The Lifestyle Communities Limited (ASX: LIC) share price closed 2% lower yesterday after the company reported lower new home settlements for FY20 in its latest profit update.
What did Lifestyle Communities announce?
In a pre-market open update yesterday, Lifestyle Communities advised that it has finalised the year-end valuation process for its portfolio of 18 communities that are fully developed, partially developed or waiting to commence development.
Due to new home settlements achieved in FY19 and a 0.5% reduction in the capitalisation rate used by the independent valuers (from 7.5% to 7.0%), Lifestyle Communities reported a material uplift in the value of the Company's property portfolio, which will subsequently impact on its statutory profit result for FY19.
Subject to the finalisation of the year-end audit, Lifestyle Communities said it expects to report:
- Underlying net profit after tax (NPAT) attributable to shareholders of $40.5 million to $41.5 million; and
- Statutory net profit after tax attributable to shareholders of $54.5 million to $55.5 million.
- According to the release, new home settlements for FY19 totalled 337.
What about its new home settlement numbers?
Lifestyle Communities said that it has experienced some delays in receiving planning permits for the Wollert North and Kaduna Park projects.
While the company expects to receive a planning permit in relation to its Wollert North project shortly, Lifestyle Communities said it is likely that first settlements will be early in FY21.
Management said the preliminary site works have commenced at Kaduna Park and, although some planning delays have occurred, the Company currently expects first settlements in the fourth quarter of FY20.
Settlements for FY20 are forecast to be in the range of 270-310, a sharp decrease from its expected FY19 number of 337.
With current projects in progress plus a contribution from recent land acquisitions at Plumpton and Tyabb (both of which are still to receive planning approval) Lifestyle Communities currently expects to see an uplift in settlements in FY21 to a range of 370–420.
Despite an uptick in FY19 figures, the transitory nature of these means investors were more focused on the lower FY20 estimates and planning delays in some projects.
Lifestyle Communities said that it will announce its audited FY19 financial results on 14 August 2019 and I'd be waiting on the sidelines until I could get a good look at what the underlying figures are for the group before buying in.
