Thank you for standing by, welcome to the Ingenia Communities FY23 results teleconference and webcast. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you would like to ask a question, you will need to press the star key followed by 1 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. Thank you for joining us today. I'd like to make a few opening comments before jumping into the presentation. The past year has been an incredibly challenging period for Ingenia. 30 June could literally not come around soon enough. We know that it'll take some time to earn back your confidence, which we are determined to do. The commencement of a new financial year provides us with the opportunity to hit reset, to establish new targets and take stock of market conditions. We started last year experiencing chronic labor shortages across many of our development projects, which crueled our ability to deliver new homes in a timely manner. Build times extended to over 30 weeks per home. This continued until March 2023. Once homes did start to get delivered in volume over the last quarter, the impact of 12 interest rate increases had taken their intended impact on the housing market, and prospective purchasers became hesitant to commit to the sales journey. For the first time in over 3 years, we had to aggressively utilize incentives to drive settlements. However, there are also many positives to report for the year. Our rental communities are reporting both record high levels of occupancy and strong rental growth. For many capital cities and regional towns, it is often near on impossible to secure a rental accommodation, and it's quite likely that this will only get worse over the coming years. Yesterday, I was visiting our 3 rental communities down in Melbourne, which are located in Chelsea, Frankston and Carrum Downs, and across over 500 rental homes, there is not 1 vacancy. Each community has a deep wait list. We have approvals in place to add another 50 homes, which we will commence to roll out in the coming months. Our tourism business continues to boom as many families grapple with rising living costs. Affordable domestic travel will likely become a key beneficiary. The vast majority of our holiday parks are now also pet-friendly. Qantas couldn't be doing a better job in promoting the benefits of a self-drive family holiday. The key demographic drivers that underpin our business model remain firmly in place: an aging population, a housing affordability crisis, the population drift to the regions, and buoyant demand for domestic travel. We are enjoying strong pricing power and have inbuilt inflation protection. We are enjoying increased demand from changing work and migratory habits. We are making solid progress on our sustainability goals, including our emissions reduction program and the creation of more sustainable communities. We are at an important nexus in our development business. The pendulum has clearly swung back in our favor, with a multitude of mid-tier builders now chasing our projects. We are a tier one development brand and have worked hard to secure a strong reputation as a partner of choice with quality builders up and down the East Coast. This should not be underestimated in terms of the positive impact on our business over the next three years. Over the past six months, my foot has been hovering over both the brake and accelerator in terms of commitment to more build starts due to the incredibly challenging macro factors at play. We are still at a nascent turnaround period, the supply complexities of the past 12-18 months have faded, and I can see some clean air. In recent weeks, we have actively committed to commencing dozens and dozens of additional homes across at least five projects. We started the year with approximately 58 homes, with another 240 or so under construction, and leading into Christmas, can readily see us committing to another 250+ homes. The resi market is incredibly challenging to read, with many push and pull factors. As I travel from site to site, the pickup in activity and the renewed confidence from our sales team is clearly visible. In my position, I'm able to have both insight and perspective from my numerous touch points with industry players, from planners, builders, local councils, and analysts. The residential market is tightly poised, and the X factor that has been missing is consumer confidence due to the barrage of interest rate increases. We saw further evidence several weeks ago that the RBA is likely not far from peak rate, and the nature of the Australian residential market is that buyers will not want to miss out on the next property run. We have seen this time and time again, and Ingenia is well positioned to be a key beneficiary. As confidence builds for people to sell and downsize, we have a multitude of communities in highly desirable coastal locations at various price points to meet what I fully expect to be a significant pickup in demand. We remain cognizant to what is playing out globally, which could change everything overnight, but also highly attuned to the fact that there are some 300,000-400,000 people coming every year to Australia, and they all want a place to live. Many purchasers are spooked by the prospect of their builder going broke mid-project. We read and hear about the terrible stories every day. Having a small level of available homes is an absolute positive, especially when combined with busy development sites, to where our prospective customers can now see upwards of 50 tradies at work, constructing literally dozens of homes at every community and market we have. This gives our purchasers considerable confidence to proceed as they are contracting with Ingenia. This year, we have commenced more communities than ever before, including Bob's Farm and Fullerton Cove on the New South Wales Mid North Coast, our Victoria Point community in Brisbane's eastern suburbs, our Millers Glen community in the Queensland Scenic Rim, Bargara on the Queensland Capricorn, and most recently, Australia's largest DA-approved lifestyle community, which is one hour north of Sydney at Morisset, which I toured last week with the chairman. These projects are forecast to materially drive settlements and earnings growth over the next three years and will underpin our revised three-year settlements target of 1,600 to 2,000 new homes. At its essence, Ingenia's business is underpinned by owning land and collecting cash rent. A significant component of this rent is supported by Age Pension and rental assistance payments. This is supplemented by low risk, high velocity, and profitable development of regional and out-of-metro lifestyle communities