REPORTING SEASON: Ingenia Communities Group (INA)

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Figure 1: Ingenia Communities Group 12 month chart

 

Ingenia Communities (INA) boosted by aging population

·         Ingenia Communities (INA), an Australian seniors living property group posted a 97% rise in underlying profit to $11.6m which was in-line with consensus (market forecasts)

·         Of its 3 portfolios, rental properties in its Garden Villages unit contributed 70% of revenue. INA added 5 ‘distressed’ villages in Jan & is focused on improving occupancy & efficiencies. INA owns 34 villages, 1,801 units, has a presence in all states except SA & is Australia’s largest operator of Seniors’ rental villages

·         The Active Lifestyle Estates portfolio is focused on affordability & grew most substantially over FY14. It has significantly ramped up activity with more than 917 units in the stgelopment pipeline (compared to 84 in FY13) & over 435 approved sites for stgelopment. According to FY14 results, $254,000 was the average sale price for properties over the year and also generated $5.4m in short term rental income from holidayers

·         Its Settlers portfolio consists of 9 Deferred Management Fee (DMF) communities. A monthly fee is charged & a certain percentage of the initial purchase price is deducted from the sale proceeds at the end of the resident’s stay. EBIT fell by 20% to $4.5m due to some projects nearing completion & minimal reinvestment

·         A 0.65¢ final distribution is payable to eligible investors on 17 Sept. The ex-distribution date is 29 Aug (most important date for eligibility). Looking ahead, INA plans to continue increasing its exposure to cash yielding assets such as Lifestyle Parks, is focused on prospective acquisitions in NSW & South East QLD and will progress with non-core asset sales to better use capital. INA shares have been one of the best performers in recent years and improved following the result. INA shares are down to the tune of 8% this calendar year however. INA shares almost doubled in 2013, surged by 75% in 2012 and 79% in 2011. Retiring baby boomers (those born between 1946-1964) have pushed demand higher for affordable housing solutions

 

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Steven Daghlian, Market Analyst,