Ingenia delivered a step-up in net profit (+40%), driven by the Lifestyle Parks division. On a per-security basis, profit increased 21.3% (additional securities on issue). Distributions increased 7.7% to 4.2cps for the half.
In the Lifestyle Parks division (manufactured home estates), 58 settlements of new homes occurred in the half, as compared to 56 for the whole of FY-15. This resulted in an increase in development earnings. Earnings also increased materially from rental income.
The Garden Villages division (rental retirement units) had an 89.6% average occupancy, up from 88.3% in the pcp (on a like-for-like basis: 3 villages were sold in the half). Earnings were flat on the pcp, from a smaller number of villages.
Occupancy across the Settlers division (DMF) villages increased 3% to 96.0%. Earnings decreased 0.7% due to a reduction in development profit. This is because units are being sold down, without new sales - Ingenia intends to continue the divestment of its DMF villages, so that it can utilise the capital in the higher-return Lifestyle division.
The outlook for Ingenia is positive - with 120 development sales being targeted for FY-16. Additionally, the company has a large annuity (rental) income stream, providing confidence for FY-16 and beyond.
Ingenia offers exposure to the aging population demographic. Its distributions (income) are supported by rental income, and it offers growth though the development and sale of new units.