geared towards the rapidly growing number of downsizers and young retirees across the East Coast. I should also mention that overnight, we executed agreements with our development partner and largest shareholder, Sun Communities, to extend our development joint venture for a further 7 years. This is an incredibly exciting announcement, many months in the making, and highlights the close relationship that exists between Sun and Ingenia, and we greatly look forward to working closely with Gary Shiffman and his amazing team over the next seven years as we develop and operate some of the most iconic lifestyle communities on the Australian East Coast. Joining me on the call today are a number of Ingenia's executive team, including Donna Byrne, our General Manager of Investor Relations & Sustainability, Natalie Kwok, our Chief Investment Officer, Karen Landy, our General Manager of Corporate Strategy, and Vaughan Slater, who heads up our development business. I would like to especially acknowledge the great job that Karen did as acting CFO over the past 8 months during a really challenging period. I would especially like to warmly welcome our new CFO, Justin Mitchell, who joined the business last month. Nothing like stepping in as a CFO 6 weeks before results. I'll ask Justin to introduce himself and talk to the financials shortly. I'm now going to step forward onto slide 2, which is called Executing on Strategy. Over the past year, we have really focused on better execution within our development platform, improving our operational yields, looking at expansion of opportunities within existing communities, and proactively managing our balance sheet. Our holidays revenue was up by 36%, driven by continued growth in occupancy and rate, organic investments, and recent acquisitions. The domestic holiday thematic will be with Australians far, far longer than many of us are thinking, and Ingenia is strongly leveraged to this story. Our lifestyle community business now comprises 35 communities, either established, in development, or in planning, which now represents over 50% of our business. We have a development pipeline of some 5,775 new home sites, one of the largest in the industry, which will underpin many years of profitable growth. We continue to focus on divestment of non-core assets to recycle capital. In addition to divestments announced to date, we have over AUD 80 million of non-core communities or land under conditional contract, offer, or due diligence. Our group continues to prioritize our ESG program, which remains core to our strategy and aligned with our vision, purpose, and values. We remain a leader in diversity and inclusion, and we are well advanced with our Green Star strategy for pending new lifestyle community developments. With that, I'm now gonna hand over to Justin to discuss in more detail the group's financial performance and capital management. Great. Thank you, Simon, and thank you for that introduction. Good morning to everyone on the line. Well, it's great to be back in the listed property space and in a sector that I actually feel very passionate about. It's also good to see so many familiar names on the call today and look forward to catching up with many of you over the coming days and weeks. You know, as Simon alluded to, I've now been in the CFO role for seven weeks, and I'm really pleased to be presenting my first results for the Ingenia Group. During the year, the Ingenia team has been focused on embedding the acquisitions completed during FY22. At year-end, we now manage or own 107 individual properties and 15,500 income-generating units. Let me start with the key financial highlights for the year end of June 30, 2023 on Page 5. As a result of the full year impact of the acquisitions I referred to before, and the continuing strong operational performance across our tourism and lifestyle rental portfolio, revenue grew 17% to AUD 394.5 million, with tourism increasing in total 31% and lifestyle rental increasing 39% to AUD 76.8 million. EBIT growth of 7.5% has been tempered by the challenges faced by our development division, as well as our support center and corporate costs increasing as a result of ongoing inflationary pressure and an investment in people and systems to support the expanded portfolio. Underlying EBIT, which was towards the top end of the guidance range communicated in February, declined 11%, impacted by the increased interest costs associated with higher cost of funding and increases in drawn debt levels. The Group's statutory profit and EPS declined as the benefit of our revaluation increments was significantly lower in the current year. This was due to softening cap rates and the realization of development profits on projects, which was, however, offset by stronger net operating income across the portfolio. A final distribution of AUD 0.058 per security has been declared, taking the full year distribution to AUD 0.11 per security, which is consistent with the prior year distribution. Moving to slide 6 on divisional EBIT performance. As previously mentioned, the lifestyle rental business delivered strong performance as a result of high occupancy, full year impact of the FY22 new home settlements, inflation-linked weekly rental increases, and the impact of 12 assets acquired during the prior year. Increases of circa 6.5% have been applied to rent reviews across the year, with higher rates applied to those in the latter half of the financial year. This resulted in a 34% increase in EBIT for lifestyle rentals to AUD 36 million. Our lifestyle development was impacted by the first half construction challenges that we've spoken to previously, which has now largely abated, and a slowing residential environment in the second half, impacting settlement. Together with higher portfolio costs associated with the growing active development pipeline, has resulted in lower current year development EBIT. Just focusing on Ingenia Gardens, which continues to see high occupancy and positive rent increases. However, it has not been immune to the inflationary environment, which has impacted not only wages, but our operational costs as well. This combined with the sale of two assets in Horsham and Tamworth during the year, impacted the portfolio, which declined 9% at an EBIT level. As Simon alluded to before, tourism has performed well with domestic holiday demand, enabling strong growth in occupancy and rate, coupled with the impact of acquisitions. This delivered a significant increase in the portfolio EBIT of 31% to AUD 46 million for the year. Capital partnership income reflects the group's ability to derive income from the rollout of our joint