Lifestyle Communities share price seesaws on FY22 results after 'unusual' year

Pent-up demand after lockdown and a 'life is short' mentality led to more sales at Lifestyle's independent living sites in FY22.

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Key points

  • The Lifestyle Communities share price finished 0.23% higher today after the property developer and manager released its FY22 full-year results
  • Lifestyle reported 401 new home settlements in FY22 -- 57% higher than FY21 -- despite lockdown disruptions 
  • The company plans to launch seven new sites for development and sale in FY23

The Lifestyle Communities Limited (ASX: LIC) share price finished 0.23% higher today after the property developer and manager released its FY22 full-year results.

Lifestyle Communities develops and manages independent living residential land lease communities for senior citizens across Victoria. Lifestyle's properties target retirees, semi-retirees, and working downsizers with plenty of recreational facilities and entertainment on site.

The Lifestyle Communities share price opened at $17.50 today, up 0.8% on yesterday's close of $17.36. It then fell to an intraday low of $16.91 before rebounding again to close at $17.40.

Let's take a look at the results.

Lifestyle Communities share price fluctuates after results released

The highlights of the results are as follows:

  • Net profit after tax (NPAT) of $88.9 million, down 2.4% on the prior corresponding period (pcp)
  • Underlying profit after tax of $61.4 million, up 69% pcp
  • Total assets worth $1,006.2 million, up from $781.3 million pcp
  • Net debt of $243.1 million, up from $187.7 million pcp
  • Annuity income of $40.6 million, up 25% pcp
  • 401 new home settlements, up 57% pcp
  • 3,193 homes currently under management
  • Final dividend of 6 cents per share payable on 6 October.

What else happened in FY22?

Lifestyle Communities said its annuity income increased due to a higher number of settlements and homes under management.

The annuity income included gross rental income of $29.7 million and deferred management income (DMF) of $10.9 million on resales.

The company also said increased property valuations lifted its statutory profit after tax to $89.9 million.

Over the 12 months, Lifestyle Communities acquired four sites, including the Phillip Island site in August 2021 and the Merrifield site in Mickleham in November 2021.

These acquisitions have put more than 2,150 new homes into the development pipeline. Managing director James Kelly says this will "underpin our continued growth for the next three to five years".

Lifestyle now has more than 4,500 homeowners living in 19 operating communities across Melbourne and regional areas of Victoria.

Lifestyle Communities increased its dividend payment in FY22 by more than 30%, paying a total of 10.5 cents per share. The company paid 8 cents per share in FY21.

What did management say?

Kelly said FY22 had been challenging, mainly due to COVID-19 lockdowns:

To say this year was an unusual one for the business is an understatement.

Lockdowns for the first four months of the year were followed by a large upswing in demand through the Christmas/New Year periods as pent-up demand and a 'life is short' sentiment coming out of lockdown saw strong sales and increasing desire to free up equity through downsizing.

We continue to see new land acquisition opportunities come to market and are well funded to continue to purchase high quality sites that meet our investment criteria.

What's next?

Lifestyle Communities plans to launch seven new sites for development and sale in FY23. This will take the total number of sites at various stages of development to 11 by FY25.

The company plans to deliver between 1,400 and 1,700 new home settlements between FY23 and FY25.

Lifestyle Bellarine will be the next site that Lifestyle takes to market in September 2022.

Share price summary

In FY22, the Lifestyle Communities share price hit a 52-week high of $23.85 in October 2021.

It then fell in line with the broader S&P/ASX All Ordinaries Index (ASX: XAO) until reaching a 52-week low of $11.34. The shares have since rebounded along with the rest of the market.

Overall, the Lifestyle Communities share price is down 16.2% over the year to date. This compares to a 5% fall in the All Ords.

Lifestyle Communities has a market capitalisation of approximately $1.81 billion.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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