Peet Limited (ASX: PPC) has reported a strong financial performance for the first half of FY25, with operating and statutory profit after tax rising 63% to $25.2 million. The results were driven by higher sales volumes in Queensland and Western Australia, continued price growth across key markets, and an increase in settlements at its Flagstone (Qld) project.
Financial performance highlights
- Operating and statutory profit after tax: $25.2 million (up 63% from 1H24)
- Earnings per share: 5.38 cents (up 64%)
- EBITDA: $46.9 million, with a 26% EBITDA margin
- Revenue: $182.5 million (up 16%)
- Lots sold: 1,370 (up 24%)
- Lots settled: 1,009 (down 9%)
- Contracts on hand: $661 million (up from $481 million as at 30 June 2024)
Peet increased its fully franked interim dividend to 2.75 cents per share, up 83% from the 1.50 cents per share paid for 1H24. The dividend is scheduled for payment on 11 April 2025, with a record date of 20 March 2025.
Operational highlights
Managing Director and CEO Brendan Gore highlighted the company’s strong performance across multiple regions:
“This improved underlying performance has been derived on the back of continuing strong performance across the portfolio, particularly from projects in Queensland, Western Australia, and South Australia. The improvement in EBITDA and margins has been driven by increased sales from our Funds Management business, continued price growth, and strong settlements at Flagstone (Qld).”
Queensland led the company’s growth, with increased lot sales and price appreciation. While total settlements declined due to lower activity in Victoria, they were partially offset by stronger performance in Queensland.
Peet’s land bank activation increased to 70% as of 31 December 2024, and the company expects this to rise to 86% over the next two years as projects move through development phases.
Capital management and balance sheet strength
As of 31 December 2024, Peet had a cash and available debt headroom of approximately $130 million, providing flexibility for future expansion. The company’s gearing was 35.3%, slightly above the 20%-30% target range, due to land acquisitions at University of Canberra (ACT) and Flagstone (Qld), as well as higher development expenditure.
Gore noted that gearing is expected to trend down as cash inflows from settlements increase in the second half of FY25.
Market outlook
Peet expects mixed market conditions for the remainder of FY25:
- Queensland – strong volume and price growth expected to continue.
- Western Australia and South Australia – moderate growth anticipated.
- Victoria – expected to remain subdued.
- ACT and New South Wales – signs of early recovery expected.
- Interest rates – expected to stabilise, with the Reserve Bank of Australia recently cutting the cash rate by 25 basis points.
Despite ongoing cost-of-living pressures, underlying market fundamentals remain positive, with strong housing demand, overseas migration, and a healthy labour market supporting long-term growth.
FY25 earnings guidance
Peet is targeting a full-year net profit after tax (NPAT) of $50 million to $55 million, supported by more than $660 million in contracts on hand and expected strong operating cash flows in the second half of the year.