ventures, existing developments and the funds managed by the group. EBIT declined as a result of performance and acquisition fees recognized in the prior year, not recurring. With the Group's expanded asset platform, the expense base has increased across operational, support center, and corporate due to the full year impact of these acquisitions. This was also impacted by higher volumes across rentals and tourism, general inflationary pressures, including salary, insurance, rates and taxes, coupled with an investment across business in compliance and governance costs, increased investment in technology, resources, and systems, as well as ESG initiatives to support the platform for recent growth and also future expansion. I will now turn to slide 7, and I'd like to discuss and give you an overview of our balance sheet and capital management. The Group's balance sheet continues to be well-positioned, with an LVR of 31.4% as at 30th of June. We are well within our covenants and have sufficient funding headroom with undrawn facilities of AUD 147 million. These facilities have a weighted average debt maturity of 3.4 years, and our next maturity not due until December 2025. From a cost of debt perspective, we continue to manage this with approximately 53% of our drawn debt, either fixed or hedged, with a weighted average maturity of 2.8 years. At 30th of June, the average cost of our drawn debt, inclusive of margin, was approximately 4.6%. We have continued to recycle capital throughout the year with AUD 55 million divested. Combined with strong cash flow from our lifestyle, rental, and holidays business, we are actively managing the capital requirements of our development pipeline. Over the past few weeks, I've had the opportunity to meet with Ingenia's banking partners. It was great to hear they continue to have strong support for Ingenia and the sector more broadly, which is a positive from a future funding perspective as our portfolio grows. Finally, turning to Slide 8. Following a prolonged period of cap rate compression across the lifestyle, rental, and holiday assets, the cap rates across our portfolio have expanded from December 2022, by 14 basis points to 6.05%. Ingenia Gardens remains relatively stable. Despite this cap rate softening, overall, Ingenia has seen a slight uplift in our total portfolio value, driven by strong NOI growth, which was partly offset by the realization of development profits on our development projects. I will now hand back to Simon. Thanks, Justin. After 12 years, you didn't miss a beat. Let's jump forward to page 11 and discuss our Ingenia Lifestyle business segment, which comprises our core lifestyle communities and all ages rental business. We grew the revenue by 39% and segment earnings before interest and tax by 34% compared to the prior comparative period. Key drivers here were a first full year contribution from acquisitions, which closed in late 2021, organic investment in new homes, and strong rent growth. We're also able to broadly hold our operating margin in a high inflation market, which demonstrates the quality and resilience of this business. We have high quality CPI-linked rents, supported by government pensions and transfer payments, and Commonwealth Rent Assistance. Let's move to Slide 15, which is the first of a few development slides that I would like to talk to. We built and completed a record 458 homes for the year, including completing over 200 in the last quarter alone. This number would have been materially higher again, but for the severe issues we experienced with trade availability in the first 8-9 months of the financial year. We settled 374 homes for the year, with an average home price up 19% to AUD 487,000, this is as much a reflection of changing mix as it is of price growth. Margins contracted approximately 300 basis points when compared to FY22. Pleasingly, we're up nearly 1,000 basis points on the result recorded for the first half. This is predominantly volume related. Looking at Slide 16, I'd like to make some comments on our build times and inventory levels. Build times continue to slowly normalize towards pre-COVID levels of 18 weeks. Are currently running on average at 25 weeks, although this does vary significantly by project and by state. Construction cost growth is moderating. We are yet to see any meaningful examples of prices retreating. At 30 June, we had 58 completed homes. However, more than half of these were already deposited or contracted. We have not had any completed inventory for many years. Across 18 active projects, I believe our inventory levels are still very low. We have some 194 homes presently under construction, plus another third, 40-odd in the JV with Sun. We are watching this balance very closely. As I noted previously, it is a key topic of conversation internally about the timing and volume of new home commencements. Hopefully, the next few slides really gives you some perspective on the scale and momentum that is now truly underway at Ingenia. Slide 17 shows you the 14 projects in market where we are actually building and selling homes. Slide 18 shows you the 4 new projects which we have recently launched, including the largest DA-approved lifestyle project in Australia at Morisset, one hour north of Sydney. The chart on this slide also shows you that Ingenia has the largest pipeline of new communities projects in New South Wales compared to any of our peers. Slide 19 shows you some of the new and exciting projects which we are taking through planning and final design ahead of launching in the next 1-2 years. The combination of these three slides is how we intend to deliver on the 1,600-2,000 settlements over the next 3 years, with further growth beyond that. Touching on Slide 23, I'll just talk briefly about our holiday business. Holidays continues to perform strongly in the current environment, with earnings before interest and tax up 31% to AUD 46.4 million. Our margin was down 300 basis points, principally as a result of higher operating cost environment and some additional cost allocations to the holidays business. We have continued with a strong investment in organic growth into this business, including the addition of a further 38 holiday cabins and more than 30 annuals, permanents, and rental homes as we seek to diversify community earning streams. Touching briefly on our development partnership with Sun, on page 26. Today, we announced a seven-year extension to our development partnership with Sun. Terms are broadly the same, however, the key difference is probably now that Ingenia and Sun will jointly own stabilized communities for a five-year period before Ingenia has the right to