Lifestyle Communities Limited

Good morning and welcome to Lifestyle Communities Investor Analyst Conference Call. My name is Anita Adaricio, Company Secretary of Lifestyle Communities and moderator for this call. This webinar will be recorded for the benefit of those who are unable to attend today and the webcast will be available upon request. Please be advised that our conference will strictly be limited to 45 minutes. Due to the number of attendees, we will endeavor to address as many questions as possible during this time. We encourage you to contact the company via the Investor Centre available on the company's website should you have any queries following today's update. Our presenters today are our Chief Executive Officer Henry Rose and Chief Financial Officer Angela Farbridge-Curry who will provide an update on the FY26 results as released to the market this morning. Also joining us this morning is Claire Lewis, Investor Relations. This will be followed by a Q&A session for which I now outline the procedure as presented on your screen. Prior to asking your questions, we invite you to introduce yourself and advise the organisation that you are representing. To ask a verbal question, please select the raise hand icon to be placed on cue. You will be invited to speak at the appropriate time. If you wish to ask any written questions, please do so via the Q&A function. Please note that questions received via the Q&A function, which are of a similar nature, will be grouped and answered at the appropriate time. I now invite our CEO, Henry Wurst, for his presentation. Over to you, Henry.

Thanks, Anita, and good morning, everyone. Thank you for joining us for our FY26 four-year results. I'm joined today by Angela Farbridge-Curry, our CFO, and Claire Lewis from Investor Relations. The story of FY26 is one of renewal and transformation for our business. Over the past year we rebuilt sales momentum, strengthened our financial position, reduced inventory and materially improved the underlying foundations of the business. We have taken deliberate action to improve operating discipline, restore confidence in the business and position lifestyle communities for sustainable growth as market conditions improve. At our core, lifestyle communities reimagines the way to live for independent downsizers. Our model combines affordable, contemporary homes with vibrant community living, helping homeowners unlock equity and live active, independent and connected lives. Delivering on our purpose is not only important for homeowners, it is also commercially significant. Customer appeal, satisfaction and advocacy help drive demand across our portfolio. As the homeowners choose lifestyle communities and enjoy positive living experiences, we strengthen our recurring income streams, improve business resilience and create long-term value for shareholders. As we reflect on FY26, the business has emerged stronger, more focused and better positioned to capture the opportunities ahead. This snapshot captures some of the highlights. FY26 marks a significant step forward in rebuilding sales momentum, with the team achieving 400 sales, including 216 net new home sales, up 55% on the prior year. We also welcomed over 410 new homeowners into our communities, helping more Australians embrace an active, connected and affordable lifestyle. The portfolio now includes 4,368 homes under management across 25 operating communities and we have just under 1,400 sites in our development portfolio. Financially, the business generated $94.9 million of operating cash flows and a statutory profit after tax of $46.9 million. The team also made strong progress in reducing completed home inventory by 55%, which when combined with the finalisation of land bank sales, enhanced our balance sheet strength and contributed to $186 million reduction in net debt. Our investment properties were independently valued at 30 June 2026 with a carrying value increasing to $952.9 million. NTA increased to $5.59 per share. Although external conditions remained subdued, we made major strides in strengthening the underlying business platform, creating a more capable, scalable and valuable foundation for future growth and shareholder returns. FY26 marked a decisive step in our transformation journey. As we strengthened the foundations of the business, we remained focused on restoring momentum. and Positioning Lifestyle Communities for long-term growth. That momentum is most evident in our sales results. Net new home sales rose 55.4% to 216, supported by our MarketLib pricing strategy, improved conversion performance and the growing strength of the WakerLib brand. Equally important, as I touched on already, we reduced the level of unsolved inventory by 55% from 269 homes to 121, and aligned new build orders more closely to sales rates. That is an important sign of greater operating discipline. And thanks to our team's customer-centric approach, homeowner satisfaction reached 78.9, the highest result since measurement began. Handing to Angela to walk through our overall results snapshot.

Thank you Henry and good morning everyone. There are a number of key messages in the FY26 result that I'd like to highlight. Firstly, as Henry mentioned, new home sales improved materially, increasing from 139 in FY29, 25 to 216 this year. This improvement was driven by the Way to Live brand campaign, execution of our market-led pricing strategy and a stronger sales conversion focus. Settlements were lower than the prior year, with 240 new home settlements compared with 268 in FY25. As previously flagged, this reflects the lag from sales to settlements due to lower sales rates over the previous 24 months. When we consider this against the softer residential housing market, which is experiencing lower transaction volumes and vendor price reductions, our sales to settlements conversions have pleasingly remained strong. Our annuity rental income continued to grow, with rental income increasing 12.4%, driven by both the annual rental increase and the additional 240 new homes settled during the year. Consistent with our half-year reporting, our total annuity revenue was reduced year on year due to DMF revenue not able to be collected on contracts impacted by the VTAP decision. And finally, operating profit after tax was $25.4 million, down from $45.2 million in FY25. The operating earnings result is reflective of the lower new home settlement volumes and price points, the lower DMF revenue following VCAT, and consistent with our half-year result, a greater portion of interest cost expense against the land bank. Pleasingly, from a balance sheet perspective, our disciplined strategy execution has enabled us to reduce net debt materially from $460.5 million in June 25 to $273.7 million at June 26, which has assisted us with strengthening the balance sheet as we head into FY27.