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M Winkworth PLCANNUAL REPORT2018 CONTENTS
03 Business Overview
06 Peet Values
07 Performance at a Glance
10 Chairman’s Review
14 Managing Director and CEO’s Review
17 Operating and Financial Review
23 Funds Management
25 Joint Ventures
27 Development Projects
29 Focusing on Sustainability
33 Peet in the Community
39 Promoting Healthy Active Lifestyles
41 Corporate Calendar
43 Financials
LIGHTSVIEW APARTMENTS, SA
“ The Group has evolved and broadened its capabilities and
offerings – continuing to create high-quality residential
opportunities for homebuyers across Australia, and the best
possible results for our shareholders, investors and partners”
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OVERVIEW
VISTA BLUE TOWNHOUSES SHOREHAVEN, ALKIMOS WA
“ The Group currently employs around 250 people
across Australia with expertise covering various
disciplines in the development process”
inception to delivery. We also work
with a variety of expert consultants
who are carefully selected as required
for each project.
We pride ourselves on the sound
governance framework, strong
management, breadth of business skills
and modern project management systems
and procedures which underpin all our
development and marketing activities.
In the 2018 financial year, the Group has
achieved another increase in profit on the
back of continuing strong conditions
across the east coast markets. Heading
into the 2019 financial year, our strong
balance sheet, low gearing and
geographically diversified portfolio is well
positioned for sustainable, long-term
growth and the Group will continue to
deliver an innovative and diverse mix of
product and infrastructure.
Our focus is creating high-quality,
masterplanned residential communities
that enable and inspire people of all ages
and backgrounds to achieve home
ownership, and deliver the best possible
results for shareholders, wholesale,
institutional and retail investors, and public
and private sector development partners.
The Group acquires, develops and
markets residential land, predominantly
under a capital-efficient funds
management model. We take a strategic
approach to land acquisition, and our
geographically diversified portfolio means
we are well positioned to leverage
different property cycles.
We currently have approximately 60
projects across the country, and the wide
and varying nature of these developments
reflect the evolution of the Group. We
continue to broaden our capabilities
ensuring we offer a product mix that
suits the changing lifestyles being sought
by homebuyers – this includes an
increasing focus on completed homes
and medium density products and, to a
lesser extent, apartments.
Investment in community infrastructure is
also key to the success of each and every
one of our communities – from the
delivery and/or facilitation of key
amenities such as parks and playgrounds,
shopping centres, schools, medical
centres, pharmacies, childcare centres
and other local services in some estates,
to the creation and installation of works of
public art.
The Group currently employs around 250
people across Australia with expertise
covering various disciplines in the
development process – from project
CONNECTION:
ENGAGED AND THRIVING
COMMUNITIES
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THE PEET GROUP IS COMMITTED TO PROVIDING NEW OPPORTUNITIES – FOR OUR CUSTOMERS, INVESTORS AND DEVELOPMENT PARTNERS – LEVERAGING A PIPELINE OF APPROXIMATELY 49,700 LOTS, WITH A GROSS DEVELOPMENT VALUE OF APPROXIMATELY $14 BILLION, SPREAD ACROSS EVERY MAINLAND STATE AND TERRITORY OF AUSTRALIA.Peet Annual Report 2018
6
PEET VALUES
INTEGRITY
WE act with high integrity through open,
honest and professional conduct.
TEAMWORK
WE recognise the strength of working
together and encourage the development
of our people and the sharing of knowledge.
ACCOUNTABILITY
WE respect the responsibility invested in
us and have ownership and the freedom
to act to deliver constant improvements.
ADAPTABILITY
WE embrace change and foster creativity,
initiative, innovation and embrace
progressive thinking.
RESPECT
WE treat our team, customers and
the environment with respect, dignity
and equality.
CUSTOMER SERVICE
WE strive to deliver a high standard of
prompt, efficient and courteous service to
our customers, both internal and external.
CORNERSTONE WEERRIBEE, VIC
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Peet Annual Report 2018
8
PERFORMANCE
AT A GLANCE
The Peet Group increased
operating and statutory
profit by 10% to
$49.1 million in FY18.
1 Operating profit is a non-IFRS measure that is
determined to present the ongoing activities of
the Group in a way that reflects its operating
performance. Operating profit excludes
unrealised fair value gains/ (losses) arising from
the effect of revaluing assets and liabilities and
adjustments for realised transactions outside the
core ongoing business activities.
2 Statutory profit after tax means net profit
measured in accordance with Australian
Accounting Standards, attributable to the owners
of Peet Limited.
3
Includes statutory revenue of $287.6 million
(FY17: $296.0 million) and share of net profits
from associates and joint ventures of $14.1 million
(FY17: $15.3 million).
4 EBITDA is a non-IFRS measure that includes
effects of non-cash movements in investments
in associates and joint ventures totalling
$14.1 million (FY17: $15.3 million).
5
Includes equivalent lots. Excludes
englobo sales.
6 Calculated as (Total interest-bearing liabilities
(including land vendor liabilities) less cash) / (Total
assets adjusted for market value of inventory less
cash, less intangible assets), excluding
Syndicates consolidated under AASB10.
REVENUE3 OF
$301.7m
TWO NEW
PROJECTS
COMMENCED
SALES /
DEVELOPMENT
$49.1m
OPERATING PROFIT1
AND STATUTORY PROFIT2
AFTER TAX
GEARING6 OF
18.2%
2,257
CONTRACTS
ON HAND5 AS AT
30 JUNE 2018
EBITDA4 OF
$101.3m
NET EBITDA4
MARGIN OF
34%
STRONG OPERATING
CASH FLOWS OF
$118.1m
BEFORE PAYMENTS FOR
PURCHASE OF LAND
DIVIDENDS OF
5.0 CENTS
PER SHARE,
FULLY FRANKED
EARNINGS PER SHARE OF 10.02 CENTS
TOTAL LOTS
SETTLED
2,924
TOTAL LOTS
SOLD
2,950
OPERATING PROFIT AFTER TAX ($M)
DIVIDENDS (CPS)
OPERATING EPS (CPS)
EBITDA ($M)
NET EBITDA MARGIN (%)
10%
5%
10%
11%
5%
FY16: 42.6
FY17: 44.8
FY18: 49.1
FY16: 4.5
FY17: 4.75
FY18: 5.0
FY16: 8.7
FY17: 9.14
FY18: 10.02
FY16: 89.8
FY17: 91.1
FY18: 101.3
FY16: 32%
FY17: 29%
FY18: 34%
AVON RIDGE, WA
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Peet Annual Report 2018
10
TONSLEY VILLAGE, SA
“ Peet Group, with its diversified land bank and
strong balance sheet, is well positioned for
sustainable long-term growth.”
CHAIRMAN’S REVIEW
Market conditions for us in Australian
Capital Territory / New South Wales and
South Australia remained consistent and
solid, while in Western Australian they
were subdued yet stabilising.
Peet’s methodically acquired and
geographically diversified portfolio
enabled the group to leverage
opportunities across different markets and
changing cycles throughout the financial
year, culminating in a solid profit increase,
strong operating cash in-flows and
reduced gearing.
As examples of this two Funds
Management/Joint Venture developments
commenced sales during the year – at
Eden’s Crossing in Queensland and
Tonsley Village in South Australia.
The activity generated by these new
projects and the continuing growth of the
Flagstone project in Queensland are of
significant benefit and contributed to
revenue as we saw the completion of
several successful projects in Victoria.
Having been named the preferred
proponent at the end of FY17 to partner
with the Western Australian Government
to deliver the Brabham project, the Peet
Group has now finalised a formal Project
Management Agreement to deliver this
new transit-orientated community.
Planning detail for this new community of
Brabham, which is in a prime growth
corridor of Perth, will commence in FY19.
The acquisition during the year of four
medium-density sites helps position
Peet well to further diversify product
offering to meet changing market needs
in the medium-density and completed
home market.
The year ahead
The Peet Group is well positioned for
FY19, with a diversified land bank, low
gearing and a strong balance sheet.
Approximately 70% of the Group’s land
bank was in development at year end,
and this is expected to increase to more
than 80% by FY20. To achieve that, some
significant new projects will come into
development, including Palmview in the
improving Queensland market, Brabham
in Western Australia and several
Completed Homes and Medium
Density projects.
To ensure Peet is best positioned to
maintain market share and momentum
for these projects and across all of our
activities, economic and political factors
that may influence capital markets
and the property sector will continue
to be monitored.
WELL
POSITIONED:
DIVERSIFIED LAND BANK AND
STRONG BALANCE SHEET
EDEN’S CROSSING, QLD
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ON BEHALF OF THE BOARD OF PEET LIMITED, I AM PLEASED TO PRESENT THE PEET 2018 ANNUAL REPORT. THE 2018 FINANCIAL YEAR (FY18) SAW VARIABLE MARKET CONDITIONS CONTINUE ACROSS THE AUSTRALIAN RESIDENTIAL PROPERTY SECTOR. VICTORIA SUSTAINED ITS STRONG MARKET POSITION, ALTHOUGH MODERATING FROM THE HEADY LEVELS OF FY17. THE EMPLOYMENT GROWTH AND INCREASED BUSINESS CONFIDENCE LIFTED PROPERTY DEMAND IN QUEENSLAND, PARTICULARLY IN THE AFFORDABLE PRODUCT CATEGORY.Peet Annual Report 2018
12
Much commentary has been made of the
lessening of offshore and other investor
participation in residential markets,
however such investors have not been
aggressively targeted by Peet. Indeed,
we have sought a balance weighted
towards owner occupiers rather than
investors generally.
During the year, Peet reduced its
interest-bearing debt to $217.2 million
at 30 June 2018, compared with
$249.8 million at 30 June 2017 and
also reduced its gearing to 18.2% at
30 June 2018.
We will continue to maintain a disciplined
approach to capital management and
seek to further grow our funds
management business, co-investing
with selected investors with Peet as
development manager.
Given Peet’s strong financial position and
in line with our focus on prudent capital
management and since we have seen our
share price trading at or below the book
NTA as at 30 June 2018 of $1.18, we have
announced that we will implement a
12-month on-market share buy-back of up
to 5% of our issued ordinary shares.
Peet reserves the right to suspend or
terminate the buy-back at any time so as
to have capital management flexibility and
to take advantage of acquisition
opportunities that may arise.
expected to continue into FY19, which
include moderating conditions in Victoria
and New South Wales.
The Board and Management will continue
the Group’s focus on strategic acquisitions,
while sustaining the development program
for our existing land bank, and at all times
maintaining prudent capital management
to leverage growth opportunities.
I look forward to working with my fellow
Directors and Peet Managing Director and
CEO Brendan Gore, to deliver these
outcomes. I take this opportunity to
acknowledge them, and the entire Peet
team, for the work they do to deliver
innovative and exciting communities and
investment opportunities for our company
across Australia.
I look forward to FY19 and the positive
outcomes and results we can achieve for
all of our investors, partners and the
present and future residents of our
communities.
Tony Lennon
Chairman
17 October 2018
Dividends
The Directors were pleased to declare a
final dividend for FY18 of 3.0 cents per
share, fully franked. This brings the total
dividend for FY18 to 5.0 cents per share,
fully franked, which is an increase of 5%
on the FY17 dividend (4.75 cents per
share, fully franked).
Conclusion
The Peet Group is well positioned for
sustainable long-term growth and to
manage its portfolio of projects through
the variable market conditions that are
FOCUS ON
PRUDENT
CAPITAL
MANAGEMENT
FY18
DIVIDEND
5c
$1.18
BOOK NTA
AS AT 30 JUNE 2018
“ I look forward to FY19 and the positive
outcomes and results we can achieve for all of
our investors, partners and the present and
future residents of our communities. ”
BLUESTONE MT BARKER, SA
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Peet Annual Report 2018
FINANCIAL
YEAR
14
LAKELANDS ESTATE, WA
“ Peet also enters FY19 will a strong balance sheet,
including low gearing and cash and debt facility
headroom of $148.3 million at 30 June 2018.”
MANAGING DIRECTOR AND CEO’S REVIEW
The Group achieved revenue of
$301.7 million, with 2,924 lots settled
and EBITDA of $101.3 million, up 11%
on FY17, on the back of a strong EBITDA
margin of 34%.
There were 2,950 lots sold (down 2% on
the previous year), with a gross value of
$714.5 million and we had 2,257
contracts on hand valued at $616.0 million
at 30 June 2018, compared with 2,186
contracts on hand with a gross value of
$545.7 million at 30 June in 2017. The
pipeline of contracts on hand across the
country at year end provides strong
momentum moving into FY19.
Peet also enters FY19 will a strong
balance sheet, including low gearing
and cash and debt facility headroom of
$148.3 million at 30 June 2018,
reflecting Peet’s continued focus on
prudent capital management.
Capital management initiatives
undertaken during the year included the
issue of $50 million of Peet Bonds, which
further diversified our debt structure. This
diversification helped underpin the strong
balance sheet and, together with low
gearing of 18.2% (compared to 21.4% at
30 June 2017), provides Peet with the
capacity to strategically replenish its land
bank when opportunities emerge.
Moving into FY19, the Peet Group will
continue to strive for business efficiencies
and improvements, and implement
initiatives that deliver optimal outcomes
to our investors, partners and the current
and future residents in our communities.
Group Strategy
The Group will continue to target the
delivery of quality residential
communities around Australia by
leveraging its land bank; working in
partnership with wholesale, institutional
and retail investors; and continuing to
meet market demand for a mix of product
in the growth corridors of major
Australian cities, with a primary focus on
affordable product.
Key elements of the Group’s strategy for
the year ahead and beyond include:
• continuing to deliver high-quality,
master-planned communities, adding
value and facilitating additional
investment in amenity and services
wherever possible;
• managing the Group’s land bank of
approximately 49,700 lots with a focus
on maximising return on capital
employed;
• continuing to assess opportunities to
selectively acquire residential land
holdings in a disciplined manner,
predominantly under our funds
management platform, and as
appropriate to market conditions;
• maintaining a focus on cost and the
level of debt; and
• broadening its product offering to
Completed Homes and Medium
Density.
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THE 2018 FINANCIAL YEAR WAS ANOTHER POSITIVE YEAR FOR THE PEET GROUP, WITH OUR GEOGRAPHICALLY DIVERSIFIED LAND BANK AND PRODUCT PORTFOLIO UNDERPINNING SOLID PERFORMANCE AND RESULTS.Favourable conditions on the east coast, including improving sales and settlements from the Queensland portfolio, more than offset the ongoing subdued Perth market. The Queensland land bank provides significant exposure to the improving market cycle across the state.Sales and settlements from the Group’s Queensland portfolio increased 16% and 64%, respectively, compared to FY17, with the performance underpinned by the continued growth of the Flagstone estate and the first full year of sales from the Eden’s Crossing estate.This contributed to an increase in operating profit and statutory profit, after tax, to $49.1 million, up 10% on FY17, and earnings per share of 10.02 cents, also up 10%. Peet Annual Report 2018
“ The Group is evolving and broadening
its capabilities and offerings to home-
buying customers, increasing its focus
on Completed Homes and Medium
Density products, and to a lesser extent
the apartment market.”
Traditionally, Peet has been a residential
land developer with a focus on
replenishing its land bank in a disciplined
manner in its core markets of Victoria,
Queensland and Western Australia, with
opportunistic acquisitions in other states
and territories. However, the Group is
evolving and broadening its capabilities
and offerings to home-buying customers,
increasing its focus on Completed Homes
and Medium Density products, and to a
lesser extent the apartment market.
In recent times, Peet has secured projects
to deliver Completed Homes and Medium
Density products under its funds
management, development and joint
arrangements operating segments.
One project, which will deliver traditional
product and Completed Homes and
Medium Density products is the Brabham
project in Western Australia. This project
comprises a 220-hectare landholding
22km north east of the Perth CBD and
has the potential to yield 3,000 dwellings
as well as schools, neighbourhood shops
and recreational areas.
As new Completed Homes and Medium
Density products are developed, the
Group’s EBITDA margin is expected to be
approximately 28% in FY19, which is
within the Group’s target through-cycle
EBITDA margin range of 25% to 30%.
Outlook
The Peet Group has entered FY19 in a
solid position to target growth on FY18
earnings, subject to market conditions
and the timing of settlements.
The positive outlook for the Group is
generally supported by market
fundamentals with sustained low interest
rates, strong population growth on the
east coast and modest economic growth.
Overall the varied conditions of Australia’s
residential property market are expected
to continue.
The market in Victoria is moderating as
expected with more focus placed on
location and quality. It remains supported
by continuing strong population growth
and strong public-sector investment.
Conditions in ACT and South Australia are
expected to remain supportive.
The Queensland residential market is
expected to continue to improve due to
its relative affordability, and while the
depth of market in Western Australia
continues to show improvement, we do
not anticipate a material improvement in
sales activity during FY19.
In addition to the Group’s breadth of
operations, its continued success will be
driven by the dedicated Peet team. I take
this opportunity to acknowledge and
thank the hard-working individuals who
operate across every mainland state and
territory. They share their expertise,
knowledge and enthusiasm for the
benefit of all of our shareholders,
investors, partners and residents.
I also take this opportunity to thank the
Board and shareholders of Peet Limited
for their valuable input and support during
the year.
Brendan Gore
Managing Director and
Chief Executive Officer
17 October 2018
16
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DIVERSITY:
PRODUCT MIX TO RESPOND
TO MARKET DEMAND
ATRIA APARTMENTS, ACT
LIGHTSVIEW, SA
PEET COMPLETE HOME
Peet Annual Report 2018
18
49,700 LOTS
ON-COMPLETION VALUE OF AROUND
$14.0b
2,257
$616.0m
CONTRACTS ON HAND7
GROSS VALUE OF
AS AT 30 JUNE 2018
2,924
TOTAL LOTS SETTLED
GROSS VALUE
$711.5m
11% EBITDA8
$101.3m
2,950
TOTAL LOTS SOLD
GROSS VALUE
$714.5m
STRONG OPERATING CASH FLOWS OF $118.0 MILLION11
7
Includes equivalent lots. Excludes englobo sales.
8 EBITDA is a non-IFRS measure that includes effects of non-cash movements in
investments in associates and joint ventures totalling $14.1 million (FY17: $15.3 million).
9 Operating profit is a non-IFRS measure that is determined to present the ongoing activities
of the Group in a way that reflects its operating performance. Operating profit excludes
unrealised fair value gains/ (losses) arising from the effect of revaluing assets and liabilities
and adjustments for realised transactions outside the core ongoing business activities.
10 Statutory profit after tax means net profit measured in accordance with Australian
Accounting Standards, attributable to the owners of Peet Limited.
LIGHTSVIEW, SA
11 Calculated before payments for purchase of land.
The Peet Group achieved a solid result in FY18,
recording an operating profit9 and statutory profit10
after tax of $49.1 million for the year ended 30
June 2018. This represents an increase of 10%
on FY17.
The pleasing profit performance was underpinned
by the continuing favourable conditions across the
Group’s east coast markets, where there was
continuing price growth, particularly across the
Victoria and ACT/NSW portfolios.
There was also an improvement in total sales and
settlements across the Group’s Queensland
portfolio during the year, on the back of the
Flagstone and Eden’s Crossing projects.
The Group derived EBITDA8 of $101.3 million
during FY18, compared to $91.1 million in FY17,
with a margin of 34% (FY17: 29%). The improved
EBITDA8 and EBITDA8 margin is predominantly
attributable to the price growth achieved across
the Victoria portfolio, the settlement of super lots
and a continuing focus on efficiencies across the
business.
OPERATING
AND
FINANCIAL
REVIEW
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THE FY18 RESULTS WERE UNDERPINNED BY CONTINUING FAVOURABLE CONDITIONS ACROSS EAST COAST MARKETS, AND PEET’S DIVERSIFIED PORTFOLIO OF PROJECTS ALLOWED IT TO CAPITALISE ON THE EASTERN STATES’ STRENGTH.Peet Annual Report 2018
20
“ Strong margins
continue to be achieved,
with an FY18 EBITDA12
margin of 34%.”