exercise its 12-month option to acquire Sun's 50% interest. Sun has been a great partner for Ingenia over the past five years, especially through the COVID period, and we look forward to working closely with them over the next seven years. I'll now close on group outlook, which is on page 28. Our focus this year is on driving continued operational efficiencies, looking for cost outs, managing our balance sheet settings, and successfully launching and driving settlements across the 18 communities we now have in market. We are not providing a settlements guidance at this stage for FY24. In terms of financial guidance, in terms of EBIT, we are looking at 10%-15% growth in EBIT, and underlying EPS of between AUD 0.208 and AUD 0.223, which works out to be between 0% and 7.2% growth in underlying EPS on FY23. We see the opportunity to develop and sell between 1,600 and 2,000 new homes across the FY24-FY26 period. Over the course of the balance of this financial year, we have a significant number of high-margin, high-quality projects coming to market, which will drive the business forward. With that in mind, I'll now hand over back to the moderator. Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from James Druce from CLSA. Please go ahead. Yeah. Hi, good morning, Simon and team. Just curious about the capitalized interest policy. What are you actually capitalizing interest on? I noticed it's picked up from around AUD 3 million to AUD 9 million over the period, which is, you know, 1% of earnings. Yeah, James, it's Justin here. Maybe if I, I take that one. Obviously, our capitalized interest relates to the work we undertake on our investment properties, so a lot of the estate masterworks. So that's partly, I guess, given the fact that we're increasing the amount of development being undertaken, as well as the increase in our interest costs has resulted in an increase in, in the amount capitalized. All right. A couple of years ago, that was virtually nothing. I'm just wondering if anything has actually changed, because you have been increasing developments over time, naturally anyway. It's... Look, like, going back in history, I'm not sure, but my, my understanding is that nothing has, has changed. I think if you probably look at the% of the actual interest cost, as a proportion amount capitalized, that's probably a good starting point to understand, you know, the actual ratio that we capitalize. All right. That number this year is roughly gonna be flat or still increasing, do you think? Well, I would expect it to increase, probably, given the two main drivers of it, which is, one, our interest costs will no doubt go up as, you know, our level of debt increases as we continue to build out the portfolio. Right. Okay. Then just on the, the timing of the, the four new projects that you've got coming online, when, when are they due to actually start selling? Sure. Referring to those four projects, Fullerton Cove, yeah, we're selling in market there, and, you know, we would anticipate first settlements will occur in the last quarter of 2024. In terms of Morisset, the builder starts on site in October, and we expect first settlements in that project in the first quarter of FY25. In terms of Bargara, the builder has started on site, and we had our first slabs poured yesterday, and we expect, yeah, first settlements to occur in the last quarter of this financial year. In terms of Beveridge, we're still doing putting in the roads and civils and infrastructure, I would anticipate settlements in that project will probably be in the second or third quarter of FY25. You'll only see contribution from Bingara and Fullerton Cove, in this financial year. All right. That's, that's clear. Is, is there anything, any change in sort of mix to, to call out over 2024? I know you're not giving settlement guidance, but in terms of sort of price point, how should we think about that? Yeah, look, more and more of the new projects we're bringing to market are increasingly at a higher price point that's reflective of the coastal community. You know, I guess at Bargara there, you know, that is the only lifestyle community being developed on the East Coast of Australia that is actually oceanfront. And so, you know, the homes there will be ranging from, you know, in the low to mid AUD 600,000s, up to, you know, north of AUD 1 million. Fullerton Cove, the homes there will be, you know, ranging from, you know, low to mid AUD 700,000s through to, you know, AUD 1.4 million-AUD 1.5 million. So, you know, most of our new projects that we're bringing to market are gonna be in that sort of, you know, AUD 600,000-AUD 800,000 range. You know, there are a couple of exceptions to that. Our project in Beaudesert, which is Millers Glen, that project there, you know, homes are from the low 4s through to low 6s, so that's probably a bit of an exception. You know, most projects are at a higher price point. James? Okay. That's great. That's great color, actually. I've, I've got one more question, if I can be greedy. There's a few more, but I'll, I'll just end with this one. In terms of, of sales rates, I think you mentioned you've got 324 deposits on hand, and I think you had about 288, I think that was around the 4th of July. Is that sort of how we should be thinking about the sales rates over the past month? No. This is the, you know, quietest period of the year in the residential market, is winter. Next week, when we step into spring, we expect, you know, the market to really start to take off. As people, you know, come out of, you know, being buttoned up in the family house. You know, we would expect that for Ingenia, and I wouldn't expect it would be any different to whether you're a traditional resi developer or any of our peers, is that, you know, the run home from here to Christmas is our peak sales period for the year. You know, we would expect to, you know, finish this calendar year with a materially higher, you know, number of deposits and contracts on hand, offset by however many homes we expect to settle in the first half of the year. Right. That's clear. Thanks very much. Thank you. Your next question comes from Tom Bodor from UBS. Please go ahead. Good morning, Simon and Justin. I was just interested in the lifestyle rental margin, which was consistent or stable, despite a big increase in numbers of communities that you own, having acquired a lot recently, and that was around that 50% mark. I was just wondering, incrementally, do you think that is your sort of margin at which you add communities, or should you be able to get that over 60% in time? Yeah, Tom, that's. Speak to. Yeah, look, I think there's definitely some growth