- $1 million decrease in net profit
- Value of assets increased by almost $149 million
- Covid had an impact on sales and the construction of the new developments
Lifestyle Communities (ASX:LIC) has recorded a slight decrease in net profit after tax, although the total value of assets has increased significantly.
The net profit after tax to shareholders for 1HFY21 is $14.1 million – a decrease of $1 million compared to 1HFY20.
The retirement residential property managers company has seen a sharp rise in the total number of assets from $499.7 million this time last financial year to $646.6 million for 1HFY21 due in part to new developments across the portfolio.
The company says these new developments will facilitate the increase in demand expected post-pandemic.
There were some delays in these developments due to government-mandated restrictions which affected the number of tradespeople allowed on worksites.
However, construction commenced at their St Leonards facility and a new site acquisition at Rockbank has increased the total portfolio to 4,674 homes.
Net debt has increased compared to this time last year from $126.7 billion to $173.4 billion.
In terms of income, site rental fees and deferred management fees have grown steadily over recent years; these two fees brought in over $7 million of income during the 1HYFY17 but now bring over $14 million.
The group says these two annuity incomes continue to grow thanks to new settlements and resales across their portfolio.
The site rental fee is currently $186 per single and $214 per couple, per week, per home. This fee is indexed at the higher rate between CPI or 3.5 per cent per annum.
However, due to the moratorium on rent increases by the Victorian State Government, a rental fee increase that was meant to start on 1 July 2020 was not processed. An increase is due on 1 July 2021.
Sales and settlements were impacted by pandemic lockdowns and associated restrictions, especially in the Melbourne region which the group says had a major impact on their net profit.
New home settlements for the first half were 88 which is down compared to 109 during the same period last year.
Given the fact the average age of the company’s 3,809 residents is 74 there were concerns for residents and potential future residents regarding health and safety, this most likely contributed to the decrease.
An interim fully franked dividend of 3 cents per ordinary share will be given to shareholders – the same amount given in 1HFY20.