The performance has resulted in earnings
per share of 10.02 cents for the year
ended 30 June 2018, compared to
9.14 cents per share in FY17, representing
an increase of 10%.
At 30 June 2018, there were 2,257
contracts on hand13, with a gross value of
$616.0 million, compared with 2,186
contracts on hand13 with a gross value of
$545.7 million at 30 June in 2017.
The Group has maintained its focus
on prudent capital management and,
during 1H18, issued $50 million of Peet
Bonds, which has further diversified its
debt structure.
The Group achieved 2,950 sales (with a
gross value of $714.5 million) and 2,924
settlements (with a gross value of
$711.5 million) for the full financial year,
representing a decrease of 2% and 5%,
respectively compared with FY17. Sales
were impacted by the varied market
conditions around the country, with east
coast markets performing strongly during
the year and the Western Australian
market continuing to be subdued.
Settlements were affected by the timing
of lot settlements across projects and the
substantial completion of several
syndicated Victorian projects during FY17.
Sales and settlements from the Group’s
Queensland portfolio increased 16% and
64%, respectively, compared to FY17,
with the performance underpinned by the
continued growth of the Flagstone estate
and the first full year of sales from the
Eden’s Crossing estate.
12 EBITDA is a non-IFRS measure that includes
effects of non-cash movements in investments
in associates and joint ventures totalling
$14.1 million (FY17: $15.3 million).
13 Includes equivalent lots. Excludes englobo sales.
14 Pre-overheads.
The Group will continue to focus on
delivering high-quality, masterplanned
communities and built form projects,
adding value and facilitating additional
investment in amenity and services
wherever possible and deliver a mix of
innovative products to meet market
demand in the growth corridors of major
Australian cities, with a focus on
affordable product.
Risk management
The Group’s operating and financial
performance is influenced by a number of
risks impacting the property sector.
These include general economic
conditions, government policy influencing
a range of matters including population
growth, household income and consumer
confidence, the employment market, and
land development conditions and
requirements, particularly in relation to
infrastructure and environmental
management.
Global and domestic economic factors
which may influence capital markets and
the movement of interest rates are also
risks faced by the Group.
The property market is cyclical and, while
the Group is impacted by fluctuations in
the market, it has also proved its capacity
to manage through various cycles over a
very significant period of time.
At an individual project level, residential
property developments also face a
number of risks related to the price and
availability of capital, the timeliness of
approvals, delays in construction, and the
level of competition in the market.
The Group has a long history of managing
these risks at an individual project and
portfolio level and invests appropriately to
ensure it has the systems, skills and
processes in place to manage them.
Project portfolio
The Peet Group’s diversified land bank is
strategically located in the growth
corridors of major cities in every mainland
state and territory. The diversity is both
geographic and across our Funds
Management, Joint Ventures and
Development businesses and enables
Peet to manage the variable market
conditions around the country.
As at 30 June 2018, the Group’s total land
bank was approximately 49,700 lots with
an on-completion value of approximately
$14 billion, with more than 75% of all lots
within the Funds Management and Joint
Venture businesses. The land bank
represents approximately 17 years’ lot
supply based on current sales rates with
the Queensland land bank, representing
almost 17,400 lots, providing significant
exposure to an improving market cycle.
At the end of FY18, approximately 70%
of the Group’s land bank was in
development and this is expected to
increase to more than 80% in
development by FY20.
The Group remains disciplined and well
positioned in the management of its land
bank, with a counter cyclical strategy that
allows the Group to capitalise on strong
market conditions with a focus on
maximising return on capital employed.
Between FY12 and FY16 Peet secured
2,600 lots and 13,000 lots in Victoria and
Queensland, respectively, when pricing
and returns were attractive. Over the past
three years Peet has strategically targeted
further opportunities in Queensland as
well as in Western Australia, ensuring a
strong market position in improving
markets with a low cost base.
There are several new projects (both land
and Completed Homes and Medium
Density) expected to commence
development within the next two years.
Approximately 90% of the lots in these
projects sit within the Funds Management
and Joint Venture businesses. These
projects have an average duration of circa
8 years providing visibility of future
earnings and cash flows.
EBITDA12 COMPOSITION
BY BUSINESS TYPE14 (%)
DEVELOPMENT
FUNDS MANAGEMENT
JV’S
EBITDA12 COMPOSITION
BY GEOGRAPHY14 (%)
WA
VIC
QLD
NSW/ACT
SA
SALES COMPOSITION
BY GEOGRAPHY (LOTS)
WA
VIC
QLD
NSW/ACT
SA
SETTLEMENTS
COMPOSITION BY
GEOGRAPHY (LOTS)
WA
VIC
QLD
NSW/ACT
SA
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Peet Annual Report 2018
22
PEET COMPLETE DISPLAY HOME
15 Calculated as (Total interest-bearing liabilities
(including land vendor liabilities) less cash) / (Total
assets adjusted for market value of inventory less
cash, less intangible assets), excluding Syndicates
consolidated under AASB10.
16 Includes equivalent lots. Excludes englobo sales.
Brabham is a 220-hectare landholding,
22 kilometres north-east of the Perth
CBD which will potentially yield more
than 3,000 dwellings, as well as
schools, neighbourhood shops and
recreational areas.
The Group will continue to apply a
prudent approach to the restocking of its
landbank. Peet will remain focused on
securing the right product in the right
markets on acceptable returns. It expects
future opportunities to emerge as
competition for sites reduces due to
changing market conditions and will
continue to pursue growth with third-
party capital partners and through
capital-efficient transactions.
Capital management
The Group maintained its focus on
prudent capital management during FY18.
In the first half of the year it issued
$50 million of Peet Bonds, which has
further diversified its debt structure. This
diversification, a strong increase in cash
inflows from operations, up 19% to
$118.1 million (before payments for
purchase of land) and reduced gearing15
to 18.2% from 21.4% at 30 June 2017,
provides Peet with the capacity to
strategically replenish its landbank
when opportunities emerge.
As at 30 June 2018, interest-bearing
debt (including Peet Bonds) was down
to $217.2 million compared with
$249.8 million at 30 June 2017, with
approximately 91% hedged compared
to 89% as at 30 June 2017.
Peet enters FY19 with a strong balance
sheet, including cash and debt facility
headroom of $148.3 million as at
30 June 2018, and a weighted average
debt maturity of over two years.
On the basis of this strong financial
position and pending the emergence of
growth opportunities, the Directors
resolved to implement an on-market
share buy-back of up to 5% of the
Company’s issued shares.
Dividend payments
Subsequent to year end, the Directors
declared a final dividend for FY18 of
3.0 cents per share, fully franked.
This brings the total dividend for FY18 to
5.0 cents per share, fully franked, which is
an increase of 5% on the FY17 dividend
(4.75 cents per share, fully franked).
The dividend is to be paid on Friday,
5 October 2018, with a record date
of Friday, 21 September 2018.
CONTRACTS ON HAND16 (LOTS)
CONTRACTS ON HAND16 (VALUE)
3,000
2,500
2,000
1,500
1,000
500
0
LOTS
2,426
2,186
2,257
1,990
2,061
FY14
FY15
FY16
FY17
FY18
700
600
500
400
300
200
100
0
$
$616m
$546m
$546m
$468m
$441m
FY14
FY15
FY16
FY17
FY18
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ONE MAJOR PROJECT EXPECTED TO COMMENCE IN THE NEXT TWO YEARS IS THE BRABHAM PROJECT IN WESTERN AUSTRALIA. DURING THE YEAR, PEET ENTERED THE RELEVANT AGREEMENTS CONFIRMING ITS APPOINTMENT AS THE WESTERN AUSTRALIAN GOVERNMENT’S DEVELOPMENT MANAGER FOR BRABHAM.Peet Annual Report 2018
24
MANAGEMENT
EBITDA17
MARGIN OF
70%
1,311
$310.8m
CONTRACTS ON HAND18
WITH A TOTAL VALUE OF
AS AT 30 JUNE 2018
1,796
TOTAL LOTS SETTLED
GROSS VALUE
$352.6m
The Funds Management business performed
solidly in FY18, with the strong performance of
projects in the Victorian and Queensland markets
being offset by the performance of projects in the
weaker Western Australian market, and the
substantial completion of several syndicate
projects including Greenvale and Tarneit in Victoria.
There were 1,782 lot sales across the Group’s
Funds Management projects during the year with
a gross value of $370.0 million, compared to 1,756
lots with a gross value of $419.5 million in FY17.
A total of 1,796 lots were settled with a gross
value of $352.6 million, compared to FY17 which
saw 1,912 settlements with a gross value of
$466.6 million.
As at 30 June 2018, there were 1,311 contracts on
hand18, with a gross value of $310.8 million.
The Funds Management business continues to
provide the Group a solid, capital-lite earnings base
and, during FY18, represented 25% of the Group’s
EBITDA. While fee revenue was impacted by the
substantial completion of several Victorian projects
in FY17, decreasing to $35.2 million from $48.3
million in FY17, it is expected to increase in FY19.
17 EBITDA is a non-IFRS measure that includes effects
of non-cash movements in investments in associates.
18 Includes equivalent lots.
EBITDA17
1,782
TOTAL LOTS SOLD
GROSS VALUE
$28.3m $370.0m
BURNS BEACH, WA
FM SALES COMPOSITION
BY GEOGRAPHY (LOTS)
WA
VIC
QLD
SA
FM EBITDA17 COMPOSITION
BY GEOGRAPHY (%)
WA
VIC
QLD
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THE PEET GROUP MANAGES A NUMBER OF PROJECTS ON BEHALF OF LAND SYNDICATES AND UNDER PROJECT MANAGEMENT AND CO-INVESTMENT ARRANGEMENTS. THE FUNDS MANAGEMENT PORTFOLIO COMPRISES MORE THAN HALF THE GROUP’S TOTAL PORTFOLIO – WITH AN ON-COMPLETION VALUE OF CLOSE TO $7.6 BILLION.Peet Annual Report 2018
26
VENTURES
EBITDA19
MARGIN OF
30%
486
$154.1m
CONTRACTS ON HAND20
WITH A TOTAL VALUE OF
AS AT 30 JUNE 2018
EBITDA19
$16.6m
There were 756 lots sold during the year with a
gross value of $204.3 million, compared with
735 lots sold for $191.2 million in FY17. A total
of 690 lots settled for a gross value of
$163.0 million, compared with 741 settlements
in FY17 with a gross value of $189.9 million.
As at 30 June 2018, there were 486 contracts
on hand20 with a gross value of $154.1 million.
FY18 saw a reduced contribution from the
Group’s Joint Venture projects, predominantly
due to the product mix at Lightsview in South
Australia, and timing of settlements at Googong
in New South Wales. This was partially offset by
the commencement of earnings from Eden’s
Crossing in Queensland.
EBITDA19 derived during FY18 was $16.6 million,
down 22% on FY17 on an EBITDA19 margin of
30%, 5% lower than FY17.
At year end, the Group’s Joint Venture projects
comprised more than 11,300 lots, with an
estimated on-completion value of just over
$3.4 billion.
19 EBITDA is a non-IFRS measure that
includes effects of non-cash movements
in investments in JVs.
20 Includes equivalent lots.
690
TOTAL LOTS SETTLED
GROSS VALUE
$163.0m
756
TOTAL LOTS SOLD
GROSS VALUE
$204.3m
THE VILLAGE AT WELLARD, WA
JV SALES
BY GEOGRAPHY (LOTS)
JV EBITDA19 COMPOSITION
BY GEOGRAPHY (%)
WA
QLD
NSW/ACT
NT
SA
WA
QLD
NSW/ACT
NT
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THE PEET GROUP HAS A NUMBER OF HIGH PROFILE JOINT VENTURE PROJECTS ACROSS ITS PORTFOLIO, INCLUDING THE VILLAGE AT WELLARD IN WESTERN AUSTRALIA, LIGHSTVIEW AND TONSLEY VILLAGE IN SOUTH AUSTRALIA, GOOGONG IN NEW SOUTH WALES AND EDEN’S CROSSING IN QUEENSLAND.Peet Annual Report 2018
28
21
EBITDA
MARGIN OF
34%
460
$151.0m
CONTRACTS ON HAND22
WITH A TOTAL VALUE OF
AS AT 30 JUNE 2018
EBITDA21 OF
$67.2m
A TOTAL OF 438 LOTS SETTLED FOR
A GROSS VALUE OF $195.8 MILLION,
COMPARED WITH 424 SETTLEMENTS
IN FY17 WITH A GROSS VALUE OF
$187.8 MILLION.
There were 412 lots sold during the year with a
gross value of $140.2 million, compared with
509 lots sold for $249.6 million in FY17.
As at 30 June 2018, there were 460 contracts on
hand22 with a gross value of $151.0 million.
The increase in contribution from the Group’s
Development projects in FY18 was underpinned
by the strong Victorian market, with Aston
continuing to be a significant contributor and the
first settlements being achieved at Summerhill.
The first settlements at Lightsview Apartments
in South Australia and the settlement of super
lots also provided positive contributions. Sales at
Tonsley Village in Adelaide also commenced
during the year and settlements will commence
in FY19.
EBITDA21 was 54% higher than the previous
year, increasing to $67.2 million in FY18, with an
EBITDA margin of 34%, up 11% on FY17.
At year end, the Peet Group’s Development
projects comprised more than 11,600 lots,
with an estimated on-completion value of
more than $2.7 billion.
21 EBITA is a non-IFRS measure.
22 Includes equivalent lots. Excludes englobo sales.
ASTON CRAIGIEBURN, VIC
DEVELOPMENT SALES
COMPOSITION BY GEOGRAPHY (LOTS)
DEVELOPMENT EBITDA
COMPOSITION BY GEOGRAPHY (%)
WA
VIC
NSW/ACT
SA
WA
VIC
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438
TOTAL LOTS SETTLED
GROSS VALUE
$195.8m
412
TOTAL LOTS SOLD
GROSS VALUE
$140.2m
PROJECTSPeet Annual Report 2018
30
FLAGSTONE, QLD
“ As industry leaders, we not only build or
facilitate the provision of infrastructure and
amenities that support communities.”
PEET COMMUNITIES BECOME
A PERMANENT PART OF
AUSTRALIA’S URBAN FABRIC
– THAT’S WHY SUSTAINABILITY
IS A KEY PART OF WHAT WE
DO. WE FOCUS ON PLANNING,
DESIGNING AND DEVELOPING
COMMUNITIES THAT
CAREFULLY BALANCE THE
ENVIRONMENTAL, SOCIAL
AND ECONOMIC NEEDS OF
EVERY PROJECT.
As industry leaders, we not only build or
facilitate the provision of infrastructure
and amenities that support communities,
like roads, parks and other public open
spaces, schools, neighbourhood centres
and services, we ensure homes are
integrated with existing landscapes,
industries and neighbouring communities
so they may grow sustainably over time.
SOME OF THE HIGHLIGHTS
DURING THE 2018 FINANCIAL
YEAR INCLUDED:
Outdoor classroom at Lakelands
A unique learning opportunity is now
available at Lakelands Estate, south of
Perth, following the completion of an
outdoor classroom as part of the
development and landscaping of Black
Swan Lake. Purpose-built to help the
community learn about and connect to
the area’s rich environmental and
indigenous heritage, the outdoor
classroom is available for all schools in
the area to use and can seat up to
30 students.
Launch of Tonsley Village
A joint venture with Renewal SA, Tonsley
Village is an important part of the
award-winning Tonsley Innovation District
10km south of the Adelaide CBD. The
$265 million residential precinct
comprises 11-hectares and will offer more
than 850 modern terraces and
apartments, and 1.5ha of public open
space. Affordability is a key focus with a
minimum of 15% of the homes to be
priced at an affordable price point,
accessible to first home owners.
With its proximity to Flinders University
and Flinders Medical Centre as well as a
host of other established businesses,
institutions and other amenity, Tonsley
Village is an extremely well-located
community contributing to the social and
economic sustainability of the region.
Employment opportunities
at Flagstone
Activity within the Group’s Flagstone
project is growing, with several sales of
commercial property bringing early
amenity to the first residents – and
addressing economic, social and
environmental sustainability through job
opportunities, easy access to quality
amenities and reducing the need for
on-road transport.
A 7 Eleven service station, complete
with a drive-through fast food and coffee
outlet, opened during the year, bringing
with it the first of a projected 10,000 new
jobs that will be delivered as the city
centre grows.
INNOVATION:
WORLD-CLASS DESIGN AND
THE LATEST TECHNOLOGY
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Peet Annual Report 2018
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“ The “circle of life” ceremony celebrated
the connection between the Googong
community and the land.”
SUSTAINABILITY:
AT THE HEART OF PLANNING, DESIGN
AND DELIVERY
Construction of a shopping centre at
Flagstone was also well underway at year
end, and on track to open by the end of
the 2018 calendar year. The centre is
anchored by an IGA supermarket and
complemented by other leading retailers
including BWS, Domino’s and Snap
Fitness. Coles has also purchased a site
with plans to develop a supermarket and
specialty stores.
Celebrating Indigenous heritage
Four prominent landmarks in the new
township of Googong (NSW) were given
Aboriginal names to promote cultural
sustainability, in recognition of the area’s
Indigenous heritage which dates back
more than 20,000 years.
Representatives of the Traditional
Owners performed a traditional welcome
to country and naming ceremony, with
didgeridoo accompaniment, to formalise
the process. The “circle of life”
ceremony celebrated the connection
between the Googong community and
the land. The names were selected by
the Ngunawal people, in their traditional
language, and have been gazetted by
the NSW State Government.
Bridge to the future
A multi-million-dollar traffic bridge over
the Brisbane-Sydney rail line was opened
by Queensland Deputy Premier Jackie
Trad during the year, connecting the
future Flagstone CBD and 12,000-lot
residential development west of the line,
with the existing community of Flagstone
Rise, to the east.
The revolutionary solar “car of the future”,
Arrow 1, was the first to cross the bridge
into the future satellite city of Flagstone.
The two-lane bridge has been majority
funded through a $5 million catalyst
infrastructure funding arrangement
between Peet and our Flagstone
development partner MTAA Super, and
Economic Development Queensland.
Peet communities become home
Two Peet communities welcomed their
first residents during the year.
In August 2017, the first of 1,000
households moved into Movida Estate,
and by year end more than 200 lots had
been sold at this growing community in
Perth’s north eastern suburbs.
In Melbourne’s west, the Queen’s
Birthday long weekend marked ‘move in
date’ for the first group of homebuyers at
Cornerstone in Werribee. This
masterplanned community will ultimately
be home to more than 900 houses and
will include cycle and walking paths, two
parks and is positioned opposite 23ha of
open space earmarked for sports and
recreation development.
FLAGSTONE, QLD
GOOGONG, NSW
MOVIDA ESTATE, WA
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Peet Annual Report 2018
34
SHOREHAVEN ALKIMOS, WA
“ We also provide opportunities for people to come
together to enjoy common experiences and to create
a sense of community ownership and connection.”
Legacy across the ages
In August 2017, a group of 24 junior
legatees and 15 current serving combat
veterans came together to walk the 96km
Kokoda Track in Papua New Guinea, with
the backing and support of Peet.
Operation Legacy Australia Kokoda
Challenge 2017 commemorated the 75th
anniversary of the Kokoda campaign and
provided an opportunity for the legatees
to develop leadership and teamwork
skills.
LEGACY:
SUPPORTING YOUTH
DEVELOPMENT
THE REAL SUCCESS OF
ANY COMMUNITY IS IN
THE CONNECTIONS WE ARE
ABLE TO MAKE, AND IN THE
LIFESTYLE WE ARE ABLE
TO LIVE. AT PEET, WE PLAN OUR
COMMUNITIES AROUND THE
PEOPLE WHO ARE GOING TO
LIVE IN THEM – WITH A DIVERSE
RANGE OF HOUSING OPTIONS
TO SUIT ALL AGES AND STAGES
OF LIFE, WITH PLACES TO MEET
AND PLAY, PATHWAYS
CONNECTING FRIENDS AND
FAMILIES, RETAIL PRECINCTS
AND COMMERCIAL AREAS WITH
ALL LIFE’S CONVENIENCES, AND
SHARED COMMUNITY FACILITIES
THAT ENCOURAGE A DIVERSE
AND HEALTHY SOCIAL LIFE.