in there. Whether we can get that to, you know, to 60%, that will be, you know, remain to be seen. I would think there's at least another, you know, 300 or 400 basis points in that. You know, we are operating in a, a higher inflationary environment at the moment, and, and so, you know, after labor, you know, other key costs for us include utilities and, and the consolidated council rates that we pay. We're seeing, you know, increases of 15% per annum is not uncommon. And that sort of is, even though that might only be, you know, 10% or 15% of the entire cost base of running the community, that, that is really tempering or crueling the otherwise very strong rate growth, rent growth that we are getting through those communities. You know, we expect those increases to, you know, to moderate. The new communities we're bringing online are increasingly, you know, far more self-reliant, reliant than some of the older communities that, you know, we purchased or we developed, you know, a decade or two ago. Yeah, it, it is a challenging environment at the moment. You know, there is significant, you know, cost inflation that we are exposed to across the business. Okay. That's, that's very good and helpful. Thank you. In terms of just your divestment program, you've got AUD 80 million that is in advanced DD or IOI or whatever. Are you going to sell more beyond that? Or once those are sold, are you sort of cleared of your non-core assets? Yeah, look, I would anticipate that most of that AUD 80 million will be divested over the next six months. All of that AUD 80 million is either, is under offer, it's under exclusivity, the purchaser's spending hard dollar due diligence, and so we have, you know, reasonable further divestments beyond that. You know, I think that is, is quite likely. You know, what we're seeing in the market at the moment, and we, and we're just trying to get the right balance, but, it, it is very attractive time in the market at the moment to be refilling our land bank. We're seeing, you know, vendors, the, the owners or the option holders of land, they're, you know, more prepared to treat, they're more prepared to enter into conditional arrangements to, to do deals. You know, we, I guess, want to get the right balance between having capital available to, you know, to go down that path and make sure we've got, you know, great sites, particularly in New South Wales, which is a real focus for us. We don't want to, I, I guess, divest too much and impact, you know, the underlying earnings of the business. You know, we continue to, you know, do a comprehensive review of all the communities. You know, we are also offloading a couple of pieces of land at the moment that are, are no longer, you know, part of our, our core strategy moving forward. Yeah, I would potentially see further divestments beyond that AUD 80. You know, you would see that I, I think our balance sheet is in, is in very good condition. Our LVR is conservatively set. Our ICR is very strong. It's been a long time coming, but to enter into a new seven-year development partnership with Sun Communities, I think is a huge vote of confidence from Sun. Divestments beyond that AUD 80 would really be to take opportunistic advantage of land buying opportunities that we're seeing in the market at the moment. Yeah, that's great. Thank you very much. Thank you. Once again, if you would like to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Solomon sng from J.P. Morgan. Please go ahead. Hi, Simon and the team. Just a question on the three-year settlements target. I guess it applies 600 settlements per annum at the midpoint. I know you're not providing sort of quantitative guidance for 2024, but just interested in the shape of how you expect this to play out over the next three years. Is it gonna be more of a linear ramp-up or a bit more of a hockey stick at the back end? Yeah. Hi, Solomon. Look, I don't think it's gonna be a hockey stick shape. We're not gonna go backwards. You know, I think we've certainly got the ability to, to build a lot more than that 1,600 to 2,000 homes. You know, the environment that we're seeing at the moment, until we get to a point where the RBA is clear that we're at peak rate, I think a lot of purchasers are gonna continue to sit on their hands. You know, once we get to that point, I, I truly think the market is gonna really take off, and we just wanna make sure we've got enough stock. You know, we're very conscious that, you know, to build a new home, at the moment, it's still taking, you know, 23, 24 weeks. You know, for us to, to settle homes in the second half of this financial year, you know, from January to June, you know, we have to commit to those homes before Christmas. You know, for our projects in Queensland in particular, if the slabs aren't poured before January, that home's not gonna be ready by 30 June. You know, we're watching that very closely. You know, I guess how large the volume of settlements in 2024 is, will really depend and be a function of, you know, when we get to a point where the new governor says, "You know, we're, we're hitting pause for a time being," and then I think the market will really take off. You know, we expect that that'll then be a start of a very strong cycle, which will continue for a number of years, driven by the, you know, the structural imbalance that exists in the Australian housing market at the moment. We're simply not building enough homes. You know, I think kudos to the federal government for, you know, the great initiatives that it's announced over the last few weeks, long overdue. You know, there is no land that's approved, and the ability for those homes to be delivered, you know, in, in the next couple of years is gonna be really challenging because there's just no land that's available, particularly in Southeast Queensland. You know, the development pathways in New South Wales are appalling and, you know, Victoria is probably a more challenging market, you know, to, to invest in at the moment. You know, it is there's a lot of challenge out there. You know, as quickly as the RBA hits pause, then I think the market will take off very strongly. You know, we've got some amazing... You know, we probably overplayed with the number of photos we've put in, but, you know, the pipeline of projects that we have in market, that are coming to market, that will be coming to market very shortly, and, and there's another, you know, six or eight beyond that, that we, you know, we have under option, where we don't have to buy the land subject to getting a DA that we want, and a lot of those DAs have already been lodged. You know, the pipeline's coming together