Peet Limited (ASX: PPC) shares are sliding lower today after the company released its financial results for the half-year ending 31 December (H1 FY21). In late afternoon trading, the Peet share price has slumped almost 3% to $1.17.
Let’s take a look at how the residential land developer has been performing.
What did Peet report?
The Peet share price is slipping despite the company reporting a 101% increase in statutory profits over the prior corresponding half, up to $10.1 million. Revenue of $106 million was also up 11% year on year.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 65% to $20.9 million, compared to $12.7 million in H1 FY20. Earnings per share (EPS) were up 100% to 2.1 cents.
The Peet share price is failing to respond despite the company reporting a 50% increase in the number of lots sold compared to the prior corresponding half, and a 62% increase in lots settled.
Peet had cash and debt facility of roughly $122 million as at 31 December 2020, with a weighted average debt maturity of close to two years.
Commenting on the results, Peet CEO Brendan Gore said:
Our performance during 1H21 was achieved on the back of improved market conditions and accommodative government stimulus in response to COVID-19. The margin increase [increased EBITDA margin of 21%, compared to 14% in H1 FY20] represents a combination of a significantly improved performance across the Funds Management and Joint Venture businesses and a reduction in expenses as the Group progresses its cost-outs.
Peet will pay an interim dividend of 1.0 cents per share (cps), fully franked. That’s up from 0.5 cps in H1 FY20.
Looking ahead, the company expects residential market conditions to remain positive over the coming half year, with “low interest rates, accommodating credit conditions and an improving employment outlook resulting from the impacts of governments’ stimulus”.
Peet share price snapshot
Having tumbled more than 59% during the pandemic market crash last February and March, the Peet share price remains down 14% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up just over 2% in that same time.
Year to date, Peet shares have jumped by around 1%.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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