We also provide opportunities for people
to come together to enjoy common
experiences and to create a sense of
community ownership and connection.
Through the Group’s Community
Partnership Program, we support the
establishment and growth of local
organisations that help build local
community capacity.
SOME OF THE HIGHLIGHTS
DURING THE 2018 FINANCIAL
YEAR INCLUDED:
Community and corporate
partnerships
Throughout the 2018 financial year we
were pleased to support more than 30
local groups and organisations, and to
continue working alongside four corporate
partners; Military Art Program Australia,
Alongside, Legacy Australia’s Operation
Legacy Australia Kokoda Challenge 2017
and the Santos UCI Tour Down Under.
Local groups and organisations supported
include sporting teams like the Bellbridge
Cricket Club (Vic), Lightsview Cycling
team (SA), the Swimming WA – Open
Water Swim series event at Shorehaven
at Alkimos, and the Yanchep Bowls Club
(WA); community groups such as the
Golden Bay Playgroup, Rockingham and
Districts Toy Library (WA) and the
Flagstone Community Association (Qld);
and environmental initiatives like tree
planting days at Googong (NSW) and
Lakelands Estate (WA).
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Peet Annual Report 2018
36
“ The Lightsview Ride Like Crazy event has
attracted over 12,000 riders and donated in
excess of $1.5 million to charity.”
Googfest 2018
Lightsview Ride Like Crazy
Googfest continues to grow as 10,000
locals relaxed on picnic rugs to enjoy
Canberra’s home-grown talent. Promoters
put a call out for musicians to self-
nominate for the concert and local artists
Sophie Edwards, Ned Philpot,
Mondecreen and The Baker Boys Band
made it through the tough selection
process to entertain the crowd before
home-grown headliners, The Aston
Shuffle, had the residents on their feet and
dancing ahead of spectacular fireworks.
Flagstone School Colour Run
The inaugural Peet Colour Obstacle Run
was held at Flagstone to help raise funds
for the Flagstone State School.
Participants ran through obstacles such
as the tyre hop, mud hill, hay bale
mountain, water arch and rope maize
with coloured chalk and water pistols in
the event organised by the school’s P&C
to raise funds to install air conditioning in
the prep and junior classrooms of the
primary school.
Lightsview has been the major sponsor of
the Lightsview Ride Like Crazy since
2010. The event has attracted over
12,000 riders and donated in excess of
$1.5 million to charity. In addition to
supporting worthy charities, Lightsview
Ride Like Crazy provides the opportunity
to shine the spotlight on promoting
wellbeing and road safety.
Introducing a ‘Shore Thing’
The ‘Shore Thing’ event series was
introduced at Shorehaven at Alkimos on
Perth’s north coast during the year. The
series was carefully designed to offer a
calendar of events that provides
opportunities for residents and purchasers
to meet and connect with each other. The
first two events – ‘Easter Maze’ in March
and ‘Build Your Community’ in June
– were both very well supported, with in
excess of 1,000 people having attended
Shore Things events by the end FY18.
COMMUNITY
SUPPORT:
CREATING OPPORTUNITIES
TO MEET, PLAY AND CONNECT
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Peet Annual Report 2018
COMMUNITY:
MAKING REAL SOCIAL
CONNECTIONS TO FEEL A
SENSE OF BELONGING
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“ Our public spaces and variety of facilities encourage
and promote an active, healthy lifestyle.”
C R E AT ING THRIVING COMMUNITIES
AUSTRALIAN LIFESTYLES ARE
EVOLVING AND PEET IS
CREATING COMMUNITIES
THAT RESPOND TO THE
CHANGING NEEDS OF
HOMEBUYERS AT ALL STAGES
OF LIFE. RESIDENTS ACROSS
THE COUNTRY ARE MAKING
THE MOST OF THE SHARED
SPACES IN OUR COMMUNITIES
– PARKS AND OPEN SPACES
THAT ARE DESIGNED AS A
KIND OF ‘COMMUNAL
BACKYARD’ WITH PLACES TO
GET ACTIVE AND ALSO RELAX.
Peet’s communities embrace modern
urban planning and design principles and
build on them to create places that are
tailored for each individual location and
community. Our public spaces and variety
of facilities encourage and promote an
active, healthy lifestyle – and the
opportunity to relax with friends and
family in a community setting.
SOME OF THE HIGHLIGHTS
DURING THE 2018 FINANCIAL
YEAR INCLUDED:
Dog parks at Flagstone and Riverbank
The Flagstone dog park was developed as
the first stage of a multi-million-dollar
regional park open to the residents of
Flagstone. The dog park features a canine
water activity with in-ground spouts and
dog tunnels through cave-like heaped
rocks. The Riverbank residents are also
benefiting from a new dog park which
opened as part of the new Harvey Park at
the centre of Peet’s residential community.
Yanchep Golf Estate’s newest park
Stage one of the landmark two-hectare
park was opened at Yanchep Golf Estate
during the year, with a grassed kick-about
area, barbecue and picnic facilities, shade
structures and seating, a “shipwreck”
themed play area, flying fox, tunnel and
balancing ropes and a climbing mound,
slide, sand and water play elements and
monkey bars.
This is the third park and one of 20
different parks and open spaces
planned for Yanchep Golf Estate and
joins the award-winning Victory Park
and Pocket Park.
The Village at Wellard ‘Healthy Active
by Design’
During the year, our award-winning The
Village at Wellard community south of
Perth was featured as a case study by
the Heart Foundation’s Healthy Active by
Design program, shining a spotlight on
its many design features which support
healthy and active living.
The Village at Wellard is a sustainable,
transit-focused development, with
regional and local connectivity which
creates a user-friendly movement
network. Careful and clever design has
ensured that most residents live within
800m of the Wellard Train Station, and
the inclusion of shops, public open space
and schools means residents have access
to everything they need to live a healthy,
active and connected life.
Street orienteering at Googong
Residents of Googong took to the streets
to try their hand at street orienteering.
Participants (either individual or teams)
were given a map with 20 checkpoints
and, depending on which course they
selected, had to find at least some of the
checkpoints, providing people a great
reason to get out and explore the
neighbourhood.
Parkindula Village
At the heart of our Bluestone community
in Mt Barker, South Australia is Parkindula
Village, which now comprises the fully
restored historic Parkindula Homestead,
which houses the Bluestone Sales and
Information Centre, and a new premium
display village. This impressive new
community hub will also soon include
high-quality recreational facilities,
barbeque facilities, landscaped parklands,
adventure playground, and hiking and
cycling trails which were all under
construction at year end.
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YANCHEP GOLF ESTATE, WA
Peet Annual Report 2018
42
CALENDAR
21 September 2018
Record date for final FY18 dividend
5 October 2018
Payment date of final FY18 dividend
5 October 2018
Interest payment date for Peet Bond holders (PPCHB)
17 October 2018
Annual Report and notice of AGM dispatched to shareholders
21 November 2018
2018 AGM at the Parmelia Hilton Perth Hotel, Mill Street, Perth
WA at 10.00am (WST)
17 December 2018
Interest payment date for Peet Bond holders (PPCHA)
7 January 2019
interest payment date for Peet Bond holders (PPCHB)
February 2019
Release of results for the half year ending 31 December 2018
5 April 2019
Interest payment date for Peet Bond holders (PPCHB)
17 June 2019
Interest payment date for Peet Bond holders (PPCHA)
SHOREHAVEN ALKIMOS, WA
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Peet Annual Report 2018
FINANCIALS
2018
CONTENTS
44 Directors’ Report
71 Auditor’s Independence Declaration
72 Corporate Governance Statement
73 Financial Report
110 Directors’ Declaration
111
Independent Auditor’s Report to the Members of Peet Limited
118 Securityholder Information
122 Corporate Directory
Directors’ Report
Your Directors present their report on the Consolidated Entity consisting of Peet Limited (‘the Parent Entity’ or ‘the
Company’) and the entities it controlled at the end of, or during, the financial year ended 30 June 2018 (‘the Group’).
1. DIRECTORS
The following persons were Directors of the Company during part or the whole of the financial year and up to the date
of this report:
TONY LENNON
FAICD
NON-EXECUTIVE CHAIRMAN
Tony Lennon has extensive commercial experience particularly in the property industry.
Mr Lennon is a Fellow of the Australian Institute of Company Directors and an Associate of the Australian Property
Institute. A former President of the Real Estate Institute of Western Australia, he has also served as a Councillor of the
national body, the Real Estate Institute of Australia.
His industry service has included State Government appointed roles as Chairman of both the Perth Inner City Living
Taskforce and the Residential Densities Review Taskforce. He was also a Member of the Commercial Tribunal
(Commercial Tenancies).
Mr Lennon is a former President of Western Australia’s Shire of Peppermint Grove and Deputy Chairman of the National
Board of the Australia Day Council. He is also a former Chairman of the Curtin Aged Persons Foundation and a founding
Director of the Wearne and the Riversea Hostels for the Aged, both of which are locally initiated and managed
community facilities.
BRENDAN GORE
BCOMM, FCPA, FCIS, FGIA, FAICD
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Brendan Gore has been Managing Director and Chief Executive Officer (“CEO”) of Peet Limited since 2007 – successfully
leading the company through the global financial crisis, expanding its land bank and developing key new partnerships with
Government and major institutions.
Mr Gore’s appointment to the position of Managing Director and CEO followed experience in two other key executive
roles within the Company. He began with Peet as Chief Financial Officer and played a key role in expanding the
Company’s scope of activities and growing its core residential development and land syndication businesses; and in
January 2007 he was appointed inaugural Chief Operating Officer.
Mr Gore’s period in senior executive roles at Peet Limited was preceded by more than two decades’ experience in a
range of senior corporate, commercial and operational positions where he gained extensive experience in strategy
development and implementation, as well as expertise in debt and equity markets.
He developed a reputation as a strong leader, with operational responsibilities across local and State Government
relations, environmental and sustainability management and occupational health and safety.
Mr Gore is a qualified accountant and a Fellow of CPA Australia. He is also a Fellow of the Australian Institute of Company
Directors; a Fellow of the Governance Institute of Australia and a Fellow of the Chartered Institute of Secretaries and
Administrators.
1. DIRECTORS (CONTINUED)
ANTHONY LENNON
BA, GRAD DIP BUS ADMIN, MAICD
NON-EXECUTIVE DIRECTOR
1. DIRECTORS (CONTINUED)
VICKI KRAUSE
BJURIS LLB W.AUST, GAICD
INDEPENDENT NON-EXECUTIVE DIRECTOR
Anthony Lennon joined Peet in 1991 and became a Director in 1996.
Vicki Krause was appointed to the Board of Peet Limited in April 2014.
He moved to Victoria to establish Peet’s operations in Australia’s eastern states and oversaw significant expansion.
An experienced commercial lawyer, Ms Krause had a 25 year career as a senior corporate executive with the
Before joining the Company, Mr Lennon worked in the United Kingdom, where he completed his post-graduate Diploma
Wesfarmers Group, including seven years as its Chief Legal Counsel.
in Business Administration while on a Graduate Management Training Scheme with major international construction and
She supported successful outcomes in numerous significant acquisitions (including listed companies, trade sales and a
development company, John Laing PLC. His time with this global company saw him gain valuable experience in
privatisation) and divestments.
property planning, marketing, feasibility analysis and project management.
As Chief Legal Counsel and a member of the Wesfarmers Executive Committee, Ms Krause led a large legal team and
Mr Lennon’s responsibilities during his career with Peet included project management, broadacre acquisitions,
was responsible for the provision of legal advice and strategic planning in relation to the management of legal risk in the
marketing and financing and a six-year term as Chairman of one of WA’s largest conveyancing businesses.
Wesfarmers Group with key outputs including the evaluation and completion of major business projects and major
Until his transition from Executive to Non-executive Director on 27 August 2012, Mr Lennon was Peet Limited’s
supply arrangements.
National Business Development Director.
TREVOR ALLEN
BCOMM (HONS), CA, FF, FAICD
INDEPENDENT NON-EXECUTIVE DIRECTOR
Ms Krause has completed the PMD Management Course at Harvard Business School.
She is currently a director of Western Power and Chair of its People and Performance Committee.
ROBERT MCKINNON
FCPA, FCIS, FGIA, MAICD
Trevor Allen joined Peet in April 2012, with almost four decades of experience in the corporate and financial sectors,
INDEPENDENT NON-EXECUTIVE DIRECTOR
primarily as a corporate and financial advisor to Australian and international public and privately-owned companies.
Appointed as Non-executive Director in May 2014, Bob McKinnon has 40 years’ experience in finance and general
Mr Allen is an Independent Non-executive Director of Freedom Foods Group Limited, where he chairs its Audit and Risk
management positions in the light manufacturing and industrial sectors in Australia, New Zealand, and Canada.
Management Committee and is a member of its Remuneration Committee. He is also an Alternate Director, Company
Secretary and Public Officer of Australian Fresh Milk Holdings Pty Ltd and Fresh Dairy One Pty Ltd.
In addition, Mr Allen is Non-executive Director of Eclipx Group Limited, where he chairs its Audit and Risk Management
Committee and is a member of its Remuneration Committee. He has recently been appointed as a non-executive director
of TopCo Investments Pte Ltd, a Singapore company which is the holding company of Real Pet Food Company Limited.
Until recently Mr Allen was a Non-executive Director of Yowie Group Limited and Brighte Capital Pty Limited.
Prior to Mr Allen’s Non-executive roles, he held senior executive positions including Executive Director Corporate
Finance at SBC Warburg (now part of UBS), at Baring Brothers and as a Corporate Finance Partner at KPMG. At the
time of his retirement from KPMG in 2011 he was the lead partner in its National Mergers and Acquisitions group.
He is the former Managing Director of Austal Ships and Fleetwood Corporation Limited and spent 28 years with Capral
Aluminium (formerly Alcan Australia) in various financial and senior executive positions.
Mr McKinnon is also a former Non-executive Director of Bankwest, Brierty Limited, Programmed Maintenance Services
Limited and Tox Free Solutions Limited.
2. PRINCIPAL ACTIVITIES
The Group acquires, develops and markets residential land, predominantly under a capital-efficient funds
management model.
Peet was founded in Western Australia in 1895 and has expanded over the years to become Australia’s largest pure-play
residential developer. Peet has been listed on the ASX since 2004 and is focused on creating high-quality master-planned
residential communities for homebuyers across Australia, and achieving the best possible results for its shareholders,
investors and partners who include State and Federal Government agencies and major Australian institutions.
The Group employs approximately 250 people in offices throughout Australia. As at 30 June 2018, the Group managed
and marketed a land bank of more than 49,000 lots in the growth corridors of major mainland Australian cities.
There was no significant change in the nature of the activities during the year.
3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS
3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS (CONTINUED)
OPERATING AND FINANCIAL REVIEW
KEY RESULTS 1
• Operating profit2 and statutory profit3 after tax of $49.1 million, up 10%
• Earnings per share of 10.02 cents, up 10%
• FY18 dividends of 5.0 cents per share, fully franked, up 5%
• Revenue4 of $301.7 million with 2,924 lots settled
• EBITDA5 of $101.3 million, up 11%
• EBITDA5 margin of 34%
• 2,257 contracts on hand6 as at 30 June 2018
• Gearing7 of 18.2%
• Strong operating cash flows (before payments for purchase of land) of $118 million for FY18
FINANCIAL COMMENTARY
The Peet Group achieved an operating profit2 and statutory profit3 after tax of $49.1 million for the year ended 30 June
2018, which represents an increase of 10% on FY17. This represents a solid result underpinned by the continuing
favourable conditions across the Group’s east coast markets, with price growth continuing to be achieved, particularly
across the Victoria and ACT/NSW portfolios. FY18 also saw total sales and settlements improve across the Group’s
OPERATIONAL COMMENTARY
The Group achieved 2,950 sales (with a gross value of $714.5 million) and 2,924 settlements (with a gross value of
$711.5 million) for the full year, representing a decrease of 2% and 5%, respectively compared with FY17. Sales were
impacted by the varied market conditions around the country, with east coast markets performing strongly during the
year and the Western Australian and Northern Territory markets continuing to be subdued. Settlements were affected
by the timing of lot settlements across projects and the substantial completion of several syndicated Victorian projects
during FY17.
Sales and settlements from the Group’s Queensland portfolio increased 16% and 64%, respectively, compared to FY17,
with the performance underpinned by the continued growth of the Flagstone estate and the first full year of sales from
the Eden’s Crossing estate.
At 30 June 2018, there were 2,257 contracts on hand8, with a gross value of $616.0 million, compared with 2,186
contracts on hand8 with a gross value of $545.7 million at 30 June in 2017. The pipeline of contracts on hand at year end
provides strong momentum into FY19.
Funds management projects
The Group’s Funds Management business performed solidly in FY18, with the strong performance of projects in the
Victorian and Queensland markets being offset by the performance of projects in the weaker Western Australia market
and the substantial completion of sales in several syndicates in FY17 (Greenvale (Vic) and Haven (Vic)).
Queensland portfolio on the back of Flagstone and Eden’s Crossing.
• 1,782 lots sold for a gross value of $370.0 million, compared with 1,756 lots ($419.5 million) in FY17.
The Group derived EBITDA5 of $101.3 million during FY18, compared to $91.1 million in FY17, with a margin of 34%
• 1,796 lots settled for a gross value of $352.6 million, compared with 1,912 lots ($466.6 million) in FY17.
(FY17: 29%). The improved EBITDA5 and EBITDA margin is predominantly attributable to the price growth achieved
• 1,311 contracts on hand9 as at 30 June 2018 with a total value of $310.8 million, compared with 1,328 contracts9
across the Victoria and Queensland portfolio, the settlement of super lots and a continuing focus on efficiencies across
($294.9 million) as at 30 June 2017.
the business.
• EBITDA10 of $28.3 million compared with $36.7 million in FY17.
The performance has resulted in earnings per share of 10.02 cents for the year ended 30 June 2018, compared to 9.1
• EBITDA10 margin remains consistent at 70%, as per FY17.
cents per share in FY17, representing an increase of 10%.
The Group has maintained its focus on prudent capital management and during 1H18, issued $50 million of Peet Bonds,
which has further diversified its debt structure. This diversification helps underpin a strong balance sheet and, together
with low gearing7 of 18.2% (compared to 21.4% at 30 June 2017), provides Peet with the capacity to strategically
replenish its landbank when opportunities emerge.
Development projects
The increase in contribution from the Group’s Development business is underpinned by the strong Victorian market. The
Aston (Vic) project continued to be a significant contributor to earnings during the year, the first settlements were
achieved at the Summerhill (Vic) and Lightsview Apartments (SA) projects and the settlement of super lots also
contributed to FY18 performance.
The timing of new stage releases in 2H18 and the minimising of investor sales to less than 15% of sales contributed to
the fall in sales in FY18.
• 412 lots sold for a gross value of $140.2 million, compared with 509 lots ($249.6 million) in FY17.
• 438 lots settled for a gross value of $195.8 million, compared with 424 lots ($187.8 million) in FY17.
• 460 contracts on hand8 as at 30 June 2018 with a total value of $151.0 million, compared with 438 contracts8 ($138.0
million) as at 30 June 2017.
• EBITDA10 of $67.2 million compared with $43.7 million in FY17.
• EBITDA10 margin of 34%, compared with 23% in FY17.
1 Comparative period is 30 June 2017, unless stated otherwise. The non-IFRS measures have not been audited.
2 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/
(losses) arising from the effect of revaluing assets and liabilities and adjustments for realised transactions outside the core ongoing business activities.
3 Statutory profit after tax means net profit measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited.
4
Includes statutory revenue of $287.6 million (FY17: $296.0 million) and share of net profits from associates and joint ventures of $14.1 million (FY17: $15.3 million).