extremely well. It's taken us a long time to curate and get there, and, you know, there's been some absolute frustration, but I think the strength of our development business is really gonna shine. And, you know, I think there'll be strong, measured year-on-year growth across that three years. Yeah, the level of settlements we achieve in 2024, yeah, we really need to see how the next 3 months plays out, you know, how strong the summer selling period or the spring selling period is gonna be. Certainly when I'm out in the sites, so in the last, you know, month, I've been through all of our projects in Queensland, all of our projects in New South Wales, and most of our projects in Victoria. You know, there is renewed optimism from the sales team on the staff. We're committing to new homes. I think in my opening comments, you know, I outlined that we have, you know, 58 homes that we started the year with. We have another, you know, 240 odd that are under construction and another 250 odd that we're committed to, you know, to starting before Christmas. Like, we're, we're clearly building a lot of product this financial year. Great. The second question was just on the incentives. You know, you called out a bit about rent-free as well as discounts to support settlements ahead of June 2023. Just curious to see, you know, have those completely dropped off or this, you know, what sort of incentives are currently in the market? Yes, that's a great question. In the run home to 30 June, we had a range of incentives that were in place, that would be, you know, anywhere from 6-12 months rent-free. You know, our average rent would be, you know, let's say AUD 200 a week. That incentive would be, you know, around AUD 10,000 on a home that we're selling for AUD 500,000, so not hugely at the margin. There are also three or four communities where we would have had incentives, you know, whether it's cash back style arrangements of, of up to AUD 25,000. You know, that was really concentrated at, at, you know, three or four projects. It was certainly not across the board. For the first time in a long time, those, the, the, the rent holiday has continued across most of our projects, since the commencement of 1 July. That would be pretty unusual for us to do that, you know, whilst we are very positive about the outlook, you know, we are conscious that we're still in a, a market where for a lot of purchasers, you know, they're sitting on their hands, they're just, you know, reluctant to commit. Unless we give them a reason to step forward and, and, you know, commit to purchasing a home, a lot of them will just say, "Yeah, look, I'm interested, but I'm just gonna wait." You know, the incentives are, you know, still very modest. You know, we, we control those very tightly. Our, our salespeople certainly don't have the authority just to, to apply incentives, it is, you know, something that we, we, you know, watch very closely. Just at this point in time, we, we still think it's necessary. You know, we, we work or watch closely what our competitors are doing. You can see from our results that between 30 June and today's results, you know, we have grown the number of contracts and deposits on hand quite materially. You know, those incentives have been an important part of that. I, I suspect over the next month or two, that we'll probably, you know, wind those back. Our, our head of sales is just looking at me grimacing at the moment, but, no, we'll, you know, I, I don't suspect they're gonna be on the table for much longer, but, you know, that they are there at the moment, and I, I can't remember the last time that we would've had that sort of incentive in, in July or August. You know, it's been many, many years. Great. If I could just sneak in one more. Maybe a question for Justin Mitchell. Any discussion around potentially changing, I guess, the, the way that land lease development profits are, are recognized? As you sort of alluded to earlier, Ingenia does take a, you know, sort of below-the-line devaluation once the land lease estates move from construction to stabilization. You could sort of make the argument that the margins are maybe slightly overstated. I guess Stockland has taken a slightly different approach with lower margins, but no revaluation. Just interested in your thoughts there. Yeah, look, it's, you know, obviously early days for me, six weeks. I guess my primary focus has been to getting to today and delivering the result. You know, it's something that I do have in the back of my mind, and it's something we will look at either from a transparency perspective. From what I understand, you know, it certainly has been flagged, you know, in discussions with Donna and my predecessor. You know, it is there, you know, quite transparent around that. You know, we obviously are in accordance with accounting standards as well, which I think is important to highlight. Look, certainly something we can look at, but yeah, certainly hasn't been, you know, hasn't consumed a large part of my agenda so far. Great. Thank you, Justin. Thank you. Your next question comes from Suraj Nebhani from Citi. Please go ahead. Well, thanks a lot. Firstly, on, on the, on the joint venture, please, a positive result there, with the extension. Can you make any comments on the capital commitments from each party over, over that seven-year period? Obviously, you know, it depends on the number of projects, but at least if you look at the current project pipeline, just any idea of capital commitments there? Yes, Suraj, I, I might direct that question to Karen Landy, who oversees our partnership with Sun, and also, was the person who chaperoned the deal home over the last couple of weeks. Oh, hi. Hi, Suraj. While there's no binding commitment on to either party to commit to specific new projects, there is certainly a willingness of both parties to look to new opportunities, which was why the extension was so important for both parties. Each, each project that we've got on foot will require additional capital, and both parties are committed to fund those through a blend of debt and equity. That, that commitment is there from both parties. In terms of the structure for new projects, you know, we have a process that is established for that, both, both parties remain committed to explore those projects. We have cash flows and forecasts for all of the existing developments and projections that reflect a debt structure that's consistent with a gearing level that's similar to the head Co, which is in that target gearing range of 30%-40%, and we'll match that with equity accordingly. Makes sense. Okay. I, I mean, the, the, the way I'm