07 April 2014
Three quarters of strong sales results for Aveo Group in FY14 as it continues to exit its non‐retirement assets Aveo Group (ASX: AOG) is pleased to report continuing strong sales from its Retirement Established Business division and its Residential Communities and Apartment division as its transformation to a pure retirement group accelerates. As a result, net cash flows from Aveo’s operating activities in FY14 are forecast to be stronger than FY13. Aveo Group also confirms its previous guidance that FY14 underlying profit is forecast to be up on the FY13 result. Sales of Independent Living Units (ILU’s) and Serviced Apartments (SA’s) from the Retirement Established Business division in FY14 continue to be well up on the prior comparative period. In addition to the 333 sales settled in HY14 (a six year high for HY settlements), an additional 161 sales were settled in Q3 FY14, bringing total settlements for the year to date to 494. This represents a 15% increase on the 430 settlements achieved in the prior comparative period. Forecast settlements for FY14 from Aveo’s Retirement Established Business division are expected to be 5%‐10% up on FY13 settlements. Contracts on hand for the Residential Communities and Apartment division for the nine months to 31 March 2014 have increased by $173 million (up 68%) to $426 million. This solid performance is largely due to strong land sales at the three major land estates – Peregian/Ridges on the Sunshine Coast, Rochedale in Brisbane and Saltwater Coast, Point Cook in Melbourne, and continuing sales of apartments at The Milton in Brisbane, Luxe in Sydney and Aerial in Melbourne. The 77 unit Luxe project at Woolloomooloo in Sydney has one remaining apartment for sale, Aerial at Camberwell has eight apartments remaining and the 300 unit The Milton project in Brisbane, which is now under construction, is 82% pre‐sold. 1,000
900
$177m
800
$73m
($59m)
($18m)
$426m
700
$371m
Lots
600
500
$253m
400
300
200
100
‐
Jun‐13 Contracts
Additional
Deposits
Settlements
Dec‐13 Contracts
Additional
Deposits
Settlements
Mar‐14 Contracts
About Aveo “We will grow with older Australians by inspiring greater living choices.” Aveo is a leading and trusted owner, operator and manager of retirement communities across Australia. Aveo’s philosophy is underpinned by a commitment to grow with older Australians by inspiring greater living choices. We currently do so for 12,000 residents in 75 retirement villages across Australia. Aveo also manages and develops a diversified $700 million property portfolio. Over 30 years, Aveo’s portfolio has grown to one that encompasses retirement, residential, commercial, industrial and mixed‐use property assets. Together these communities define how hundreds of thousands of people in Australia live, work, retire and invest. Issued by Aveo Group (ASX:AOG) comprising Aveo Group Limited ABN 28 010 729 950 and Aveo Funds Management Limited ABN 17 089 800 082, AFSL No. 222273 as Responsible Entity for the Aveo Group Trust ARSN 099 648 754. aveo.com.au Page 1 of 2
Aveo CEO Geoff Grady said: “We are very pleased with the continued strength of our residential portfolio sell‐
down. On settlement, these sales will see the realisation of a very significant decrease in the Residential Communities and Apartments balances, which at 31 December 2013, totalled $326 million and $170 million respectively.” Settlement of the Luxe apartment project is scheduled for the June quarter of FY14 and the remaining Aerial apartments are targeted to be sold by 30 June 2014. $100 million of the Residential Apartment balance of $170 million (as at 31 December 2013) which related to these two projects will be largely settled by 30 June 2014. Geoff Grady continued: “On current rates of sale we would also expect Rochedale to be fully sold in 3‐4 years and Peregian/Ridges to be fully sold in 4‐5 years; Saltwater Coast at Point Cook is likely to be in excess of six years. While we continue to talk to interested parties, even if an en‐globo sale of one or more of the land banks were not to eventuate, we would still see the majority of the Residential Communities balance of $326 million, realised by the end of FY16. This is in line with our strategic objectives.” Further cash proceeds from non‐retirement assets sales will also be received in FY14. As a result of PBD Developments Limited’s participation in the Milton and the Yang land projects receiving PBD shareholder approval last week, Aveo Group will receive PBD’s participation fee of $28 million for Milton and $1.7m in respect of the Yang land before 30 June 2014. Net debt is targeted to be below $350 million by 30 June 2014 and will reduce by at least a further $40m from the already announced asset sales settling in FY15. Aveo Group has previously announced it would rationalise all non‐retirement assets over the medium term and has strong interest in all its remaining non‐retirement assets. END Investor Contact: David Hunt, Chief Financial Officer T +61 2 9239 5526 | E [email protected] Media Contact: Justin Kirkwood T +61 2 9231 5600 | M +61 411 251 324 | E [email protected] Page 2 of 2