5 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures totalling $14.1 million (FY17: $15.3 million).
6
7 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets adjusted for market value of inventory less cash, less intangible assets), excluding Syndicates consolidated
Includes equivalent lots. Excludes englobo sales.
under AASB10.
Includes equivalent lots. Excludes englobo sales.
Includes equivalent lots.
8
9
10 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures totalling $14.1 million (FY17: $15.3 million).
3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS (CONTINUED)
3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS (CONTINUED)
Joint arrangements
GROUP STRATEGY
The reduced contribution from the Group’s Joint arrangements business in FY18 is predominantly due to reduced
contributions from Lightsview JV (SA) due to product mix and at Googong (NSW) due to timing of settlements. This has
been partially offset by the commencement of earnings from Eden’s Crossing (Qld).
The Group will continue to target the delivery of quality residential communities around Australia by leveraging its land
bank; working in partnership with wholesale, institutional and retail investors; and continuing to meet market demand for
a mix of product in the growth corridors of major Australian cities, with a primary focus on affordable product.
• 756 lots sold for a gross value of $204.3 million, compared with 735 lots ($191.2 million) in FY17.
• Key elements of the Group’s strategy for the year ahead and beyond include: continuing to deliver high-quality,
• 690 lots settled for a gross value of $163.0 million, compared with 741 lots ($189.9 million) in FY17.
masterplanned communities, adding value and facilitating additional investment in amenity and services wherever
• 486 contracts on hand9 as at 30 June 2018 with a total value of $154.1 million, compared with 420 contracts9 ($112.8
possible;
million) as at 30 June 2017.
• EBITDA10 of $16.6 million compared with $21.2 million in FY17.
• EBITDA10 margin of 30%, compared with 35% in FY17.
Land portfolio metrics
Lot sales
Lot settlements
Contracts on hand as at 30 June9
– Number
– Value
CAPITAL MANAGEMENT
FY18
2,950
2,924
2,257
FY17
3,000
3,077
2,186
$616.0 million
$545.7 million
Change
(1.7%)
(5.0%)
3.2%
–
The Group continues to apply a prudent focus on capital management and during FY18 achieved a strong increase in
cash inflows from operations (up 19% to $118 million before payments for purchase of land) and reduced gearing11 to
18.2%, from 21.4% at 30 June 2017.
At 30 June 2018, the Group had interest-bearing debt (including Peet Bonds) of $217.2 million, compared with $249.8
million at 30 June 2017. Approximately, 91% of Group’s interest-bearing debt was hedged as at 30 June 2018,
compared with 89% at 30 June 2017.
• managing the Group’s land bank of more than 49,000 lots with a focus on maximising return on capital employed;
• continuing to assess opportunities to selectively acquire residential land holdings in a disciplined manner,
predominantly under our funds management platform, and as appropriate to market conditions;
• maintaining a focus on cost and the level of debt; and
• Broadening its product offering to Completed Homes and Medium Density.
Traditionally, Peet has been a residential land developer with a focus on replenishing its land bank in a disciplined
manner under its funds management platform, focused in its core markets of Victoria, Queensland and Western
Australia, with opportunistic acquisitions in other states and territories. However, the Group has evolved and broadened
its capabilities and offerings to home-buying customers, increasing its focus on Completed Homes and Medium
Density products, and to a lesser extent the apartment market.
As new Completed Homes and Medium Density products are developed, the Group’s EBITDA12 margin is expected to
be approximately 28% in FY19, which is within the Group’s target through-cycle EBITDA12 margin range of 25% to 30%.
In recent times, Peet has secured projects to deliver Completed Homes and Medium Density products under its funds
management, development and joint arrangements operating segments.
One project that will see a mix of the traditional residential land product and newer Completed Homes and Medium
Density products is the Brabham (WA) project.
During 2H18, Peet announced it had entered the relevant agreements confirming its appointment as the Western
Australian Government’s development manager for the Brabham (WA) project, a 220-hectare landholding located in
Brabham, 22 kilometres from the Perth CBD. The Brabham (WA) project will potentially yield more than 3,000 dwellings
Peet enters FY19 with a strong balance sheet, including cash and debt facility headroom of $148.3 million as at 30 June
as well as schools, neighbourhood shops and recreational areas.
2018 and a weighted average debt maturity of over two years.
On the basis of this strong financial position and pending the emergence of growth opportunities, the Directors have
RISKS
resolved to implement an on-market share buy-back of up to 5% of the Company’s issued shares.
The Group’s operating and financial performance is influenced by a number of risks impacting the property sector.
DIVIDENDS
These include general economic conditions, government policy influencing a range of matters including population
growth, household income and consumer confidence, the employment market, and land development conditions and
Subsequent to the year end, the Directors declared a final dividend for FY18 of 3.0 cents per share, fully franked. This
requirements, particularly in relation to infrastructure and environmental management.
brings the total dividend for FY18 to 5.0 cents per share, fully franked, which is an increase of 5% on the FY17 dividend
(4.75 cents per share, fully franked). The dividend is to be paid on Friday, 5 October 2018, with a record date of Friday,
21 September 2018.
The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated.
Global and domestic economic factors which may influence capital markets and the movement of interest rates are also
risks faced by the Group.
The property market is cyclical and, while the Group is impacted by fluctuations in the market, it has also proved its
capacity to manage through various cycles over a very significant period of time.
At an individual project level, residential property developments also face a number of risks related to the price and
availability of capital, the timeliness of approvals, delays in construction, and the level of competition in the market. The
Group has a long history of managing these risks at an individual project and portfolio level.
The Group’s financial risk management policies are set out in note 16 to the Financial Report.
Includes equivalent lots. Excludes englobo sales.
Includes equivalent lots.
8
9
10 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures totalling $14.1 million (FY17: $15.3 million).
11 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets adjusted for market value of inventory less cash, less intangible assets), excluding Syndicates consolidated
under AASB10.
12 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures totalling $14.1 million (FY17: $15.3 million).
3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS (CONTINUED)
7. DIVIDENDS
OUTLOOK
The Peet Group enters FY19 with a strong balance sheet, low gearing13 and a portfolio of residential development
In August 2017, the Directors declared a final dividend of 3.0 cents per share, fully franked, in respect of the year ended
30 June 2017. The dividend of $14.7 million was paid on Wednesday, 4 October 2017.
landholdings well positioned for sustainable long-term growth.
In February 2018, the Directors declared an interim dividend of 2.00 cents per share, fully franked, in respect to the year
The outlook for the Group is generally supported by market fundamentals with sustained low interest rates, strong
population growth on the east coast and modest economic growth.
The Australian residential property market’s varied conditions are expected to continue into FY19, with some
moderation of conditions in Victoria and New South Wales expected:
• while conditions across Victoria are expected to moderate, it is supported by continuing strong population growth and
strong public sector investment;
• ACT and South Australia are expected to remain supportive;
• while the depth of market in Western Australia continues to show improvement, we do not anticipate a material
improvement in sales activity during FY19; and
• the Queensland residential market is expected to continue to improve due to its relative affordability.
The Group has moved into FY19 in a solid position to target growth on FY18 earnings, subject to market conditions and
the timing of settlements.
4. EARNINGS PER SHARE
Basic and diluted earnings per share
2018
Cents
10.02
2017
Cents
9.14
Basic earnings per share is calculated after income tax expense based on the weighted average number of shares on
issue for the year ended 30 June 2018. The weighted average number of shares on issue used to calculate earnings per
share is discussed at note 7 to the Financial Report.
5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the year.
6. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Subsequent to 30 June 2018, the Directors have resolved to implement an on-market share buy-back of up to 5% of the
Company’s issued shares.
No matters or circumstances have arisen since the end of the financial year, which have significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
subsequent financial years.
13 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets adjusted for market value of inventory less cash, less intangible assets), excluding Syndicates consolidated
under AASB10
then ending 30 June 2018. The dividend of $9.8 million was paid on Friday, 6 April 2018.
Subsequent to the year end, the Directors declared a final dividend for FY18 of 3.0 cents per share, fully franked. This
brings the total dividend for FY18 to 5.0 cents per share, fully franked, which is an increase of 5% on the FY17 dividend
(4.75 cents per share, fully franked). The dividend is to be paid on Friday, 5 October 2018, with a record date of Friday,
21 September 2018.
The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated.
8. ENVIRONMENTAL REGULATION
The Group is subject to environmental regulation by way of the Environment Protection and Biodiversity Conservation
Act 1999 in respect of its land subdivision activities nationally, as well as other environmental regulations under both
Commonwealth and State legislation.
The Group is not aware of any breaches of environmental regulations in respect of its activities. However, from time to
time, statutory authorities make enquiries, issue notices requiring documents and/or material to be provided, and
undertake investigations or audits to confirm compliance with relevant regulations.
GREENHOUSE GAS AND ENERGY DATA REPORTING REQUIREMENTS
The Group may be subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007.
This requires the Group to report its annual greenhouse gas (GHG) emissions and energy use if it has operational control
of facilities (sites) that emit greenhouse gases, produce energy, or consume energy at or above the specified GHG
emission and energy thresholds per financial year.
The Group is not required to register and report to the Clean Energy Regulator as the Group does not have operational
control for each of its projects to the relevant contractor undertaking the works, and the remainder of the Group’s
activities fall below the reporting thresholds for the FY18 reporting period.
9. INFORMATION ON DIRECTORS AND GROUP COMPANY SECRETARY
Please refer to the Board of Directors section of this report for information on Directors.
GROUP COMPANY SECRETARY
Dom Scafetta is a Chartered Accountant who has worked with Peet Limited since 1998.
Mr Scafetta began his career with major accounting firm Coopers & Lybrand (now PricewaterhouseCoopers) after
completing a commerce degree in 1993. He held a senior role with the organisation in its Business Services division and
advised a range of clients on accounting, taxation and general business matters.
After four years at Coopers & Lybrand, Mr Scafetta joined Peet as Company Accountant and Company Secretary, which
also required him to act as Company Secretary for the Company’s various syndicates and subsidiaries. Prior to Peet
being listed on the Australian Securities Exchange, Mr Scafetta was appointed Chief Financial Officer and served in that
role until February 2005, when he was appointed as Company Secretary of Peet Limited.
10. DIRECTORS’ MEETINGS
12. REMUNERATION (CONTINUED)
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the
While the statutory financial statements show total revenue of $287.6 million and earnings before interest, tax,
number of meetings attended by each Director were as follows:
depreciation and amortisation (EBITDA) of $101.3 million, Peet management remains responsible for a greater
Director
Board of
Directors
Audit & Risk Management
Committee
Remuneration
Committee
Nomination
Committee
Entitled
to Attend
Attended
Entitled
to Attend
Attended
Entitled
to Attend
Attended
Entitled
to Attend
Attended
A W Lennon
B D Gore
A J Lennon
T J Allen
V Krause
R J McKinnon
9
9
9
9
9
9
9
9
9
9
9
9
–
–
7
7
–
7
–
–
7
7
–
7
–
–
–
3
3
3
–
–
–
3
3
3
2
2
2
2
2
2
2
2
2
2
2
2
11. RETIREMENT, ELECTION AND CONTINUATION IN OFFICE OF DIRECTORS
Directors are elected at the Annual General Meeting (AGM) of the Company. Retirement will occur on a rotational basis
so that one third of the Directors, but not less than two, shall retire at each AGM. The Directors may also appoint a
Director to fill a casual vacancy on the Board or in addition to the existing Directors, who will then hold office until the
next AGM. No Director who is not the Managing Director, may hold office without re-election beyond the third AGM
following the meeting at which the Director was last elected or re-elected.
At this year’s AGM, both Mr A J Lennon and Mr T J Allen will retire by rotation and offer themselves for re-election.
Your Board of Directors recommend the re-election of Mr A J Lennon and Mr T J Allen.
12. REMUNERATION
Dear Shareholder,
Peet is pleased to present its Remuneration Report for the year ended 30 June 2018. This report sets out remuneration
information for Non-executive Directors (“NEDs”), the Managing Director and Chief Executive Officer (“MD”), and other
key management personnel (“KMP”) and focuses on the remuneration decisions made by the Board and the pay
outcomes that resulted.
The 2018 financial year represented another year of growth as Peet achieved an operating net profit after tax of $49.1
million, up 10% on the $44.8 million achieved in the 2017 financial year. During the year, Peet secured several new
projects, reduced and further diversified its debt capital strengthening its balance sheet, derived strong cash flows from
operations and continued to deliver on its strategy for growth.
To ensure Peet delivers on its growth strategy it must have the right people to lead the Group over the long-term and a
competitive remuneration framework that encourages our Leadership Team to continue to make decisions with a view
to creating long-term value for shareholders and all stakeholders.
In considering remuneration outcomes, the Board’s Remuneration Committee (Committee):
(a) balances Peet’s financial performance with the development and implementation of strategies for the long-term
benefit of the Group; and
(b) takes into account the underlying scale of Peet’s operations which are not fully identifiable from a pure focus on the
Group’s statutory accounts.
scale of business.
In addition to its own land development projects, Peet is also responsible for the management of a significant portfolio of
land development projects held within its Funds Management and Joint arrangements businesses. In addition to Group
revenues of $287.6 million and EBITDA of $101.3 million, the properties that Peet is also responsible for within its Fund
Management and Joint Arrangement Businesses generated revenues of $418.1 million and EBITDA of $84.4 million.
Accordingly, the scale of business from which Peet derives its revenues and earnings, which drive its capacity to pay
dividends to shareholders, is extensive.
Key remuneration outcomes of the Committee’s deliberations are as follows:
• The MD’s base pay for the year ended 30 June 2018 was the same as for the previous year.
• There were no increases in the base pay of the KMP (including NEDs) during the year ended 30 June 2018.
• Short–term incentives will be paid to the KMP in respect of the year ended 30 June 2018. This follows a positive
assessment of the individual members’ performance against a balanced scorecard, which includes consideration of
Group financial and strategic targets, together with individual targets.
• During the year, long-term incentive performance conditions were tested as at 30 June 2017 resulting in the partial
vesting of performance rights. The vesting was met by way of ordinary shares acquired on market during the 2018
financial year.
Peet also takes the opportunity to confirm that the MD’s base pay for the year ending 30 June 2019 will be the same as
2018, notwithstanding his contractual entitlement to an adjustment of at least CPI. The MD’s base pay was last
amended with effect from 1 July 2014. Additionally, the 2019 base pays of all other non-director KMP will remain the
same as their 2018 base pays. The base pay of the NEDs was last amended with effect from 1 July 2014. The base
NED’s and Chairman’s fee will increase by 8% from 1 July 2018.
We encourage our shareholders to use the cash value of remuneration realised table on page 60 to assess the
remuneration outcomes for KMP in the year ended 30 June 2017 and the alignment of these outcomes with the
Group’s performance.
The key difference between the cash value of remuneration realised and the statutory remuneration is the value
included in the statutory remuneration table for potential future outcomes under the long-term incentive. A value is
required to be included in the statutory remuneration table to account for long-term incentives that may or may not vest
in the future, while the value for long-term incentives included in the cash value of remuneration realised table
represents the value of shares actually received by KMP following the vesting of performance rights.
The Board is satisfied that these remuneration outcomes for the year ended 30 June 2018 are appropriately
performance-based while at the same time recognising the strategic needs of the Group, and we commend this
report to you.
Robert McKinnon
Chairman, Remuneration Committee
13. REMUNERATION REPORT (AUDITED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
The Remuneration report is set out under the following main headings:
B. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
A. SERVICE AGREEMENTS
B. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
C. DETAILS OF REMUNERATION
D. SHARE-BASED COMPENSATION
E. ADDITIONAL INFORMATION
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
The key management personnel of the Group (“KMP”) include the Non-executive Directors (“NEDs”) of the Group, and
the following executives (the “Executives”) who have authority and responsibility for planning, directing and controlling
the activities of the Group.
Name
B D Gore
P J Dumas
D Scafetta
B C Fullarton
Position
Managing Director and Chief Executive Officer
Chief Investment Officer
Group Company Secretary
Chief Financial Officer
A. SERVICE AGREEMENTS
Remuneration and other terms of employment for the Executives are formalised in service agreements. Each of these
agreements provide for the provision of performance related cash bonuses and participation, when eligible, in the Peet
Limited Employee Share Option Plan and/or the Peet Limited Performance Rights Plan. The major provisions of the
agreements are set out below.
All contracts with Executives may be terminated early by either party with 3 to 6 months notice, subject to termination
payments as detailed below.
Name
B D Gore
Terms of Agreement
On-going renewed 5 August 2011
P J Dumas
On-going commenced 4 February 2008
D Scafetta
On-going commenced 10 June 1998
Base pay including
Superannuation 1
$937,300
$485,000
$350,000
Termination Benefit 2,3
Refer below 4
3 months base pay inclusive of superannuation
3 months base pay inclusive of superannuation
B C Fullarton
On-going commenced 21 October 2013
$440,000
3 months base pay inclusive of superannuation
1. Base pays, inclusive of superannuation, for the year ended 30 June 2018. Base pays are reviewed annually by the Remuneration Committee.
2. Termination benefits are payable on early termination by Peet Limited giving notice in writing. Payment may be made in lieu of notice, other than for gross misconduct.
3. Termination benefits referred to in the above table are in addition to any statutory entitlements payable (e.g. accrued annual leave and long service leave).
4. On 5 August 2011 B D Gore renewed his contractual arrangements with the Company. Under the agreement the components of his remuneration comprise fixed annual remuneration, short-term incentives and
long-term incentives. There is no fixed termination date and the agreement is terminable on six months notice by either party. The Company may, at its option, make a payment in lieu of part or all of the notice
period and certain conditions exist in relation to payment of long-term and short-term incentives upon termination. A summary of the key contractual terms and remuneration-related arrangements was disclosed to
the market on 5 August 2011 with certain parts approved by shareholders at the 2011 AGM.
The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives
for the long-term benefit of the Company and shareholders. The Board ensures that executive reward satisfies the
following key criteria for good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage/alignment to executive compensation; and
• capital management.
In consultation with external remuneration consultants in prior financial years, the Company has structured, and continues
to evolve, an executive remuneration framework that is market competitive and complementary to our reward strategy
through the following features.
ALIGNMENT TO SHAREHOLDERS’ INTERESTS
• has a relevant measurement of financial performance as a core component of plan design;
• rewards implementation of strategy;
• focuses the Executive on other key financial and non-financial drivers of long-term value; and
• attracts and retains high-calibre executives.
In prior years, the Remuneration Committee of the Board had given consideration to the most appropriate financial
measure to align the creation of shareholder value with incentive arrangements for senior management. Consideration
was given to relative performance against comparable listed companies, measuring growth in Earnings before Interest,
Tax, Depreciation and Amortisation (EBITDA), relative performance in measures such as Return on Equity (ROE) and
Return on Capital Employed (ROCE) and absolute performance in measures such as ROE, ROCE and earnings per share.
During the 2018 financial year, the Remuneration Committee recommended to the Board, and it agreed, to assess
financial performance for the purposes of long-term incentive awards against earnings per share (EPS) growth, together
with funds under management growth. These performance measures will continue to be used for the 2019 financial year.
The Remuneration Committee and the Board will continue to assess the applicability of all short-term and long-term
related key performance indicators as they are applied in assessing performance for remuneration purposes.
ALIGNMENT TO PROGRAM PARTICIPANTS’ INTERESTS
• rewards capability and experience;
• provides a clear structure for earning rewards; and
• provides recognition for contribution.
