Peet : 19 November 2020 - PPC - Chairman's Address and MD's Presentation for 2020 AGM

19 November 2020

2020 Annual General Meeting ("AGM")

Enclosed are copies of an address and a presentation to be given at today's AGM of Peet Limited ("Peet") by Mr Tony Lennon, Chairman and Mr Brendan Gore, Managing Director and Chief Executive Officer, respectively.

This announcement is authorised for release to the market by the Board of Peet.

19 November 2020

Chairman's Address to 2020 Peet Limited Annual General Meeting

I confirm that all Directors are present virtually at today's AGM and we have also arranged for the Company's auditor, Mr Geoff Lotter from Ernst & Young, to be present. Later in the meeting you will be given the opportunity to ask questions relating to the FY20 audit.

Following my address, Peet's Managing Director and CEO, Brendan Gore, will deliver a presentation and we will then follow with the formal part of the meeting.

COVID-19

When the COVID-19 pandemic impacted Australia in March 2020, we took decisive action to protect our people, residents of our communities and the balance sheet through a variety of initiatives, which we have previously detailed to the market.

Peet's priority was the safety and wellbeing of our employees and residents and we moved quickly to implement a targeted pandemic response. We also prioritised supporting the ongoing viability of our small business suppliers and we also communicated digitally with residents in our communities.

I am proud of the resilience demonstrated by the Peet Team, especially the Victoria-based Team, during this challenging period.

RIGHT-SIZING COST BASE AND STRENGTHENING CAPITAL POSITION

As announced earlier in the year, Peet reduced the number of employees on the back of its:

• investment in its information and digital platforms during the past few years to improve the efficiency of its workflows and the gathering of data to drive enquiry and increase sales; and
• resetting of the Group's focus on key growth corridors around the country, resulting in the proposed orderly divestment of non-core projects, including regional and sub-regional projects and the targeted recycling of circa $75 million of capital over the next 18 to 24 months.

The decisions made in responding to COVID-19 and the right-sizing of the cost base and strengthening of our capital position were necessary to ensure the Group is well positioned for the post COVID-19 environment. However, the Group did recognise a restructuring and divestment-related provision of approximately $45 million after tax.

FY20 performance

FY20 was challenging for the Group, with operating profit after tax of $15.1 million, and a net statutory loss of $30.1 million, compared to an operating profit after tax and statutory profit of $47.5 million in FY19.

Operating earnings per share for FY20 equated to 3.1 cents (statutory loss per share of 6.2 cents) and the Directors declared a final dividend for FY20 of 1.0 cent per share, fully franked, bringing the total dividend for FY20 to 1.5 cents per share, fully franked. This compares to a full-year dividend 5.0 cents per share, fully franked, in FY19.

Brendan will provide further information on the Group's FY20 performance in his presentation.

Strategic focus

We continue to make progress with, and back, our strategy to deliver quality residential communities around Australia through four key pillars:

• investing in quality land;
• planning, creating and enhancing communities;
• expanding our product offerings; and
• maintaining strong capital management. During the year, the Peet Group:
• continued to build our geographically diverse portfolio, with two townhouse sites and one broadacre land project secured during FY20 on attractive terms;
• commenced development/sales of two new projects, resulting in 70% of our projects now under development. We expect circa 80% of our projects to be under development by FY23;
• continued to extend our market reach by broadening our offerings to include more townhouses and low-rise apartments. We now have a pipeline of approximately 1,100 townhouses and apartments; and
• used its robust capital position to be proactive in implementing initiatives in response to COVID- 19. At 30 June 2020, the Group's gearing was 28.8%, within the Company's target range of 20% to 30%. Additionally, the recycling of c.$75 million of capital over the next 18 to 24 months from the divestment of non-core assets will further strengthen the Group's balance sheet.

The mix of Company-owned, funds management and joint venture projects continues to hold the Group in good stead.

Sustainability and community building

As in previous years, in all our new communities we focus on planning, designing and delivering outcomes that balance environmental, social and economic needs.

Examples in FY20 include:

• Peet's newest community in Western Australia, Brabham Estate has in its first year been awarded a 6 Star 'Green Star Communities' certification by the Green Building Council of Australia, making it a World Leading Sustainable Development;

• Googong trialled a new innovative recycled road product, known as Reconophalt - a first for the ACT / Queanbeyan region. A one kilometre, two-lane road paved with Reconophalt can contain 500,000 plastic bags and packaging equivalents, 165,000 glass bottle equivalents and toner from 12,000 used printer cartridges;
• Summerhill, located within Botanic Ridge in Melbourne's south east, has a unique ecological landscape rich in fauna and flora. In line with the project's Conservation Management Plan and Peet's ongoing commitment to sustainability, Peet has worked with key stakeholders to develop a plan to protect the population of the Southern Brown Bandicoot within the corridor from being landlocked; and
• Peet is proud to have been working with the Bedford Group for 12 years across landscaping projects in our communities in South Australia. The Bedford Group is an organisation that supports people living with disability by providing employment opportunities. Beginning with a small team that undertook landscaping of front gardens and verges, the Bedford Group now have approximately 35 staff working on Peet projects and tender for all Peet's landscaping work.

Conclusion

I take this opportunity to thank my colleagues on the Board for their efforts during the year, and on their behalf thank Brendan Gore and his team for their continued diligence and contributions throughout FY20.

The details of Brendan's and other Key Management Personnel's remuneration are outlined in the remuneration report included in the 2020 Annual. There were no changes to the remuneration structure of our KMPs during FY20.

The Corporations Act 2001 requires a resolution to be put to the meeting adopting the 2020 Remuneration Report. We will come to that vote later in today's meeting.

Before I close my address to the 2020 AGM, and on behalf of the whole Peet team, I would like to thank all our Securityholders, our Syndicate investors and our Joint Venture partners for their ongoing support.

I now invite our Managing Director and Chief Executive Officer, Brendan Gore, to address the meeting.

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