Mirvac Group

Welcome to Mervac Group's FY26 Results Briefing. At this time, all participants are in listen-only mode. After the presentation, there will be a question and answer session. To ask a live audio question, press the Request to Speak button at the top of the broadcast window. The broadcast will be replaced by the audio questions interface. Press Join Queue and, if prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues asking a question via the web, A phone line is also available. Dial-in details can be found on the Request to Speak page or on the home page under Asking Audio Questions. The audio queue is now open and you may join at any point during the meeting. Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to Mirvac's CEO and Managing Director, Campbell Hannan.

Well, good morning everyone and thank you for joining us for our full year results presentation. Joining me is our CFO, Courtney Smith, our CEO Investments, Richard Seddon, and our CEO Development, Stuart Penclas. I'd like to begin by acknowledging that we are presenting to you today from Gadigal land, and I'd like to pay my respects to Elders past and present. At our half-year results, we spoke about the momentum that was building across all parts of our business. This momentum has continued into the second half, and we have executed on all of our priorities for the year. Our operating profit of $508 million is up 7% on PCP. NTA has returned to growth and our statutory profit has improved, reflecting better returns across all asset classes. And all of this has been achieved with gearing below the midpoint of our target range at 24.1%. We set a clear strategy three years ago and we are delivering on this strategy, which continues to drive growth across multiple fronts. What you'll see in these results is the improved quality and growth outlook of the investment portfolio, demonstrated by high occupancy at 98%, positive leasing spreads, strong like-for-like income growth and positive valuation growth. You will notice the major restocking and improvement in development returns. which are expected to accelerate into FY27. You will notice a 15% increase in residential sales volumes and gross margins exceeding our target. You will notice the recapitalisation and expansion of our major fund vehicles. And importantly, you'll notice the additional balance sheet capacity with assets under construction now fully funded. Having reset the platform, our focus is now firmly on delivering further growth initiatives on multiple fronts. Our additional $130 million of new recurring income will hit the investment portfolio in coming years, benefiting from the completion of assets across built-to-rent, industrial and office. FY27 will be the first year of NOI growth in the investment portfolio since FY23. with asset sales no longer required. Our development business has and will benefit from the five new master plan community launches in FY26 and 27, as well as the settlement of five apartment projects in the next nine months, restoring double digit returns. The activation of our restock pipeline will also support development earnings beyond FY28. Today, we're also announcing a share buyback of up to $200 million. which we view as a compelling allocation of capital at a time when we're trading at a 25% discount to NTA. We have positive valuation growth across every major asset class, strong embedded value in our development pipeline, a growing funds platform and confidence in our future earnings outlook. So a buyback represents good value at this time. Our performance is underpinned by a strong culture, sustainability leadership and active governance. We progressed our 2030 net positive targets, achieved our social procurement goal five years early and increased employee engagement to top quartile. Along with this, we've become a leader in learning and development and continue to have strong diversity outcomes. Achieving these targets are complementary to our strong financial performance. They help us attract capital, customers and talent while supporting long-term value creation for our stakeholders. We've well progressed on AI deployment across the business to increase productivity, with over 100 active agents created and 80% of our team regularly utilising AI and plans for further integration. I'll now hand over to Courtney to take you through the financial metrics.

Thank you, Campbell, and good morning, everyone. 526 demonstrates the earnings benefit of the strategy we've been executing across the business. And importantly, we finished the year with a stronger balance sheet and the capital to deploy capital selectively into attractive opportunities. FY26 was a year of focused delivery, delivering 12% growth in e-group EBIT and a return to positive valuation. Development was the major driver, with EBIT increasing by more than 50%. Commercial mixed-use earnings was underpinned by contributions from 55 Pitt Street, Aspect and Seeds Stage 2, while residential was supported by higher settlement prices, improved margins and capital partnering on Harborside and Kindera Stage 1. Investment earnings remained resilient despite asset sales, with growth in living and industrial and positive like-for-like NOI growth across the portfolio. Excuse me. Funds EBIT increased 9%, supported by growth in funds under management, as developments completed. Across the Group, overheads were broadly stable, while net interest costs increased, reflecting lower capitalised interest. Pleasingly, positive investment and development valuations also contributed to a significant increase in statutory profit.