The framework provides a mix of fixed and variable pay, and a blend of short and long-term incentives. As employees
are promoted to executive and senior management roles within the Company, the balance of this mix shifts to a higher
proportion of ‘at risk’ rewards.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
NON-EXECUTIVE DIRECTORS’ FEES (INCLUDING THE CHAIRMAN’S FEES)
Short-term performance incentives (“STI”)
Fees and payments to NEDs reflect the demands which are made on, and the responsibilities of, the NEDs. NEDs’ fees
Executives have a target STI opportunity depending on the accountabilities of their specific role and impact on the
and payments are reviewed periodically by the Remuneration Committee and the Board. The Remuneration Committee
Group’s performance. The maximum target bonus opportunity for the Executives for the years ended 30 June 2018 and
considers, as appropriate, the advice of independent remuneration consultants to ensure NEDs’ fees and payments are
2017 ranged between 50% and 100% of the relevant Executive’s base pay. However, the Board of Directors has the
appropriate and in line with the market. NEDs do not receive share options or performance rights.
discretion to pay over and above these amounts.
The NEDs’ remuneration is inclusive of committee fees and fees for their membership on any subsidiary Boards. The
Each year, the Remuneration Committee considers the appropriate targets and key performance indicators (“KPIs”) to
fees payable to NEDs and the Chairman of the Remuneration Committee and the Chairman of the Audit and Risk
link to the STI plan and the level of payout if targets are met for the Managing Director and Chief Executive Officer
Management Committee were last amended with effect from 1 July 2014. NEDs may also be entitled to fees where
(“MD”). This may include setting any maximum payout under the STI plan and minimum levels of performance to
they represent Peet on the Board of Syndicates.
trigger payment of STI. The MD will then set the STI KPIs to apply to the other Executives.
NEDs’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for
KPIs for each Executive are set by reference to the following criteria based on their specific role:
approval by shareholders. Shareholders approved a resolution at the 2012 AGM to increase the aggregate NEDs’ fees
pool to $900,000.
The NEDs do not receive any form of retirement allowance.
From 1 July 2018, the base fee (inclusive of superannuation) of the Chairman and the other NEDs will increase by 8%.
This increase does not apply to committee fees or fees paid to Directors where they represent Peet on the Board
of Syndicates.
EXECUTIVE PAY
The Company’s pay and reward framework for Executive’s has the following components:
• base pay and benefits;
• short-term performance incentives; and
• long-term performance incentives.
The combination of these comprises the total remuneration for the individual concerned.
Base pay and benefits
• financial;
• strategy;
• stakeholder engagement;
• people and processes improvements; and
• health, safety and environment.
For the year ended 30 June 2018, the MD and other Executives were assessed as follows against the KPIs:
Category
Financial
Strategic
Stakeholder
People and processes improvements
Health, safety and environment
Weighting
Executives
60.0%
15.0% to 40.0%
0.0% to 5.0%
0.0% to 25.0%
0.0% to 5.0%
MD
60.0%
25.0%
5.0%
5.0%
5.0%
MD1
60.0%
23.0%
5.0%
5.0%
5.0%
% Achieved
Executives2
60.0%
5.0% to 30.0%
0.0% to 5.0%
0.0% to 25.0%
0.0% to 5.0%
100.0%
100.0%
98.0% 75.0% to 100.0%
% Forfeited
Executives
0.0%
8.0% to 10.0%
0.0%
0.0%
0.0%
8.0% to 10.0%
MD
0.0%
2.0%
0.0%
0.0%
0.0%
2.0%
The base pay for Executives is structured as a total employment cost package, which may be delivered as a mix of cash
and prescribed non-financial benefits and includes superannuation.
89.0% of the MD’s FY18 STI is payable on announcement to the market of the FY18 results; 9.0% is deferred to the achievement of certain follow-up actions; and 2.0% is forfeited.
1
2. 85.0% of the Chief Investment Officer’s FY18 STI is payable on announcement to the market of the FY18 results; 5.0% is deferred to the achievement of certain follow-up actions and 10.0% is forfeited.
For the year ended 30 June 2017, the KPI’s linked to STI plan were based on similar criteria.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. As and when
considered appropriate, external remuneration consultants provide analysis and advice to ensure base pay is set to
reflect the market for a comparable role. Base pay is reviewed annually to ensure it remains competitive with the
market. There were no changes to the quantum of total base pay for Executives during the 2018 financial year.
Long-term incentives (“LTI”)
Traditionally, the Company has provided its Executives with LTI through participation in the Peet Limited Employee
Share Option Plan (“PESOP”) and/or the Peet Limited Performance Rights Plan (“PPRP”).
Executives have a target LTI opportunity depending on the accountabilities of their specific role and impact on the
Group’s performance. The maximum target opportunity for the Executives for the years ended 30 June 2018 and 2017
ranged between 50% and 100% of the relevant Executive’s base pay.
Each year, the Remuneration Committee considers the appropriate targets and KPIs to link to the LTI plan and the level
of payout if targets are met for the Executives. This may include setting any maximum payout under the LTI plan and
minimum levels of performance to trigger payment of LTI. Further details of the Company’s LTI structures are included
in the section titled ‘Share-based compensation’.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
C. DETAILS OF REMUNERATION
Details of the statutory and cash value of remuneration of each member of the KMP of the Group are set out in the
tables following.
The statutory disclosures required by the Corporations Act 2001(Cth), as amended and its regulations are set out in the
table on page 60. The company believes that the additional information provided in table below is useful to investors.
The table below sets out the total cash value of remuneration realised for the KMP and provides shareholders with
details of the “take-home” pay received/ receivable during the year. These earnings include cash salary and fees, bonus,
superannuation, non-cash benefits received/ receivable during the year and the value of shares issued to, or acquired on
behalf of, KMP following the vesting of Performance Rights (“PRs”) during the financial year. The table does not include
the accounting value of share-based payments consisting of PRs granted in the current and prior years required for
statutory purposes. This is because those share-based payments are dependent on the achievement of performance
hurdles and so may or may not be realised.
Cash
salary and
fees 1
Bonus 2
Value of
PRs vested 3
Other 4
Superannuation
Total
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
A J Lennon
B D Gore
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
Total
2018
2017
2018
2017
2018
2017
2018
2017
216,847
216,712
136,283
136,283
86,055
59,574
108,886
108,886
146,055
146,055
917,251
917,685
1,611,377
1,585,195
460,000
454,998
329,951
330,383
415,000
404,998
1,204,951
1,190,379
–
–
–
–
–
–
–
–
–
–
918,554
890,435
918,554
890,435
261,900
267,720
161,000
175,000
198,000
165,000
620,900
607,720
–
–
–
–
–
–
–
–
–
–
856,369
1,007,244
856,369
1,007,244
259,844
305,494
148,470
166,029
201,004
235,208
609,318
706,731
–
–
–
–
–
–
–
–
–
–
10,000
10,000
10,000
10,000
–
–
–
–
–
–
–
–
20,453
20,588
12,947
12,947
8,175
34,656
10,344
10,344
8,175
8,175
237,300
237,300
149,230
149,230
94,230
94,230
119,230
119,230
154,230
154,230
20,049
2,722,223
19,615
80,143
2,844,979
3,476,443
106,325
3,599,199
25,000
30,000
20,049
19,615
25,000
35,000
70,049
84,615
1,006,744
1,058,212
659,470
691,027
839,004
840,206
2,505,218
2,589,445
1. Cash salary and fees, as well as fees paid to Directors for their directorship on Syndicate Boards.
2. All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year.
3. Amount paid by the Company in order to settle the PRs exercised during year ended 30 June 2018. The Company purchased ordinary shares in the Company on-market on behalf of KMP.
4. Other includes termination benefits, long service payments, motor vehicle costs, car-parking and other benefits.
The table below is calculated in accordance with statutory obligations and Australian Accounting Standards. The
amounts in the “Share-based payments” column relate to the component of the fair value of awards from the current
year and prior years made under the various incentive plans attributable to the year measured in accordance with AASB
2 Share-based Payments.
Short-term
benefits
Post-employment
benefits
Share-based
payments
Bonus 2
Other 3
Superannuation
Shares/Options/
Performance
Rights 4
Termination
benefits
Cash salary
and fees 1
$
216,847
216,712
136,283
136,283
86,055
59,574
108,886
108,886
146,055
146,055
$
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
917,251
918,554
10,000
917,685
890,435
10,000
1,611,377
918,554
10,000
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
A J Lennon
B D Gore
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
$
20,453
20,588
12,947
12,947
8,175
34,656
10,344
10,344
8,175
8,175
20,049
19,615
80,143
1,585,195
890,435
10,000
106,325
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
Total
2018
2017
2018
2017
2018
2017
2018
2017
460,000
261,900
454,998
267,720
329,951
161,000
330,383
175,000
415,000
198,000
404,998
165,000
1,204,951
620,900
1,190,379
607,720
–
–
–
–
–
–
–
–
25,000
30,000
20,049
19,615
25,000
35,000
70,049
84,615
$
–
–
–
–
–
–
–
–
–
–
972,099
881,976
972,099
881,976
302,842
264,691
182,122
156,805
228,953
201,498
713,917
622,994
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
237,300
237,300
149,230
149,230
94,230
94,230
119,230
119,230
154,230
154,230
2,837,953
2,719,711
3,592,173
3,473,931
1,049,742
1,017,409
693,122
681,803
866,953
806,496
2,609,817
2,505,708
1. Cash salary and fees include fees paid to Directors for their directorship on Syndicate Boards.
2. All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year.
3. Other includes motor vehicle costs, car-parking and other benefits.
4. The value placed on options and performance rights in the table above is based on the valuation at the date of grant using a Black-Scholes model (options) or Binomial Model, pro-rated over the period from grant
date to vesting date. These do not represent the value of equity benefits that vested in favour of KMP during the year.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
The relative proportions of remuneration that are linked to performance and those that are fixed based on the table are
CONSIDERATION
Unless the Board determines otherwise, no payment will be required for a grant of options and/or PRs under the PESOP
and/or PPRP.
EXERCISE CONDITIONS
Generally, as a pre-condition to exercise, any exercise conditions in respect of an option and/or PR must be satisfied.
However, the Board has the discretion to enable an option and/or PR holder to exercise options and/or PRs where the
exercise conditions have not been met, including, for example, where a court orders a meeting to be held in relation to a
proposed compromise or arrangement in respect of the Company, or a resolution is passed, or an order is made, for
winding up the Company.
Options granted under the PESOP and PRs granted under the PPRP carry no dividend or voting rights.
LAPSE OF OPTIONS AND/OR PRS
Unexercised options and/or PRs will lapse upon the earlier to occur of a variety of events specified in the rules of the
PESOP and PPRP including, on the date or in circumstances specified by the Board in the invitation, failure to meet the
options’ or PRs’ exercise conditions in the prescribed period or on a specified anniversary date of grant of the options or
PRs, as determined by the Board.
as follows:
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
A J Lennon
B D Gore
Fixed remuneration
2018
100%
100%
100%
100%
100%
33%
2017
100%
100%
100%
100%
100%
35%
48%
51%
55%
At risk STI
2018
2017
At risk LTI
20181
20171
-
-
-
-
-
33%
25%
23%
23%
-
-
-
-
-
33%
26%
26%
20%
-
-
-
-
-
34%
29%
26%
26%
-
-
-
-
-
32%
26%
23%
25%
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
46%
51%
51%
1. Since LTI are provided exclusively by way of options and/or PRs, the percentages disclosed also reflect the value of remuneration consisting of options and/or PRs based on the value of options and/or PRs expensed
during the year.
D. SHARE-BASED COMPENSATION
Options over shares in Peet Limited are granted under the PESOP, which was approved by the Board and shareholders
during the 2004 financial year. PRs over shares in Peet Limited are granted under the PPRP, which was approved by
shareholders at the 2008 AGM. Changes have been made since to allow for changes in taxation of PRs. Employees of
any Group Company (including an Executive Director) will be eligible to participate in the PESOP and/or PPRP at the
discretion of the Board.
The PESOP and PPRP are designed to provide long-term incentives for Executives to deliver long-term shareholder
returns. Under the plans, participants are granted options and/or PRs, which only vest if the employees are still
employed by the Group at the end of the vesting period, subject to the Board’s discretion, and any set performance
hurdles have been met.
INVITATIONS TO APPLY FOR OPTIONS AND/OR PERFORMANCE RIGHTS
Eligible employees, at the discretion of the Board, may be invited to apply for options and/or PRs on terms and
conditions to be determined by the Board including as to:
• the method of calculation of the exercise price of each option;
• the number of options and/or PRs being offered and the maximum number of shares over which each option and/or
PR is granted;
• the period or periods during which any of the options and/or PRs may be exercised;
• the dates and times when the options and/or PRs lapse;
• the date and time by which the application for options and/or PRs must be received by Peet; and
• any applicable conditions which must be satisfied or circumstances which must exist before the options and/or PRs
may be exercised.
Eligible employees may apply for part of the options and/or PRs offered to them, but only in specified multiples.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
2
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T
The issue of a share-based payment award to a Director requires shareholder approval and the value at grant date is
taken as the date at which that approval is granted. Accordingly, the value of these PRs is based on 26 November 2014,
25 November 2015, 23 November 2016 and 29 November 2017, being the dates of Peet Limited’s, 2014, 2015, 2016
and 2017 AGMs, respectively.
NOTE 2
These options are convertible to ordinary shares on a 1:1 basis at the exercise price after the fourth anniversary of the
grant date.
The exercise condition in respect of these options is that Mr Gore remains employed as Managing Director for a period
of four years. Although the service period requirement has been met, the options have not been exercised.
NOTE 3
These PRs are convertible to ordinary shares on a 1:1 basis, with 40% subject to the Funds Under Management (FUM)
growth vesting condition.
FUM growth is measured as the total of the following during the performance period:
• the purchase price (ex GST) of land acquired by a Peet syndicate or Joint Venture; or
• the market value (ex GST) of land for which Peet has been appointed development manager at the time of its
appointment; or
• the selling price (ex GST) of land sold by Peet, a Syndicate, a Joint Venture or Peet-managed project to a third party
and Peet is appointed the development manager (and where applicable, to manage the leasing) of a commercial,
industrial, retail or residential built-form project on that property; or
• in all other property funds management-related transactions, as determined by the Board of Directors.
The aggregate of the FUM growth during the performance period is reduced by the equity interest retained by the
Group and is then compared to the rolling three-year FUM growth target set by the Board.
Of the PRs subject to FUM growth, the proportion to vest will be as follows:
Performance level
Less than the target
Target
Aggregate FUM growth target
during performance period
Proportion of performance rights
that may be eligible to vest
Less than $60 million
$60 million
0%
50%
Target – medium
$60 million to $100 million
Medium – maximum
$100 million to $150 million
Pro-rata between 50% and 70%
Pro-rata between 70% and 100%
Maximum
Greater than $150 million
100%
The Group achieved FUM growth of $187.7 million for the three-year performance period ended 30 June 2017.
Accordingly, the performance condition was fully met and on 22 August 2017 the Directors resolved that 100% of the
FY15 PRs thereto vested.
The FY16, FY17 and FY18 PRs remain unvested.
NOTE 4
These PRs are convertible to ordinary shares on a 1:1 basis, with 60% subject to the ROAFE vesting condition,
measured over a three-year period from 1 July 2014 to 30 June 2017 (“FY15 Performance Period”). ROAFE is measured
as the average of the earnings before interest, tax and write-downs of inventories and/or development costs or
increases in the carrying value of inventories (EBIT) divided by the average of the sum of net debt, convertible notes,
contributed equity, non-controlling interests and retained earnings.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
The ROAFE is compared to the Board’s internal target ROAFE for the FY15 Performance Period.
NOTE 6
Of the PRs subject to ROAFE, the proportion to vest will be as follows:
Performance level
Proportion of performance rights that may be eligible to vest
Less than 75% of the target
75% of the target
0%
30%
75% to 85% of the target
Pro-rata between 30% and 50%
85% to 100% of the target
Pro-rata between 50% and 70%
100% to 110% of the target
Pro-rata between 70% and 100%
Greater than 110% of the target
100%
The Group achieved underlying ROAFE of 13.0% against the target of 12.8% for the three-year performance period
ended 30 June 2017. Accordingly, the ROAFE performance condition attached to the FY15 PRs was partially met and on
22 August 2017 the Directors resolved that 74% of the FY15 PRs relating thereto vested.
NOTE 5
These PRs are convertible to ordinary shares on a 1:1 basis, with 60% subject to the ROCE vesting condition, measured
These PRs are convertible to ordinary shares on a 1:1 basis, with 60% subject to the EPS growth vesting condition,
measured over a three-year period from 1 July 2017 to 30 June 2020 (“FY18 Performance Period”).
EPS growth is then compared to the Board’s internal target EPS growth for the FY18 Performance Period.
The earnings component of EPS is calculated as net profit measured in accordance with Australian Accounting
Standards, excluding write-downs of inventories and development costs and increases in the carring value of inventories
during the relevant financial year, and is subject to other adjustments at the Board’s discretion.
Of the PRs subject to EPS growth, the proportion to vest will be as follows:
Performance level
Proportion of performance rights that may be eligible to vest
Less than 80% of the EPS target
80% of the EPS target
0%
50%
80% to 100% of the EPS target
Pro-rata between 50% and 80%
100% to 120% of the EPS target
Pro-rata between 80% and 100%
Greater than 120% of the EPS target
100%
over a three-year period from 1 July 2015 to 30 June 2018 (“FY16 Performance Period”) and 1 July 2016 to 30 June
The FY18 PRs remain unvested.
2019 (“FY17 Performance Period”), respectively.
ROCE is measured the same way as the ROAFE vesting condition that was used in respect of prior years’ grants.
Of the FY16 PRs subject to ROCE, the proportion to vest will be as follows:
Performance level
Proportion of performance rights that may be eligible to vest
Less than 75% of the target
75% of the target
0%
30%
75% to 85% of the target
Pro-rata between 30% and 50%
85% to 100% of the target
Pro-rata between 50% and 70%
100% to 110% of the target
Pro-rata between 70% and 100%
Greater than 110% of the target
100%
Of the FY17 PRs subject to ROCE, the proportion to vest will be as follows:
Performance level
Proportion of performance rights that may be eligible to vest
Less than 90% of the target
90% of the target
0%
30%
90% to 95% of the target
Pro-rata between 30% and 50%
95% to 100% of the target
Pro-rata between 50% and 65%
100% to 105% of the target
Pro-rata between 65% and 100%
Greater than 105% of the target
100%
The FY16 and FY17 PRs remain unvested.
OPTION AND PERFORMANCE RIGHTS HOLDINGS
The number of options and PRs over unissued ordinary shares in the Company held during the financial year by the KMP
of the Group, including their personally-related entities, is set out below. When exercisable, each option and PR is
convertible into one ordinary share of Peet Limited.
Balance
at the start
of the year
Granted
during
the year
Exercised
during
the year
Lapsed/forfeited
during the year 1
Balance
at end of
the year
Vested and
exercisable
at the end of
the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,027,031
874,347
(703,809)
(130,088)
4,067,481
1,200,000
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
A J Lennon
B D Gore
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
871,826
516,704
663,552
271,455
163,246
205,224
(213,553)
(122,020)
(165,196)
(39,472)
(22,553)
(30,534)
890,256
535,377
673,046
–
–
–
1.
Includes performance rights for which performance conditions were not met for the performance period.
During the year ended 30 June 2018, 1,204,578 PRs (2017: 1,713,975) had vested and were exercised by KMP at $ Nil
exercise price. In order to settle the PRs exercised during year ended 30 June 2018, the Company purchased ordinary
shares in the Company on-market on behalf of KMP.