reading that, those comments is that, you know, there, there'll obviously be a ramp up in the settlements over the next few years. It's fair to say that, you know, some of the debt that you're placing in, into the structure of the joint venture will probably go in now, and over time, the, it will probably come back as, as settlements, as settlements start coming in. Is that, is that probably the way to think of it? Raj, that's correct. We've got an existing AUD 50 million debt facility within the joint venture that's non-recourse already, and that's partly utilized on the existing developments, but there's still undrawn capacity within that. The joint venture already recycles cash flows in the sense that as home sale proceeds from home settlements are realized, we recycle that back into the developments, as well as do capital calls. Okay. I think maybe just a broader qu- Sorry, sorry. Just Simon here. Just one thing, you know, three projects we're developing with Sun that, you know, we anticipate will stabilize in the next two years or so. You know, the way the, the, the revised development partnership is, is that those communities will remain within Sun Ingenia for the first five years of operation, for which we will collect a management fee. That, again, further reduces the capital requirements on Ingenia, because we won't have to utilize our balance sheet to, you know, to buy Sun's interest out until, you know, the fifth year of stabilized earnings. You know, I think that's a, a really positive development for Ingenia and our balance sheet, but it also, you know, means that, you know, Sun can access some of the stabilized rents that, you know, these great communities will, will deliver. Thank you. Just, just one broader one for you, Simon, on, on capital partnerships. I know you had alluded to a few other capital partnerships as well. I'm just wondering if you can give any update on, on progress and I guess, you know, which businesses are, are targeted for capital partnerships? Yeah, we remain actively engaged with a handful of prospective capital partners at the moment. You know, I guess when I say engaged, that means they're doing asset tours with, we're negotiating term sheets. You know, we may not go down that path, but we certainly have a number of parties who are extremely interested in the sectors in which we operate. Those capital partnerships would extend across holidays, Ingenia Rental, and the development component of our lifestyle business. Sure. Is it fair to say that, you know, you're I mean, the terms of those are may or may not be similar to the, the Sun JV? Yes, that's. I mean, the, the Sun JV is a development partnership, and certainly in the holidays business and the Ingenia Rental, you know, there are development components within that, but they're more stabilized rent. So, yeah, it would not be dissimilar, but it, it would be, you know, it wouldn't just be cut and paste from the, the Sun agreement. We, you know, we, we need alignment with the right partners. You know, I think our balance sheet is in, you know, exceptional is probably too strong a word, but it's, it's in great shape. I think the LVR is, is, you know, is at the lower end of our range. We've shown our capacity to divest assets in a, in a, in a disciplined way. We've also, whilst it's taken a while, you know, we, we now have Sun as our development partner for the next seven years. You know, we don't need to, to bring in additional capital partners, but if we can, you know, find that partner who's aligned, where it makes sense for our shareholders, where it means we can, you know, accelerate our development of our lifestyles, you know, business. You know, if it means we can free up capital to, to make, to invest more into our land bank, you know, they're the sort of things that we would, we would look at. We're not rushing into it. You know, we don't have to find a capital partner. You know, you know, Justin and I are, you know, very comfortable with, you know, the, the settings of the balance sheet. You know, it is something that we talk about with the board all the time. Thank you. Thanks for that, Simon. Just one final one on, on, the, I guess, the sales rates. You've, you've given a number in the past where you talked about monthly sales rates on, on communities. I know you have 14 on the go at the moment, with 4 more launching near term. Is there like a monthly number, you know, just to set, you know, we can, yeah, I mean, we can take away and maybe watch or something like that? Like, what, what are you targeting for sales rates, I guess? Yeah, just trying to get a sense of, of numbers there. Well, look, I'd be pretty reluctant to give, you know, an individual sales rate, you know, per community. You know, if you look back over the years, you know, it really depends on the, the depth of the catchment and, and, you know, the price point we're operating at. But, yeah, like, typical absorption might be, you know, 40 or 50 or 60 homes per annum, but that's once the community's, you know, been stabilized in terms of, you know, there's a clubhouse available and, and, you know, we've got the, the builder in there at the moment. You know, it is a really challenging market to read at the moment. You know, until the RBA hits pause. You know, it's really hard to read exactly where customer sentiment is at the moment, and, and, you know, we've got some amazing projects in market. Our inventory is still, you know, extremely low, you know, as at 30 June, at the end of July, you know, inventory was broadly the same. We've got a lot of homes that are completing. You know, we're encouraged by the 1st 6 weeks of this financial year. You know, we've had to, to work hard to, you know, to, to get those deposits and contracts. You know, we're still utilizing some very modest, highly disciplined incentives in market. You know, we, we may provide some further color around settlements for this year, later this year, but again, it's really just, we want to, I guess we're just watching the customer very closely and waiting for direction from the RBA. Okay. Thank you. Thank you. Your next question is a follow-up from James Druce from CLSA. Please go ahead. Yeah. Hi, guys. Just, one, or two quick follow-ups, if, if I may. What was the like-like growth in the, in the lifestyle business over the, year? In terms of, the, the rent? The rental. The rental, like-for-like rental, yeah. I think you mentioned the rates were up sort of 6.5% or something, but- Yeah, we, we didn't. I didn't hear the like-for-like number. Yeah, we didn't include it in the presentation, but it is, sort of mid-single digits. Yep. Okay, that's clear. In