Peet : 25 February 2021 - PPC  - Appendix 4D and 1H21 Financial Statements

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Appendix 4D and Consolidated Financial Statements for the half-year ended 31 December 2020

Appendix 4D

Results for announcement to the market 1

Results commentary 2

Half-year financial report

Directors' report 6

Auditor's independence declaration 8

Consolidated statement of profit or loss and other comprehensive income 9

Consolidated balance sheet 10

Consolidated statement of changes in equity 11

Consolidated statement of cash flows 12

Notes to the consolidated financial statements 13

Directors' declaration 19

Independent auditor review report to the members 20

Entity:

Reporting Period:

Previous Corresponding Period:Peet Limited and its controlled entities

31 December 2020

31 December 2019

Results Commentary

For the half-year ended 31 December 2020

Results Commentary

Key Results1

•  Operating profit2 and statutory profit3 after tax of $10.1 million, up 101%

•  Earnings per share of 2.1 cents, up 100%

•  1,522 lots4 sold, up 50% on 1H20 and 16% on 2H20

•  1,254 lots4 settled, up 62%

•  2,054 contracts on hand4 as at 31 December 2020, up 15% since 30 June 2020

•  Gearing5 of 30%

•  Fully franked interim dividend of 1.0 cents per share

Financial commentary

The Peet Group achieved an operating profit2 and statutory profit3 after tax of $10.1 million for the half-year ended 31 December 2020, which represents an increase of 101% compared with the previous corresponding period. This performance was achieved on the back of improved market conditions and accommodative government stimulus in response to COVID-19.

The Group derived EBITDA6 of $20.9 million in 1H21, compared to $12.7 million for the previous corresponding period, on an increased EBITDA6 margin of 21%, compared to 14% in 1H20. This margin increase represents a combination of a significantly improved performance across the Funds Management and Joint Arrangements businesses and a reduction in expenses as the Group progresses its cost-outs.

The performance has resulted in earnings per share increasing 100% to 2.1 cents, compared with the previous corresponding period.

Operational commentary

The Group achieved sales of 1,522 lots4 (with a gross value of $365.1 million) in 1H21 across its operations, representing an increase of 50% on the number of sales achieved in the previous corresponding period.

The uplift in sales was evidenced across all the Group's business segments (Funds Management, Company-owned and Joint Arrangements) and across WA, Qld, NSW/ACT and SA. Sales in Victoria were impacted by the COVID-19-related lockdowns and the substantial completion of two projects in FY20.

The Group achieved settlements of 1,254 lots4 (with a gross value of $304.8 million) in 1H21 across its operations, representing an increase of 62% on the number of settlements achieved in the previous corresponding period.

The increase in settlements was evidenced across all the Group's business segments and the states it operates in. The prudent management of inventory both before and during COVID-19 has allowed the Group to meet the timeframes to deliver government stimulus-eligible lots (Federal Government's HomeBuilder grant and the WA State Government's Building Bonus grant) for which demand has been strong.

As at 31 December 2020, there were 2,054 contracts on hand4, with a gross value of $488.0 million, compared with 1,786 contracts on hand4 as at 30 June 2020, with a gross value of $427.7 million. The 15% increase in the number of contracts on hand, and 14% increase in their value, provides positive momentum as the Group moves into the second half of FY21.

• 1 Comparative period is half year ended 31 December 2019 unless stated otherwise. The non-IFRS measures have not been audited.

• 2 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/(losses) arising from the effect of revaluing assets and liabilities and adjustments for realised transactions outside the core ongoing business activities.

• 3 Statutory profit after tax means net profit measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited.

• 4 Includes equivalent lots.

• 5 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets).

• 6 EBITDA is a non-IFRIS measure that includes effects of non-cash movements in investments in associates and joint ventures.

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