Since 30 June 2018, no PRs were vested. No other options and PRs have been issued. Refer note 24 of the financial
report for the total options and PRs outstanding.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
E. ADDITIONAL INFORMATION
PERFORMANCE OF PEET LIMITED
The overall level of executive compensation takes into account the performance of the Group. STI is generally based on
an assessment of performance over a 12-month period, while LTI is generally assessed over a three-year period. The
high-level performance of the Group over the last five years is compared below:
Net profit after tax (NPAT)
NPAT growth
$'000
Growth%
Net operating profit after tax (NOPAT)
$'000
NOPAT growth
Basic EPS
Basic EPS growth
Operating EPS
Operating EPS growth
Dividends paid/payable
Share price 30 June
Share price growth
2014
30,291
3342.2%
31,555
72.0%
7.0
7.3
35.2%
3.5
1.35
2015
38,460
27.0%
38,460
21.9%
8.26
18.0%
8.26
13.2%
4.5
1.15
2016
42,592
10.7%
42,592
10.7%
8.70
5.3%
8.70
5.3%
4.5
0.94
2017
44,792
5.2%
44,792
5.2%
9.14
5.1%
9.14
5.1%
4.75
1.20
20.5%
(14.8%)
(18.3%)
27.7%
2018
49,112
9.6%
49,112
9.6%
10.02
9.6%
10.02
9.6%
5.00
1.32
10%
Growth%
2592.3%
Growth%
cents per share
cents per share
Growth%
cents per share
$
Growth%
Cash Bonus
Options & Performance Rights
Paid/
payable
%
Forfeited/
deferred
%
Financial year
Granted
Vested 1
%
Forfeited 1,2
%
Financial years
in which
options/PRs
may vest
Maximum total
value of grant
yet to vest
$
Other key management personnel
P J Dumas
90%
10%
D Scafetta
92%
8%
B C Fullarton
90%
10%
2018
2017
2016
2015
2018
2017
2016
2015
2018
2017
2016
2015
–
–
–
–
–
–
84.4%
15.6%
–
–
–
–
–
–
84.4%
15.6%
–
–
–
–
–
–
84.4%
15.6%
2020
2019
2018
2018
2020
2019
2018
2018
2020
2019
2018
2018
235,187
93,583
–
–
141,436
112,506
–
–
177,805
141,435
–
–
DETAILS OF REMUNERATION: CASH BONUSES, OPTIONS AND PRs
1.
2.
Includes performance rights for which performance conditions were met for the performance period ended 30 June 2017 and confirmed by the Directors after balance date.
Includes performance rights for which performance conditions were not met for the performance period
For each cash bonus, grant of options and/or PRs included in the tables within the remuneration report, the percentage
of the available bonus or grant that was paid, or that vested and the percentage that was forfeited because the person
did not meet the service and performance criteria, is set out below. Generally, no part of the bonuses forfeited is
payable in future years. Subject to the rules of the PESOP and PPRP no options or PRs will vest if the conditions are not
satisfied, subject to the discretion of the Board, hence the minimum value of the option and PRs yet to vest is nil. The
maximum value of the options and PRs yet to vest has been determined as the amount of the grant date fair value of
the options and PRs that is yet to be expensed.
Cash Bonus
Options & Performance Rights
Paid/
payable
%
Forfeited/
deferred
%
Financial year
Granted
Vested 1
%
Forfeited 1,2
%
Financial years
in which
options/PRs
may vest
Maximum total
value of grant
yet to vest
$
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
A J Lennon
B D Gore
–
–
–
–
–
–
–
–
–
–
98%
2%
–
–
–
–
–
2018
2017
2016
2015
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
84.4%
15.6%
–
–
–
–
–
2020
2019
2018
2018
–
–
–
–
–
774,442
284,385
–
–
Further details relating to options and/or PRs, either granted, exercised or lapsed during the year, are set out below. The
amounts below are calculated in accordance with Australian Accounting Standards. The KMPs exercised 1,204,578 PRs
over shares in the Company and received shares in the Company during the 2018 financial year. Please refer to previous
pages of the Remuneration Report for commentary on vesting conditions met during the performance period ended 30
June 2018.
Directors
B D Gore
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
Remuneration consisting
of options &
performance rights 1
Value of options &
performance rights
granted 2
Value of options &
performance rights
exercised 3
34%
29%
26%
26%
1,161,133
352,620
212,057
266,586
749,556
200,312
114,454
154,954
The percentage of the value of remuneration consisting of options and PRs, based on the value of options and PRs expensed during the current year.
1.
2. The value at grant date calculated in accordance with AASB 2 Share-based payments of options and/or PRs granted during the year as part of remuneration.
3. The value at exercise date of options and/or PRs that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options and/or PRs at that date.
LOANS TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
There were no loans made to KMP, or their personally-related entities, during the financial year.
13. REMUNERATION REPORT (AUDITED) (CONTINUED)
15. NON-AUDIT SERVICES
VOTING AND COMMENTS MADE AT THE COMPANY’S 2017 ANNUAL GENERAL MEETING
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
The instructions given to validly appointed proxies in respect of the resolution pertaining to the Company’s 2017
Remuneration Report were as follows:
For
272,512,990
96.4%
Against
9,837,066
3.5%
Proxy’s discretion
219,519
0.1%
Abstain
446,559
The motion was carried as an ordinary resolution on show of hands.
INTERESTS IN THE SHARES AND BONDS OF THE COMPANY
Directors
A W Lennon
T J Allen
V Krause
R J McKinnon
B D Gore
A J Lennon
Balance at
the start of
the year
97,314,685
92,054
–
50,000
4,533,238
1,331,344
Other key management personnel
P J Dumas
D Scafetta
B C Fullarton
874,329
996,138
235,208
Shares
Received
during the
year on
exercise of
PRs
Other
changes
during the
year
Balance at
the end of
the year
Balance at
the start of
the year
–
–
–
–
703,809
–
213,553
122,020
165,196
–
–
–
–
–
–
–
–
–
97,314,685
92,054
–
50,000
5,237,047
1,331,344
1,087,882
1,118,158
400,404
3,000
5,114
1,000
500
–
500
–
–
–
Bonds
Other
changes
during the
year
1,875
–
–
–
–
–
–
–
–
Balance at
the end of
the year
4,875
5,114
1,000
500
–
500
–
–
–
Since 30 June 2018, no PRs were vested. No other options and PRs have been issued.
END OF REMUNERATION REPORT (AUDITED)
14. INDEMNITY OF OFFICERS AND AUDITORS
During the financial year, the Company paid a premium in respect of a Directors’ and Officers’ insurance policy that
insures Directors and Officers of the Company. The liabilities insured are costs and expenses that may be incurred in
defending civil or criminal proceedings that may be brought against the Directors and Officers in their capacity as such.
The Directors have not included more specific details of the nature of the liabilities covered or the amount of the premium
paid in respect of Directors’ and Officers’ liability, as such disclosure is prohibited under the terms of the contract.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). The indemnity does not apply to any loss in respect of any matters which are finally determined to have
resulted from the auditors’ negligent, wrongful or willful acts or omissions. No payment has been made to indemnify
the auditors during or since the financial year.
auditor’s expertise and experience with the Company and/or the Group are considered important.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk
Management Committee, is satisfied that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the
provision of non-audit services by the auditor did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not
impact the impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants.
The fees that were paid or payable for services provided by the auditors of the Group, its related practices and non-
related audit firms is set out in note 21 of the Financial Report.
16. AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration, as required under section 307C of the Corporation Act 2001, is set
out on page 71.
17. ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to the “rounding off” of amounts in the Director’s Report. Amounts in the Director’s
Report have been rounded off in accordance with that legislative instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Signed for and on behalf of the Board in accordance with a resolution of the Board of Directors.
Brendan Gore
Managing Director and Chief Executive Officer
Perth, Western Australia
23 August 2018
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Corporate Governance Statement
A copy of the Group’s corporate governance policies and practices in place during the financial year ended 30 June 2018
is available at the following link:
www.peet.com.au/corporate-governance-statement-2018
Auditor’s Independence Declaration to the Directors of Peet Limited
Unless otherwise stated, these are consistent with the 3rd edition of the ASX Corporate Governance Council’s
As lead auditor for the audit of Peet Limited for the financial year ended 30 June 2018, I declare to the
best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Peet Limited and the entities it controlled during the financial period.
Principles and Recommendations (released March 2014).
Ernst & Young
G Lotter
Partner
23 August 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
71
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Revenue
Expenses
Finance costs (net of capitalised borrowing costs)
Share of net profit of associates and joint ventures
Profit before income tax
Income tax expense
Profit for the year
Attributable to:
Owners of Peet Limited
Non-controlling interests
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Realised losses on cash flow hedges transferred to profit or loss
Unrealised gains/(losses) on cash flow hedges
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Owners of Peet Limited
Non-controlling interests
Notes
5
6
6
10
8
2018
$’000
287,619
(223,856)
(10,232)
14,081
67,612
(18,972)
48,640
49,112
(472)
48,640
3,129
(862)
(680)
1,587
50,227
50,699
(472)
50,227
Earnings per share for profit attributable to the ordinary equity holders of the Company
Basic and diluted earnings per share
Notes
7
Cents
10.02
2017
$’000
296,043
(240,609)
(8,337)
15,326
62,423
(18,163)
44,260
44,792
(532)
44,260
2,307
1,857
(1,249)
2,915
47,175
47,707
(532)
47,175
Cents
9.14
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
Financial
Report
Contents
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................ 74
Consolidated Balance Sheet ............................................................................................................................................. 75
Consolidated Statement of Changes in Equity ................................................................................................................. 76
Consolidated Statement of Cash Flows ............................................................................................................................ 77
Notes to the Consolidated Financial Statements .............................................................................................................. 78
This financial report covers the consolidated
financial statements for the Group consisting of
Peet Limited and its subsidiaries. The financial
report is presented in Australian currency. Peet
Limited is a for profit company limited by
shares, incorporated and domiciled in Australia.
Its registered office and principal place of
business is; Level 7, 200 St Georges Terrace,
Perth WA 6000. The financial report was
authorised for issue by the Directors on 23
August 2018. The Directors have the power to
amend and reissue the financial report. Through
the use of the internet, we have ensured that
our corporate reporting is timely and complete.
All press releases, financial reports and other
information are accessible via our website;
www.peet.com.au
73 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 74
Consolidated Balance Sheet
Consolidated Statement
of Changes in Equity
Current assets
Cash and cash equivalents
Receivables
Inventories
Total current assets
Non-current assets
Receivables
Inventories
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current liabilities
Payables
Land vendor liabilities
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Land vendor liabilities
Borrowings
Derivative financial instruments
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained profits
Capital and reserves attributable to owners of Peet Limited
Non-controlling interest
Total equity
Notes
11
9
11
9
10
12
13
16
14
13
16
16
8
14
17
17
2018
$’000
76,749
27,392
119,259
223,400
95,665
375,540
222,820
5,411
6,087
705,523
928,923
82,066
14,700
–
15,398
5,826
117,990
5,380
217,204
3,777
32,844
285
259,490
377,480
551,443
385,955
3,397
150,871
540,223
11,220
551,443
2017
$’000
88,367
53,319
133,237
274,923
78,002
352,919
213,448
8,298
6,251
658,918
933,841
69,492
15,975
5,791
4,698
6,245
102,201
17,853
244,017
4,551
39,698
199
306,318
408,519
525,322
385,955
1,417
126,258
513,630
11,692
525,322
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Balance at 1 July 2016
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Non-reciprocal contribution to
a controlled entity
Capital return to
non-controlling interests
Vesting of performance rights
Share-based payments
Dividends paid
Balance at 30 June 2017
Balance at 1 July 2017
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Vesting of performance rights
Share-based payments
Dividends paid
Balance at 30 June 2018
Contributed
equity
$’000
Reserves
$’000
Retained
profits
$’000
Non-controlling
interest
$’000
Total
$’000
Total
equity
$’000
Notes
385,955
7,809
103,515
497,279
–
–
–
–
–
–
–
–
–
2,915
2,915
44,792
–
44,792
44,792
2,915
47,707
(7,988)
(1,217)
(2,201)
2,099
–
–
–
–
(7,988)
(1,217)
(2,201)
2,099
–
(22,049)
(22,049)
4,236
501,515
(532)
44,260
–
(532)
2,915
47,175
7,988
–
–
–
–
–
(1,217)
(2,201)
2,099
(22,049)
385,955
1,417
126,258
513,630
11,692
525,322
385,955
1,417
126,258
513,630
11,692
525,322
49,112
–
49,112
1,587
49,112
50,699
(472)
48,640
–
1,587
(472)
50,227
–
1,587
1,587
(1,883)
2,276
–
–
–
–
–
–
–
–
(1,883)
2,276
–
(24,499)
(24,499)
–
–
–
(1,883)
2,276
(24,499)
385,955
3,397
150,871
540,223
11,220
551,443
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
75 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 76
Consolidated Statement of Cash Flows
Notes to the
Consolidated Financial Statements
Notes
2018
$’000
2017
$’000
CONTENTS
BASIS OF REPORTING
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payments for purchase of land
Interest and other finance costs paid
Distributions and dividends received from associates and joint ventures
Interest received
Income tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for investment in associates
Proceeds from capital returns from associates
Loans to related parties
Repayment of loans by related parties
Net cash outflow from investing activities
Cash flows from financing activities
Dividends paid to Group’s shareholders
Repayment of borrowings
Proceeds from borrowings
Proceeds from issue of Peet bonds (gross proceeds net of costs)
Transactions with non-controlling interests (net of costs)
Net cash outflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
19
325,252
(183,177)
(50,690)
(18,983)
10,185
552
(15,806)
67,333
(2,252)
(8,725)
3,249
(21,024)
7,826
(20,926)
(24,499)
(108,129)
25,598
49,005
–
(58,025)
(11,618)
88,367
76,749
334,369
(203,504)
(42,376)
(18,160)
3,949
901
(17,952)
57,227
(4,426)
(3,537)
744
(16,220)
21,951
(1,488)
(22,049)
(67,296)
49,817
–
(1,217)
(40,745)
14,994
73,373
88,367
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
1. Reporting entity .......................................................................................................................................................... 76
2. Basis of preparation .................................................................................................................................................... 76
3. How to read the annual report .................................................................................................................................... 78
PERFORMANCE FOR THE YEAR
4. Segment information .................................................................................................................................................. 79
5. Revenue ...................................................................................................................................................................... 81
6. Expenses .................................................................................................................................................................... 82
7. Earnings per share ...................................................................................................................................................... 82
8. Taxes ........................................................................................................................................................................... 83
OPERATING ASSETS AND LIABILITIES
9.
Inventories .................................................................................................................................................................. 85
10. Investments accounted for using the equity method ................................................................................................ 85
11. Receivables ................................................................................................................................................................. 88
12. Payables ...................................................................................................................................................................... 89
13. Land vendor liabilities ................................................................................................................................................. 89
14. Provisions ................................................................................................................................................................... 89
15. Interests in joint operations ........................................................................................................................................ 90
CAPITAL MANAGEMENT
16. Borrowings and derivative financial instruments ....................................................................................................... 91
17. Contributed equity and reserves ................................................................................................................................ 95
18. Dividends .................................................................................................................................................................... 96
19. Reconciliation of profit after income tax to net cash inflow from operating activities ............................................... 97
20. Fair value measurement ............................................................................................................................................. 97
OTHER NOTES
21. Remuneration of auditors ........................................................................................................................................... 98
22. Contingencies and commitments .............................................................................................................................. 98
23. Parent entity financial information and subsidiaries ................................................................................................... 99
24. Share-based payments ............................................................................................................................................. 102
25. Matters subsequent to the end of the financial year ............................................................................................... 104
26. Other accounting policies ......................................................................................................................................... 104
77 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 78
Basis of Reporting
This section of the financial report sets out the basis of
a. Principles of consolidation
preparation of the consolidated financial statements.
Where an accounting policy is specific to one note, the
policy is described in the note to which it relates.
1. Reporting entity
This financial report covers the consolidated financial
statements for the Consolidated Entity consisting of Peet
Limited and its subsidiaries (Group). The Financial Report is
presented in the Australian currency. Peet Limited is a
The consolidated financial statements comprise the
financial statements of the Group and the entities it
controlled at the end of, or during the year ended 30 June
2018. The Group controls an investee if and only if the
Group has:
• power over the investee (i.e. existing rights that give it
the current ability to direct the relevant activities of the
investee);
company limited by shares, incorporated and domiciled in
• exposure, or rights, to variable returns from
its
Australia. Its registered office and principal place of
involvement with the investee; and
business is; Level 7, 200 St Georges Terrace, Perth WA
6000. The nature of the operations and principal activities
of the Group are described in the Directors’ Report. Peet
• the ability to use its power over the investee to affect
its returns.
Limited is a for-profit entity.
The Group re-assesses whether or not it controls an
2. Basis of preparation
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.
The Financial Report is a general purpose financial report
Consolidation of a subsidiary begins when the Group
which:
• has been prepared in accordance with Australian
Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board and the
Corporations Act 2001;
obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the statement of
comprehensive income from the date the Group gains
control until the date the Group ceases to control the
• complies with
International Financial Reporting
subsidiary.
Standards
(IFRS) as
issued by
the
International
Accounting Standards Board (IASB);
Profit or loss and each component of other comprehensive
income (OCI) are attributed to the equity holders of the
2. Basis of preparation (continued)
b. Associates
To the extent the joint arrangement provides the Group
with rights to the individual assets and obligations arising
from the joint arrangement, the arrangement is classified
Associates are all entities over which the Group has
as a joint operation and as such, the Group recognises its:
significant
influence
but
not
control,
generally
accompanying a shareholding of between 20% and 50%
• assets, including its share of any assets held jointly;
of the voting rights. In the case of syndicates, significant
• liabilities, including its share of any liabilities incurred
influence can exist with a lower shareholding by virtue of
jointly;
the Group’s position as project manager. Investments in
associates are accounted for using the equity method of
accounting, after initially being recognised at cost.
The Group’s share of its associates’ post-acquisition profits
or losses are recognised in the consolidated statement of
• share of revenue from the sale of the output by the joint
operation; and
• expenses, including its share of any expenses incurred
jointly.
profit or loss, and its share of post-acquisition other
To the extent the joint arrangement provides the Group
comprehensive
income
is
recognised
in
other
with rights to the net assets of the arrangement, the
comprehensive income. The cumulative post-acquisition
investment is classified as a joint venture and accounted
movements are adjusted against the carrying amount
for using the equity method. Under the equity method,
of the investment. Dividends receivable from associates
the cost of the investment is adjusted by the post-
are recognised as a reduction in the carrying amount of
acquisition changes in the Group’s share of the net assets
the investment.
of the venture.
When the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any other
d. Changes in ownership interests
unsecured long-term receivables, the Group does not
The Group
treats
transactions with non-controlling
recognise further losses, unless it has incurred obligations
interests that do not result in a gain or loss of control as
or made payments on behalf of the associate.
transactions with equity owners of the Group. A change in
Unrealised gains on transactions between the Group and
its associates are eliminated to the extent of the Group’s
interest in the associates. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
c. Investments in joint arrangements
ownership interest results in an adjustment between the
carrying amounts of the controlling and non-controlling
interests to reflect their relative interests in the subsidiary.
Any difference between the amount of the adjustment to
non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity
attributable to owners of Peet Limited.
• has been prepared under the historical cost convention,
parent of the Group and to the non-controlling interests,
Joint arrangements are arrangements of which two or
e. Changes in accounting policies
except for derivative instruments which have been
even if this results in the non-controlling interests having a
measured at fair value;
deficit balance. All intra-group assets and liabilities, equity,
• provides comparative information in respect of the
previous period; and
• is rounded off to the nearest thousand dollars or in
certain cases to the nearest dollar in accordance with
ASIC Corporations Instrument 2016/191.
income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation.
more parties have joint control. Joint control is the
contractual agreed sharing of control of the arrangement
which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing
control. Joint arrangements are classified as either a joint
operation or joint venture, based on the rights and
obligations arising
from
the contractual obligations
between the parties to the arrangement.
The Group has adopted all new and amended Australian
Accounting Standards and Interpretations effective from 1
July 2017. New and amended Standards and Interpretations
did not result in any significant changes to the Group’s
accounting policies. The Group has not elected to early
adopt any other new or amended Standards or
Interpretations that are issued but not yet effective (refer
note 26 ix).
79 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 80
3. How to read the annual report
The notes to the financial statements are set out in four
specific sections:
• Performance for the year;
• Operating assets and liabilities;
• Capital management; and
• Other notes.
Where an accounting policy is specific to one note, the
policy is described in the note to which it relates.