terms of tourism for, for 2024, maybe I missed the comments, just sort of are you expecting continued strong growth there, or, or how, how are we sort of looking at 2024? Yeah, I, I might, Matthew Young, who heads up, our holidays business is on the line. Thanks, Simon. Thanks, Simon. Good morning, James. Look, we've, obviously having considerable growth in the, the last financial year. What we're still seeing is growth. It's probably at a more stabilized level, but year-on-year, our bookings are ahead versus the same point in time last year. I think just, you know, the domestic economic conditions, you know, that, you know, holiday at home approach. I think, you know, we'll start to slowly see some of the inbound market come in with China, opening up again. That doesn't represent a large percentage, but it's, it does, you know, introduce a new market that's been closed out for a number of years. Okay, that's clear. One more, if I may. Just on the AUD 80 million in DD, is there any? What proportion is in the Ingenia Gardens business? Is that zero or there's some there? We haven't given any split between where it is, but, you know, it's a combination of existing communities where we collect rent, a bit of holidays, and some land. Right. Thank you. Thank you. Your next question comes from Rohan Gallagher, from Ord Minnett. Please go ahead. Hi, Simon and team. Thanks for taking my questions. Just two quick questions from me. Just starting with the development business and the margin, more specifically, I think you mentioned in the coming years you're expecting a stronger price mix shift in terms of the home sales price. You have mentioned that from a cost perspective, that the cost base has increased, you know, ahead of the anticipated pickup in settlements. I'm wondering, you know, your expectations for the development margin in FY24 and beyond, what type of, do you expect an uplift in the margin? If so, are you able to provide any guidance there? Yeah, great question. Vron, who's our head of developments on the call, and I'll throw to her in a moment, but, you know, maybe just a couple of overarching comments. We, we do expect the margin to tick up over time. The four, the four new communities that we have, that we're building at the moment, which aren't gonna contribute a material amount of settlements this financial year, so that's Fullerton Cove, Morisset, Bargara, and, and Beveridge. You know, we are investing in marketing across those four projects, and so, you know, that is going to, I guess, temper the, the margin a little bit, because until those projects really get to a point where they're contributing strong, consistent developments, every month, then, you know, there's gonna be, marketing dollars going in every, every month to support it without the, you know, commensurate sales. Vron, maybe do you wanna comment briefly on what you're seeing in terms of, you know, the tender costs we're getting from builders and, and what's happening with the, the costs of building homes? No worries. Thanks, Simon. Look, you know, the industry is certainly in a different place than it was last year, and I think Simon mentioned it early, but I've got almost a queue at the door of, you know, large, reputable volume builders that wanna work with us. I think having that, they're often followed by, you know, a large number of trades that are actively hungry for work. We think that's gonna allow us to drive some sharper pricing that, you know, the industry or we haven't certainly experienced in the last little while. This morning, up in Queensland, I met with one of our large volume builders up here, you know, just talking anecdotally about what's happening in the market, it's the same kind of mess prices are still happening, albeit at a much scaled-down version, across only, you know, different small parts of the industry where maybe there's high demand, you know, in Queensland, concreting, also similar down in Victoria, both on the supply and the trade side. What is positive that we're hearing is the trades are flocking back to the market. Even though the large volume builders might have been looking ahead and looking for work, the trade base wasn't actively doing so. When the trades are, you know, actively looking for work in the market, we know that we're gonna see some positive wins from that. We don't expect there to be, you know, huge discounts or price decreasing, but we think there'll be more stability, in the pricing market. That's positive. Great. Thanks, Vron and Simon. It's much appreciated. Just a follow-up question on the settlements front. I know you provided FY24-26 guidance, and you're not providing FY24 guidance at this point. At the first half results, you did provide FY23-25 guidance. I know the market has been tough since then. I'm just wondering, at that FY23-25 guidance of 1,750-2,000 settlements, do you still think that's achievable? I guess the question being, you know, has there do you now think your guidance will be more back-end weighted towards FY26 because of the current residential market backdrop? Yeah, look, in FY23 with settlements, you know, was materially below where we started the FY23 achievable. What we've really put forward is, you know, what we think is a, a realistic, you know, assessment or forecast of settlements over the next three years looking forward. Call today on where-- what the next 3-6 months looks like, that-that's really hard because until the RBA hits pause, you know, we're having to really, you know, hustle and, and work hard and, and incentivize our customers to, you know, to make the decision. You know, we're, we're making sure that we've got these amazing communities coming through. We're committing to new homes, and we've got to keep that stock moving and, you know, I'm sure whether it's at time, you know, we're really just providing that look forward for the next 3 years. Yep. No, that's, that's great. Thanks for answering my question. That's it for me. Thank you. That does conclude our time for questions today. I'll now hand back to Mr. Owen for any closing remarks. That's great. We'll wrap it up there. Appreciate there's been a lot to digest this morning and lots of great questions, and thank you for your time. Donna and Justin and myself look forward to catching up with everyone over the next few weeks. If you've got any, you know, urgent questions or you wanna test something before you to reach out to Donna or Justin, you know, this morning, and we'll endeavor to find time to catch up straight away. Thanks very much for your time today. That does conclude our conference for today. Thank you for participating. You may now disconnect.