Peet’s profit up 103%

• Earnings were above the November 2021 guidance
• Three major transactions are expected to underpin medium to long term earnings visibility
• Company well positioned for further earnings growth in 2H22

Property developer Peet (ASX: PPC) recently released its HY22 results to market. The company recorded a 103% increase in operating and statutory profit after tax, with most other metrics also moving upward.

Peet said that the profit result was approximately eight per cent more than the upper end of the earnings guidance announced to the market in November 2021 of an earnings range of $16 million to $19 million for 1H22.

Company EBITDA was $32.6 million, rising from $20.9 million for the previous corresponding period, Peet said in a statement released to the market, “This margin increase is predominantly attributable to the performance and margin growth across the Funds Management and Joint Arrangements businesses”.

“The 1H22 result is on the back of higher sales and price growth across the Group’s three business segments and across most states that Peet operates in, supported by solid market conditions, continued accommodative lending conditions and consumer sentiment; and despite the impacts of extended lockdowns on the east coast in the first quarter of the 2022 financial year,” said Peet MD and CEO Brendan Gore.

Peet’s 2,506 contracts on hand have a gross value of $816.6 million, up from last year’s 1,948 contracts worth $546.6 million.

“The 29% increase in the number of contracts on hand, and 49% increase in their value, provides strong momentum as the Group moves into the second half of FY22,” said Mr Gore.

Peet noted that since 30 June 2021, three transactions are expected to underpin the company’s medium to long term earnings visibility: the acquisition of 15 hectares from the University of Canberra for $67 million; interest in the Flagstone City project in Queensland, and the sale of some 250 hectares of broadacre land in New Beith, Queensland for circa $80 million.

Peet expects to be “well-positioned for further earnings growth in 2H22, supported by substantial contracts on hand, continuing sales momentum and full ownership of the Flagstone City project.”