Key estimates are described in the following notes:
• Note 5 – sales fall over rates on project management and
selling fees;
• Note 8 – deferred tax assets; and
• Note 9 – net realisable value.
Financial instrument risk management is carried out by
management under policies approved by the Board of
Directors and the Audit and Risk Management Committee.
Management identifies, evaluates and mitigates financial
risks in close co-operation with the Group’s operating units.
The Board and Audit and Risk Management Committee
provide written principles for overall risk management, as
well as written policies covering specific areas, such as
mitigating interest rate and credit risks, use of derivative
financial instruments and investing excess liquidity.
Financial risks and its management are detailed in the
respective notes it pertains to. The Group’s activities
expose it to financial risks including:
• credit risk (note 11 and 16);
• liquidity risk (note 16); and
• interest rate risk (note 16).
Related party transactions are disclosed within the notes
they relate to. Transactions which occur between the
Group and significant controlled entities are classified as
related party transactions. Significant controlled entities
are interests held in associates and joint ventures, which
are set out in note 10. Details relating to the key
management personnel, including remuneration paid, are
set out in note 6.
Performance for the year
This section focuses on the results and performance of
Company-owned projects
the Group.
4. Segment information
The Group acquires parcels of land in Australia, primarily
for
residential development purposes. Certain
land
holdings will also produce non-residential blocks of land.
Operating segments are reported in a manner that is
consistent with the internal reporting provided to the chief
Joint arrangements
operating decision maker. The chief operating decision
maker, who is responsible for allocating resources and
assessing performance of the operating segments, has
been identified as the executive management group.
Joint arrangements are entered into with government,
statutory authorities and private landowners. The form of
these arrangements can vary from project to project but
generally involves Peet undertaking the development of
The executive management group assesses
the
land on behalf of the landowner or in conjunction with the
performance of the operating segments based on multiple
co-owner. The Group is typically entitled to ongoing fees
measures including earnings before interest (including
for management of the development project and also a
interest and finance charges amortised through cost of
share of the profits.
sales), tax, depreciation and amortisation (“EBITDA”),
earnings before interest (including interest and finance
Inter-segment transfers and other unallocated
charges amortised through cost of sales) and tax (“EBIT”)
and profit after tax.
Segment revenue, expenses and results include transfers
between segments. Such transfers are based on an arm’s
The share of profits from associates and joint ventures is
length basis and are eliminated on consolidation.
included as segment revenue as it is treated as revenue for
internal reporting purposes.
The adoption of AASB 10 Consolidated Financial
Statements from 1 July 2013, resulted in certain property
The Group operates only in Australia.
syndicates being consolidated. These entities however,
The executive management group considers the business
to have the following reportable business segments:
Funds management
continue to be managed and reported to the executive
management group as part of the funds management
business segment. Adjustments are
included
in
“Inter-segment transfers and other unallocated” to
reconcile reportable business segment information to the
Peet enters into asset and funds management agreements
Group’s consolidated statement of profit or loss.
with external capital providers. Peet and/or the external
capital provider commit equity
funds
towards
the
acquisition of land and this is generally supplemented with
debt funds either at the time of acquisition or during the
.
development phase of a project.
The Group derives fees from underwriting, capital raising
and asset identification services. Ongoing project related
fees (mainly project management and selling fees as well
as performance fees) are then derived by the Group for the
duration of a particular project.
.
81 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 82
4. Segment information (continued)
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5. Revenue
Revenue from sales of land
Project management, selling and
performance fees
Other revenue
2018
$’000
2017
$’000
240,360
235,187
43,647
56,574
3,612
4,282
287,619
296,043
KEY ESTIMATES
SALES FALL OVER RATES ON PROJECT
MANAGEMENT AND SELLING FEES
An analysis of sales fallen over is performed on a
monthly basis for all business segments by
location. This analysis is used to determine an
appropriate allowance for sales fall overs to be
recognised against project management and
Recognition and measurement
selling fees.
Revenue is recognised at the fair value of consideration
received or receivable. The main streams of revenue are
Revenue from related parties included above:
recognised if it meets the criteria outlined below.
SALE OF LAND
Revenue from the sale of lots from completed stages of
land subdivision are recognised on settlement of the sale.
This represents the point when risks and rewards have
passed to the buyer.
Revenue from related parties 1
Associates
Project management, selling and
performance fees
2018
$’000
2017
$’000
31,597
42,658
Syndicate administration fees
1,336
1,368
PROJECT MANAGEMENT AND SELLING FEES
Interest
Other
Project management and selling fees are recognised where
Joint arrangements
there is a signed sales contract with a buyer as this is the
point at which revenue has been earned by the project
Project management, selling and
performance fees
manager, adjusted for estimates of sales fall over rates.
420
–
825
667
5,158
5,682
38,511
51,200
PERFORMANCE FEES
1. Refer to note 3 for information on related party transactions.
Performance fee revenue is based on a profitability
measurement in accordance with the relevant development
management agreement.
OTHER REVENUE
Other revenue includes:
• interest – this is recognised when earned, which is
determined using the effective interest rate method.
• dividends – this is recognised when the Group’s right to
receive payment is established.
• other trading activities – this is recognised as the service
required under the contract is performed.
83 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 84
6. Expenses
Land and development costs
2018
$’000
2017
$’000
Land and development costs represent the portion of the
land and development costs associated with the lots sold
Profit before income tax includes the
following specific expenses:
during the year.
Land and development cost
128,617
148,665
Borrowing costs
Amortised interest and finance expense
19,685
16,832
Total land and development cost
148,302
165,497
Depreciation
Amortisation
Total depreciation and amortisation 1
Employee benefits expense 2
Project management, selling and other
operating costs
Other expenses
Total other expenses
Total expenses
2,604
1,164
3,768
34,166
18,923
18,697
71,786
2,722
817
3,539
33,736
19,602
18,235
71,573
223,856
240,609
Finance costs
Interest and finance charges paid/payable
Interest on corporate bonds
Amount capitalised
10,364
11,275
12,703
7,863
(11,407)
(12,229)
10,232
8,337
1. Refer to note 26 (ii) and (iii) for accounting policies.
2. Refer to note 26 (iv) and (v) for accounting policies.
Related party expenses
KMP remuneration 1
Short-term employee benefits
Post-employment benefits
Share-based payments
1. Refer to note 3 for information about related party transactions.
2018
$’000
2017
$’000
4,366
150
1,686
6,202
4,284
191
1,505
5,980
Borrowing costs incurred for the construction of any
qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended
use or sale. Other borrowing costs are expensed in the
period they are incurred. The capitalisation rate used to
determine the amount of finance costs to be capitalised is
the weighted average interest rate applicable to the Group’s
outstanding borrowings during the year (refer note 16).
7. Earnings per share
Profit attributable to the ordinary
equity holders of the Company
($’000)
Weighted average number
of ordinary shares used as
the denominator in calculating
basic earnings per share
Basic and diluted earnings per
share (cents)
2018
49,112
2017
44,792
489,980,559
489,980,559
10.02
9.14
There are 1,200,000 options excluded from the calculation
of diluted earnings per share as they are anti-dilutive. They
could potentially dilute basic earnings per share in the future.
Refer note 24 for the number of Performance Rights (PRs)
outstanding at 30 June 2018. These PRs are contingently
issuable shares and accordingly not included in diluted
earnings per share.
8. Taxes
a. Income tax expense
Major components of tax expense
Current income tax expense
Current tax
Adjustments for prior periods
Deferred income tax expense
Deferred tax
Adjustments for prior periods
Deferred income tax expense included
in income tax expense comprises:
(Increase)/ decrease in deferred
tax assets
(Decrease)/ increase in deferred tax
liabilities
2018
$’000
2017
$’000
27,144
(638)
26,506
(7,534)
–
(7,534)
18,972
12,297
703
13,000
5,866
(703)
5,163
18,163
DEFERRED TAXES
Deferred tax assets and liabilities are recognised for
temporary differences at the tax rates expected to apply,
when the assets are recovered or liabilities are settled,
based on those tax rates which are enacted or substantively
enacted for each jurisdiction by the end of the reporting
period. The relevant tax rates are applied to the amounts of
deductible and taxable temporary differences to measure
the deferred tax asset or liability. An exception is made for
certain temporary differences arising from the initial
recognition of an asset or a liability. No deferred tax asset
or liability is recognised in relation to these temporary
differences if they arise in a transaction other than a
business combination that at the time of the transaction did
not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only if it is
(2,747)
4,241
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
(4,787)
922
Deferred tax assets and liabilities are offset when there is
(7,534)
5,163
a legally enforceable right to offset current tax assets and
Tax reconciliation
Profit before income tax
Tax at Australian tax rate of 30%
67,612
20,284
62,423
18,727
Tax effect of amounts which are not
assessable or deductible:
Share of net profit of associates
Employee benefits
Franking credits
Sundry items
(913)
118
(806)
289
(218)
630
(1,184)
208
liabilities and when the deferred tax balances relate to the
same taxation authority.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
KEY ESTIMATES
18,972
18,163
DEFERRED TAX ASSETS
The Group has recognised deferred tax assets
relating to carried forward tax losses to the extent
there are sufficient taxable temporary differences
(deferred tax liabilities) relating to the same taxation
authority against which the unused tax losses can
be utilised. However, utilisation of the tax losses
also depends on the ability of the entity, to satisfy
certain tests at the time the losses are recouped.
Recognition and measurement
CURRENT TAXES
The income tax expense for the period is the tax payable
on the current period’s taxable income based on the
applicable income tax rate, adjusted by changes in deferred
tax assets and
liabilities attributable
to
temporary
differences between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
85 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 86
8. Taxes (continued)
b. Deferred tax assets
Movements
At 1 July 2016
Credited/(charged):
- to profit or loss
- to other comprehensive income
Total deferred tax assets
Set off against deferred tax liabilities pursuant
to set off provisions
At 30 June 2017
At 1 July 2017
Credited/(charged):
– to profit or loss
– to other comprehensive income
Total deferred tax assets
Set off against deferred tax liabilities pursuant
to set off provisions
At 30 June 2018
c. Deferred tax liabilities
Movements
At 1 July 2016
Charged/(credited):
– to profit or loss
Total deferred tax liabilities
Set off against deferred tax assets pursuant
to set off provisions
At 30 June 2017
At 1 July 2017
Charged/(credited):
– to profit or loss
Total deferred tax liabilities
Set off against deferred tax assets pursuant to
set off provisions
At 30 June 2018
Inventory
$’000
Cash flow
hedges
$’000
Capital
raising costs
$’000
Tax losses
$’000
3,272
2,432
690
5,652
80
–
3,352
–
(1,249)
1,183
(484)
–
206
(2,960)
–
2,692
Other
$’000
4,202
(877)
–
3,325
Total
$’000
16,248
(4,241)
(1,249)
10,758
(10,758)
–
3,352
1,183
206
2,692
3,325
10,758
195
–
3,547
–
(680)
503
(100)
–
106
(465)
–
2,227
3,117
–
6,442
2,747
(680)
12,825
(12,825)
–
Interest and
finance
charges
$’000
Accrued
income
$’000
Inventory
$’000
Share of joint
arrangements
deferred tax
liabilities
$’000
Other
$’000
Total
$’000
29,590
8,072
9,029
2,688
155
49,534
(1,043)
28,547
(1,554)
6,518
2,983
12,012
536
3,224
–
155
922
50,456
(10,758)
39,698
28,547
6,518
12,012
3,224
155
50,456
(2,935)
25,612
932
7,450
(2,675)
9,337
(109)
3,115
–
155
(4,787)
45,669
(12,825)
32,844
Operating assets and liabilities
This section shows the assets used to generate the Group’s
trading performance and the liabilities incurred as a result.
Liabilities relating to the Group’s financing activities are
KEY ESTIMATES
addressed in the capital management section.
NET REALISABLE VALUE
9. Inventories
Current
Cost of acquisition
Capitalised development costs
Capitalised finance costs
Non-current
Cost of acquisition
Capitalised development costs
Capitalised finance costs
Total inventory at cost
2018
$’000
2017
$’000
28,659
76,965
13,635
36,400
70,140
26,697
119,259
133,237
230,980
82,329
62,231
375,540
494,799
213,318
81,031
58,570
352,919
486,156
Recognition and measurement
Land held for development and resale is stated at the lower
of cost and net realisable value. Cost includes the cost of
acquisition, development and borrowing costs during
development. When development is completed, borrowing
costs and other holding charges are expensed as incurred.
Land is initially classified as non-current. It is subsequently
reclassified to current if the development/subdivided lots
are expected to be sold within the next 12 months.
The Group is required to carry inventory at lower of
cost and net realisable value. Net realisable value is
the estimated selling price in the ordinary course of
business, less estimated costs of completion and
the estimated costs necessary to make the sale.
Estimates of net realisable value are based on the
most reliable evidence available at the time the
estimates are made, of the amount the inventories
are expected to realise and the estimate of costs to
complete. The key assumptions require the use of
management judgement and are reviewed annually.
10. Investments accounted for using
the equity method
Investments in associates and joint ventures are accounted
for using the equity method of accounting.
a. Movements in carrying amounts of
investments in associates and joint
ventures
2018
$’000
2017
$’000
Carrying amount at 1 July
213,448
198,115
Acquisitions/additional investments
Dividends
Capital returns
Share of profit after income tax
8,725
(10,185)
(3,249)
14,081
4,700
(3,949)
(744)
15,326
Carrying amount at 30 June
222,820
213,448
87 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 88
10. Investments accounted for using the equity method (continued)
10. Investment accounted for using the equity method (continued)
The Group assesses, at each balance date, the carrying value of investments in associates and joint ventures to ensure
the assets are not impaired.
b. Investments in associates and joint ventures (JVs) including summarised financial information
s
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As at 30 June 2018
% $’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Peet Caboolture Syndicate Limited, QLD 20
9,351
48,446
41,882
4,994
10,921
2,184
20,780
7,928
377,199
103,706
20,385
261,036
69,150
5,075
(2,594)
(708)
2,134
43,728
5,934
11,202
28,726
4,929
44,245
6,317
1,634
1,084
327
Associates
Peet Alkimos Pty Limited, WA
Peet Werribee Land Syndicate, VIC
27
17
Joint Ventures*
Peet Flagstone City Pty Limited, QLD
Googong Township Unit Trust, NSW
Peet Golden Bay Pty Limited, WA
Peet Mt Barker Pty Limited, SA
Peet No.1895 Pty Limited, VIC
Peet Brahbam Pty Ltd, WA #
Other associates
Other JVs
Total
As at 30 June 2017
Associates
Peet Alkimos Pty Limited, WA
Peet Werribee Land Syndicate, VIC
50
50
50
50
50
50
26
17
415
1,507
2,599
11,210
151,643
47,194
1,598
114,061
57,031
32,641
2,795
49,216
110,773
41,836
3,319
30,038
5,320
–
–
118,153
59,077
77,349
16,106
28,037
14,019
7,991
2,840
29,495
11,971
354
20,010
10,005
11,138
7,200
107,617
48,868
57,729
8,220
4,110
15,872
3,503
30,419
33,932
–
(10)
(5)
4
(10)
2,066
254
222,820
7,952
379,668
125,351
28,585
233,684
61,155
31,404
(1,345)
1,472
48,243
25,754
56
23,905
77
(1,090)
1,398
8,053
208
754
1,300
(5)
1,917
(247)
14,081
(352)
(187)
4,102
1,857
c. Additional summarised information in relation to amounts included in assets, liabilities
and profit/(loss) of joint ventures
As at 30 June 2018
Peet Flagstone City Pty Limited
Googong Township Unit Trust
Peet Golden Bay Pty Limited
Peet Mt Barker Pty Limited
Peet No. 1895 Pty Limited
Peet Brahbam Pty Limited#
As at 30 June 2017
Peet Flagstone City Pty Limited
Googong Township Unit Trust
Peet Golden Bay Pty Limited
Peet Mt Barker Pty Limited
Peet No. 1895 Pty Limited
1. Excluding trade and other payables and provisions
# New joint venture in FY18
Cash and cash
equivalents
$’000
Current
financial
liabilities 1
$’000
Non-current
financial
liabilities 1
$’000
Interest
expense
$’000
Income tax
expense/
(benefit)
$’000
10,756
3,092
3,475
2,949
8,177
502
13,042
3,151
5,822
5,434
14,022
–
33,445
–
7,000
–
–
–
39,463
–
5,000
–
39,110
–
–
–
77,747
33,784
36,021
–
–
–
38,923
–
–
–
–
2
–
–
103
–
–
101
1,283
35
175
647
1,203
–
1,014
(14)
1,043
14
1,409
Peet Caboolture Syndicate Limited, QLD 20
10,996
49,595
46,231
5,076
9,284
19,182
(1,582)
(316)
Joint Ventures*
Peet Flagstone City Pty Limited, QLD
Googong Township Unit Trust, NSW
Peet Golden Bay Pty Limited, WA
Peet Mt Barker Pty Limited, SA
Peet No.1895 Pty Limited, VIC #
50
50
50
50
50
Other associates
Other JVs
Total
17,785
134,617
40,203
936
111,263
55,632
21,594
2,355
1,178
52,761
117,297
53,061
32,333
5,500
–
–
116,997
58,499
90,263
21,166
10,583
31,621
15,811
13,757
2,434
1,217
28,714
10,539
282
22,912
11,456
12,548
23
12
4,788
5,019
13,989
81,565
49,715
40,219
5,620
2,810
1,874
252
213,448
61,327
6,118
3,059
22
110
15,326
* Refer to note 10(c) for further breakdown of financial information of joint ventures
# New joint venture in FY18
The associates and joint ventures finance their operations through unitholder/shareholder contributions and also through
external banking facilities. The Group also provides a loan facility to some of these entities which is disclosed in note 11.
The Group has no further contractual obligations to provide ongoing financial support.
89 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 90
11. Receivables
Current
Trade receivables 1
Accrued income 2
Loans to associates and joint ventures 3
Other receivables
Non-current
Loans to associates and joint ventures 3
Other receivables 4
Recognition and measurement
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except
for those with maturities greater than 12 months after the
balance date which are classified as non-current assets.
Trade receivables generally mentioned in (1) are recognised
initially at fair value and subsequently at amortised cost
using the effective interest rate method, less allowance for
impairment. Other receivables are recognised on an accrual
basis as the services to which they relate are performed.
2018
$’000
2017
$’000
9,517
16,622
–
1,253
27,392
86,996
8,669
95,665
20,130
25,005
6,609
1,575
53,319
66,787
11,215
78,002
Total receivables
123,057
131,321
Refer note 20 for fair value disclosures.
1. Trade receivables are non-interest bearing and generally have 30-60 day terms. There were no
impaired trade receivables at the end of the year for the Group (2017: $Nil).
2. These amounts represent project management and performance fees from associates and other
Credit risk
managed entities.
3. The Group has entered into financing arrangements (including loans and equity contributions in cash)
with certain associates and JVs of the Group on commercial terms. The loans provided to associates
and JVs are unsecured with interest rates based on Bank Bill Swap Bid Rate (BBSY) plus a margin up
to 5%.
Includes deferred facilities fee - Those that purchase homes in the Lattitude Lakelands retirement
village enter into an agreement to pay deferred facilities fees on departure, which is based on 3% of
the market value of the unit for each year of occupation (up to 24%). The deferred facilities fee is
based on independent valuations.
4.
Related party balances with associates and joint ventures
included above:
2018
$’000
2017
$’000
Current
Trade receivables and accrued income
19,020
Loans to associates and joint ventures
–
Non-current
Loans to associates and joint ventures
Other receivables
Total
31,214
6,609
66,787
6,861
86,996
4,418
110,434
111,471
Movements in loans to associates and joint ventures:
Carrying amount at 1 July
Loans advanced to associates
73,396
21,024
63,761
31,220
Loan repayments from associates
(7,826)
(21,951)
Other
Carrying amount at 30 June
402
366
86,996
73,396
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer
contract, leading to a financial loss. The maximum exposure
to credit risk as at 30 June 2018 is the carrying amount of
the financial assets in the consolidated financial statements.
