million-AUD 60 million range, which we'll see it tick up a little bit more from the first half to the second half. Okay. Just wanted to check, do I hear you correctly? You're saying same-store, I suppose, is how you put it, NOI growth on your lifestyle and tourism assets was 2%? I said the same-store rent growth in our Lifestyle of 2%, which is a little bit lower than what we've reported in the past. We have a range of contracts that some of them are CPI plus a% or CPI plus a fixed rate. With the lower CPI, that rent growth has been a little bit more muted than what we've seen in the past. Secondly, there's a moratorium in Queensland and Victoria on our ability to increase rents. Effectively in those states, unless a home's turning over, we can't just enact a rent increase. Lastly, we have been, I guess particularly in some of our more affordable lifestyle communities, been conscious of our residents and have been, I guess, a little bit more muted in the current environment in how we have approached rent growth. We've still been able to extract 2% same-store rent growth. Okay. That's it for me. Thank you. Thanks, James. Thank you. Once again, if you wish to ask a question, please press star one. Your next question is a follow-up from Michael Peat from Goldman Sachs. Please go ahead. Maybe just following on from that. On the holiday side, could you just comment on what rates you've done there, nightly rates and occupancy, and how that's looking in the second half? Sure. Ben, are you there? I am, Simon. Yep. Ben leads our holidays business, so maybe, Ben, it's a good opportunity for you to answer. Absolutely. We've seen really encouraging rate growth. Our blended cabin and site average rates increased by 12.6% up to AUD 93, and we'd expect that to continue to grow. We have obviously ebbed and flowed around some of the COVID restrictions, but our forward holdings, as Simon mentioned earlier, are really strong. We're currently up AUD 4.7 million for actual holdings for this full year result. Okay. Occupancy, how's that running out on average across the portfolio? Obviously, it's a mixed bag. Our cabin occupancy is now up to 66%. Sites are tracking at 34%. Seeing marginal increases there, but our forward rate growth is certainly holding us in good stead. Certainly, the colder months, our cabins see the benefit, but we're seeing slight growth beginning to grow through the summer months. I guess as we head into the cooler months, at least in the south, do you expect to hold some significantly higher occupancy versus normal or pre-COVID conditions? Also maybe just finally, how is Cairns shaping up given it's a winter destination? Yes. Certainly, our forward holdings are currently up 22%, so AUD 2.5 million over the forward 12 months. Even through winter, we're seeing incredibly strong demand from the domestic market. Cairns is performing really well coming out of a slow start in the first half. We're seeing above budgeted results for January, February. Our forward bookings there, again, sitting about 20% above average for the remainder of this financial year. Excellent. Thanks, Ben. Thanks. Thank you. Your next question is a follow-up from James Druce from CLSA. Please go ahead. Yeah. Hi, guys. Just also after some color on the second half, and just thinking about guidance. It seems that the EPS guidance provided is not keeping up with the EBIT growth. I appreciate that the shares on issue, but I think that's pretty well known. Is there anything in the interest cost line or the taxes that you'd call out for the second half? Yeah, James, that's a good question. Obviously, as we're investing capital, we'll expect the second half interest to grow, obviously, higher than the first half, and there'll be more capital invested. In terms of the tax rate, the average tax rate has ticked up a bit in the first half, and we expect that to continue in the second half. That's really driven by lower interest rates on our cross-staple loans, which are basically increasing the taxable income in the group. Separately, the growth in tourism that we're forecasting comes with a 30% tax rate as opposed to the average tax rate. Okay. That's clear. Thank you. Thank you. There are no further questions at this time. I will now hand back to Mr. Owen for closing remarks. Thanks, everyone, for dialing in today. Donna and Scott and I will be available to have a chat later today or over the next couple of weeks. We'll be coming out and meeting with investors over that period of time. In summary, I think Ingenia has got a really strong period of growth ahead of us. There's considerable momentum established within the business. Demographics remain incredibly supportive, and we have an amazing acquisition and development pipeline in front of us. With Sun Communities and our funds management platform, we have some great capital partnering initiatives in place. I think the underlying thesis of providing affordable community living for seniors who are downsizing out of the family home but were looking to top up the pension remains a really attractive market space to be in, and we see the outlook for the business as being strong moving forward. Thank you very much for your time today. That does conclude our conference for today. Thank you for participating. You may now disconnect.