The credit risk arising on trade and other receivables is
monitored on an ongoing basis which results in the
exposure to bad debts for the Group not being significant.
There are no significant financial assets that have had
renegotiated terms that would otherwise have been past
due or impaired.
Based on the credit history of trade and other receivables, it
is expected that these amounts will be received. The Group
does not hold any collateral in relation to these receivables.
There is no significant concentration of credit risk with
respect to receivables as the Group has a large number of
balances with related parties and the remaining with other
parties that have a good credit history with the Group.
The Group manages this risk by:
• transacting with creditworthy counterparties that have
an appropriate credit history;
• providing loans as an investment into joint ventures and
associates where it is comfortable with the underlying
property exposure within that entity;
• performing ongoing checks to ensure that settlement
terms detailed in individual contracts are adhered to;
• regularly monitoring the performance of its associates,
joint ventures and third parties; and
• obtaining collateral as security (where appropriate).
12. Payables
Recognition and measurement
2018
$’000
2017
$’000
Where the Group enters into unconditional contracts with
land vendors to purchase properties for future development
that contain deferred payment terms, these borrowings
are disclosed at their present value. The unwinding of the
discount applied to the acquisition price is included in
finance costs. Generally, the land vendor holds the title
over the property until settlement has occurred.
Refer note 20 for fair value disclosures.
The below table analyses the maturity of the Group’s land
vendor liability obligation:
Current
Trade payables
Unearned revenue
GST payable
Accruals and other payables
392
19,433
5,952
56,289
82,066
6,980
13,797
4,976
43,739
69,492
Recognition and measurement
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year
which are unpaid. These amounts are unsecured and
usually paid within 30 days of recognition.
0 – 1 years
1 – 2 years
Trade and other payables are presented as current liabilities
2 – 5 years
unless payment is not due within 12 months from the
Total contractual cash flows
reporting date. They are recognised initially at their fair
Carrying amount of liabilities
value and subsequently measured at amortised cost using
the effective interest method.
14. Provisions
In some joint arrangement contracts, costs are reimbursed
as incurred during development. As revenue is only
recognised on settlements, reimbursements received are
recognised as unearned revenue until settlement. Although
unearned revenue is classified as a liability in the
Current
Rebates
consolidated balance sheet, on settlement it will be
recognised in the consolidated statement of profit or loss
and not be repaid in cash.
Refer note 20 for fair value disclosures.
13. Land vendor liabilities
Employee entitlements
Non-current
Employee entitlements
Total provisions
2018
$’000
2017
$’000
14,700
6,350
–
21,050
20,080
15,975
14,700
6,350
37,025
33,828
2018
$’000
2017
$’000
2,778
3,048
5,826
285
285
6,111
3,138
3,107
6,245
199
199
6,444
Movements in the provision for rebates during the financial
2018
$’000
2017
$’000
year are set out below:
Current
Instalments for purchase of
development property
Non-current
Instalments for purchase of
development property
Future interest component of
deferred payments
Total land vendor liabilities
14,700
15,975
14,700
15,975
6,350
21,050
(970)
(3,197)
5,380
20,080
17,853
33,828
Carrying amount at 1 July
Charged/(credited) to the statement
of profit or loss:
– Additional provision recognised
– Paid during year
Carrying amount at 30 June
2018
$’000
3,138
2017
$’000
5,154
2,079
(2,439)
2,778
1,450
(3,466)
3,138
91 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 92
14. Provisions (continued)
15. Interests in joint operations
Recognition and measurement
Details of aggregate share of assets, liabilities, revenue,
expenses and results of joint operations.
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events; it
Group’s share of:
Total
assets
$’000
Total
liabilities
$’000
Revenue
$’000
Expenses
$’000
18,739
4,159
12,261
8,085
16,078
13,184
9,758
8,649
9,600
6,738
4,231
3,604
23,511
5,731
10,026
8,684
29,608
7,411
17,424
12,080
4,997
2,340
13,465
10,567
10,393
6,561
4,083
3,601
21,903
5,446
2,599
2,642
As at 30 June 2018
The Village at
Wellard, WA
Lightsview Joint
Venture, SA
The Heights
Durack, NT
Redbank Plains
Joint Venture,
QLD
As at 30 June 2017
The Village at
Wellard, WA
Lightsview Joint
Venture, SA
The Heights
Durack, NT
Redbank Plains
Joint Venture,
QLD
is probable that an outflow of resources will be required to
settle the obligation; and the amount has been reliably
estimated. Provisions are not recognised for future
operating losses.
Provisions are measured at
the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the balance date. The
discount rate used to determine the present value reflects
current market assessments of the time value of money
and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as
interest expense.
Rebates
The Group may be required under the terms of certain sale
contracts to provide rebates for expenditures undertaken
by land holders in respect of developments. These
expenditures relate to landscaping and fencing and are
generally payable where the land purchaser completes the
construction of their dwelling within a specified period of
time. This period is generally 12 to 18 months from the
date of settlement. A liability is recorded at settlement and
a related adjustment to profit or loss is recorded upon the
expiration of the time limit if the rebate has not been paid.
Employee entitlements
The liability for long service leave and annual leave is
recognised in the provision for employee benefits and
measured as the present value of expected future payments
to be made in respect of services provided by employees up
to the balance date. Consideration is given to expected
future wage and salary levels, experience of the employee,
departures and periods of service. Expected future
payments are discounted using market yields at the
reporting date on high quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Liabilities for wages and salaries, including non-monetary
benefits and accumulating sick leave expected to be settled
within 12 months of the balance date are measured at the
amounts expected to be paid when the liabilities are settled.
Capital management
This section outlines how the Group manages its capital
Recognition and measurement
and related financing costs.
Borrowings are initially recognised at fair value, net of
For the purpose of the Group’s capital management,
transaction costs incurred. Borrowings are subsequently
capital includes:
• issued capital;
• debt facilities; and
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the statement of profit or loss
over the period of the borrowings using the effective
• other equity reserves attributable to the equity holders
interest method.
of the parent.
For the purpose of presentation in the statement of cash
The Group’s objectives when managing capital are to:
flows, cash and cash equivalents includes cash on hand,
• safeguard its ability to continue as a going concern;
• continue to provide returns to shareholders and benefits
for other stakeholders;
deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of
three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant
• maintain an efficient capital structure to reduce the cost
risk of changes in value, and bank overdrafts. Bank
of capital; and
overdrafts are shown within borrowings in current liabilities
• ensure all covenants are complied with.
on the balance sheet.
In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing
ratio. This ratio is calculated as total interest-bearing
liabilities (including deferred payment obligations) less
cash, divided by total assets adjusted for market value, net
Refer note 20 for fair value disclosures.
Debt facilities
The following provides details of the loans and borrowings
utilised as at 30 June 2018:
Facility
amount
$’000
Carrying
amount 1
$’000
Effective
interest
rate %
of cash and cash equivalents less intangible assets. The
Bank loans – note a
178,000
69,456
6.1
market value is based on the latest independent mortgage
valuations, adjusted for settlements, development costs
and titled stock between the date of valuation and 30 June
2018. At 30 June 2018, the bank covenant gearing ratio
was 18.2% (2017: 21.4%).
16. Borrowings and derivative
financial instruments
Net debt
Face
value
$’000
Carrying
amount 2
$’000
Effective
interest
rate %
100,000
50,000
98,577
49,171
150,000
147,748
8.06
6.82
Peet bonds – note b
Series 1, Tranche 1
Series 2, Tranche 1
Total
1. Excludes bank guarantees. Refer note 22 for bank guarantees information.
2. Net of transaction and finance costs.
Borrowings – Current
Borrowings – Non-current
Total borrowings*
Cash and cash equivalents
Net debt
2018
$’000
–
2017
$’000
5,791
217,204
244,017
217,204
249,808
(76,749)
(88,367)
140,455
161,441
*Excludes vendor financing. Refer note 13 for vendor financing on deferred payment terms.
93 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 94
The bonds are presented in the balance sheet as follows:
Face value of bonds issued
150,000
100,000
2018
$’000
2017
$’000
Transaction costs
Cumulative interest expense 1
Cumulative coupon payable
(3,245)
146,755
19,602
(18,609)
993
(2,288)
97,712
8,316
(7,934)
382
Non-current liability
147,748
98,094
1.
Interest expense is calculated by applying the effective interest rate of 8.06% (Series 1) and 6.82%
(Series 2) (2017: 8.06%) to the liability component.
The bonds are repayable as follows:
0 – 1 years
1 – 2 years
2 – 5 years
Total contractual cash flows
Carrying amount of liabilities
2018
$’000
10,680
10,689
2017
$’000
7,500
7,500
164,438
114,733
185,807
129,733
147,748
98,094
c. DERIVATIVE FINANCIAL INSTRUMENTS
Non-current
Interest rate swap contracts
– cash flow hedges
2018
$’000
2017
$’000
3,777
4,551
16. Borrowings and derivative
financial instruments (continued)
2.83% and 3.11%) and the variable rates are between 1.59%
and 1.90% (2017: 1.67% and 1.87%).
Interest rate swap contracts – cash flow hedges
The contracts require settlement of net interest receivable or
payable monthly. The settlement dates coincide with the
Recognition and measurement
dates on which interest is payable on the underlying debt.
Derivatives are initially recognised at fair value on the date a
The notional principal amounts and periods of expiry of the
derivative contract is entered into and are subsequently
interest rate swap contracts were as follows:
measured at fair value at each reporting period. The
accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged. The Group
designates certain derivatives as hedges of the cash flows of
recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
1 – 2 years
2 – 5 years
2018
$’000
25,000
2017
$’000
–
100,000
125,000
125,000
125,000
The Group documents at the inception of the hedging
a non-current asset or liability when the remaining
transaction the relationship between hedging instruments
maturity of the hedged item is more than 12 months,
The full fair value of a hedging derivative is classified as
and hedged items, as well as its risk management objective
otherwise current.
and strategy for undertaking various hedge transactions. The
Group also documents its assessment, both at hedge
Liquidity risk
inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions have been and will
continue to be highly effective in offsetting changes in fair
Liquidity risk includes the risk that the Group, as a result of
their operations:
values or cash flows of hedged items.
• will not have sufficient funds to settle a transaction on
The gain or loss from remeasuring the hedging instruments at
due date;
fair value is recognised in other comprehensive income and
• will be forced to sell financial assets at a value which is
deferred in equity in the hedge reserve, to the extent that the
less than what they are worth; or
Total derivative financial instruments
3,777
4,551
hedge is effective. It is reclassified into profit or loss when the
• may be unable to settle or recover a financial asset at all.
16. Borrowings and derivative
financial instruments (continued)
a. BANK LOANS
The bank facilities are secured by a first registered fixed
and floating charge over the assets and undertakings of the
Group with a carrying amount of $700 million (2017: $714
million). Under these facilities the Group is required to
meet bank covenants relating to interest cover, gearing
ratio, real property ratio and minimum shareholders’ equity.
All bank covenants have been met during the reporting
period and as at 30 June 2018.
The Group’s main bank facility of $150 million was extended
to 1 October 2019. The table below analyses the maturity
of the Group’s bank loans based on the remaining period at
reporting date to the contractual maturity date:
2018
$’000
4,229
55,035
16,371
75,635
69,456
2017
$’000
14,546
29,449
126,922
170,917
151,714
0 – 1 years
1 – 2 years
2 – 5 years
Total contractual cash flows
Carrying amount of liabilities
b. PEET BONDS
SERIES 1, TRANCHE 1
Peet Limited issued 1,000,000 Peet bonds with a face
value of $100 per bond on 7 June 2016. The bonds are
unsecured and interest-bearing at a fixed rate of interest of
7.5%, payable semi-annually in arrears and have a maturity
date of 7 June 2021.
SERIES 2, TRANCHE 1
The below table analyses the maturity of the Group’s
interest rate swaps on a net settled basis:
On 5 July 2017, Peet issued 500,000 Bonds at a face value
of $100 per bond with a maturity date of 5 October 2022.
1 – 2 years
2 – 5 years
These bonds are unsecured and carry a floating interest
Total contractual cash flows
rate of BBSW+ 4.65% margin.
Carrying amount of liabilities
2018
$’000
335
3,442
3,777
3,777
2017
$’000
–
4,551
4,551
4,551
hedged interest expense is recognised. The ineffective portion
is recognised in the statement of profit or loss immediately.
Prudent liquidity risk management implies maintaining
sufficient cash, the availability of funding through an
When a hedging instrument expires or is sold or terminated,
adequate amount of committed credit facilities to meet
or when a hedge no longer meets the criteria for hedge
obligations when due, and the ability to close-out market
accounting, any cumulative gain or loss existing in equity at
positions. Due to the dynamic nature of the underlying
that time remains in equity and is recognised when the
business, the Group aims at maintaining flexibility in
forecast transaction is ultimately recognised in the statement
funding by keeping committed credit lines available, and
of profit or loss. When a forecast transaction is no longer
regularly updating and reviewing its cash flow forecasts to
expected to occur, the cumulative gain or loss that was
assist in managing its liquidity. The maturity analysis of the
reported in equity is immediately reclassified to the statement
Group’s derivative and non-derivative financial instruments
of profit or loss.
can be located in their respective notes.
Bank loans of the Group currently bear a weighted average
The Group has unused borrowing facilities which can
variable interest rate for the year before hedges of 1.83%
further reduce liquidity risk.
(2017: 1.75%). It is the Group’s policy to protect part of the
loans from exposure to increasing interest rates. Accordingly,
the Group has entered into interest rate swap contracts under
which it is obliged to receive interest at variable rates and to
pay interest at fixed rates.
Swaps currently cover approximately 83.7% (2017: 82.4%) of
the variable debt principal outstanding and are timed to expire
as each loan repayment falls due. During the year fixed
interest rate swaps range between 2.83% and 3.11% (2017:
95 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 96
16. Borrowings and derivative
financial instruments (continued)
At 30 June 2018, the Group had the following mix of financial
assets and liabilities exposed to variable interest rates:
Credit risk
2018
$’000
2017
$’000
The cash component of financial assets is considered
Financial assets
to have low credit risk as the counterparties are banks
Cash and cash equivalents (floating)
76,749
88,367
with high credit ratings assigned by international credit-
Financial liabilities
Borrowings (floating, unhedged)
(19,456)
(26,714)
Interest rate swap
Net movement
(3,777)
53,516
(4,551)
57,102
The potential impact of a change in interest rates by +/-50
basis points on profit and equity has been tabulated below:
Post-tax profits
Increase/
(decrease)
Equity
Increase/
(decrease)
2018
$’000
2017
$’000
2018
$’000
2017
$’000
– 50 basis points
+ 50 basis points
(195)
195
(216)
216
(195)
195
(200)
200
rating agencies.
Interest rate risk
The Group’s main interest rate risk arises from cash and
long-term borrowings.
Borrowings issued at variable rates expose the Group to
cash flow interest rate risk.
The Group manages its cash flow interest rate risk by using
floating-to-fixed interest rate swaps. Such interest rate
swaps have the economic effect of converting borrowings
from floating rates to fixed rates. Generally, the Group
raises long-term borrowings at floating rates and swaps
them into fixed rates that are lower than those available if
the Group borrowed at fixed rates directly.
Under the interest rate swaps, the Group agrees with other
parties to exchange, at specified intervals (mainly monthly),
the difference between fixed contract rates and floating
rate interest amounts calculated by reference to the agreed
notional principal amounts.
The Group’s fixed rate borrowings and receivables are
carried at amortised cost. They are therefore not subject to
interest rate risk as defined
in AASB 7, Financial
Investments: Disclosures.
Interest rate sensitivity
The sensitivity analysis below has been determined based
on the exposure to interest rates in existence at balance
date, and the stipulated change taking place at the
beginning of the financial year and held constant throughout
the reporting period. A 50 basis point increase or decrease
used in the interest rate sensitivity analysis was determined
based on the level of debt that was renewed and
forecasters’ economic expectations and
represents
management’s assessment of the possible change in
interest rates.
17. Contributed equity and reserves
a. Movements in ordinary share capital
Date
Details
30 June 2016
Closing balance
30 June 2017
Closing balance
Movement for the year
Movement for the year
30 June 2018
Closing balance
The nature of the Group’s contributed equity
Number of
shares
489,980,559
–
$’000
385,955
–
489,980,559
385,955
–
–
489,980,559
385,955
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares of options and/
or performance rights are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares, options and/or performance rights for the acquisition of a business are not
included in the cost of the acquisition as part of the purchase consideration. Ordinary shares entitle the holder to participate
in dividends and the proceeds on winding up of the parent entity in proportion to the number of and amounts paid on the
shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to
one vote, and upon a poll each share held is entitled to one vote.
17. Contributed equity and reserves (continued)
b. Reserves
Cash flow
hedge
reserve 1
$’000
Share-based
payments
reserve 2
$’000
Non-
controlling
interest
reserve 3
$’000
13,402
101
At 1 July 2016
Cash flow hedges (gross)
Deferred tax
Share based payment
Vesting of performance rights4
Non-reciprocal contribution to a controlled entity
Capital return to non-controlling interests
(5,694)
4,164
(1,249)
–
–
–
–
–
–
2,099
(2,201)
–
–
At 30 June 2017
(2,779)
13,300
–
–
–
–
(7,988)
(1,217)
(9,104)
At 1 July 2017
Cash flow hedges (gross)
Deferred tax
Share based payment
Vesting of performance rights5
At 30 June 2017
(2,779)
2,267
(680)
–
–
(1,192)
13,300
(9,104)
–
–
2,276
(1,883)
13,693
–
–
–
–
(9,104)
Total
$’000
7,809
4,164
(1,249)
2,099
(2,201)
(7,988)
(1,217)
1,417
1,417
2,267
(680)
2,276
(1,883)
3,397
1. The cash flow hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that is recognised directly in equity. Amounts are recognised in profit or loss when the associated hedged
transaction affects profit or loss.
2. The share-based payments reserve is used to recognise the fair value of options and performance rights granted.
3. The non-controlling interest reserve is used to record the differences described in note 2(d) which may arise as a result of transactions with non-controlling interests that do not result in a loss of control.
4.
5.
In September 2016, the Company purchased 2,189,371 shares to settle the vesting of FY14 Performance Rights.
In August 2017, the Company purchased 1,400,275 shares to settle the vesting of FY15 Performance Rights.
97 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 98
18. Dividends
Declared and paid during the period
Prior year fully franked dividend 3.00 cents, paid on 4 October 2017 (2016: 2.75 cents)
Fully franked interim dividend for 2018: 2.00 cents (2017:1.75 cents)
2018
$’000
2017
$’000
14,699
9,800
24,499
13,474
8,575
22,049
Dividend not recognised at year end
Final dividend 3.00 cents per share to be paid on 5 October 2018 (2017: 3.00 cents per share)
14,699
14,699
Franking credit balance
Franking account balance as at the end of the financial year at 30% (2017: 30%)
Franking credits that will arise from the payment of income tax
Impact on the franking account of dividends proposed before the financial report was issued but not
recognised as a distribution to equity holders during the period
35,840
15,398
(6,300)
28,214
4,698
(6,300)
44,938
26,612
19. Reconciliation of profit after
income tax to net cash inflow
from operating activities
Other financial instruments – fair value
disclosures
The carrying value of receivables, payables and borrowings
is considered to approximate their fair values.
The quoted market value (on ASX) as at 30 June 2018 of a
Peet bond Series 1, Tranche 1 was $105 per bond and of a
Peet bond Series 2, Tranche 1 was $102 per bond (Level 1).
KEY ESTIMATES
FAIR VALUE ESTIMATION
2018
$’000
2017
$’000
48,640
44,260
2,604
1,164
395
2,722
817
(102)
(14,081)
(15,326)
(157)
649
(535)
320
The fair value of financial assets and financial
liabilities must be estimated for recognition and
measurement or for disclosure purposes.
10,185
3,949
24,541
197
10,700
(7,531)
61,929
(6,446)
The fair value of financial instruments traded in
active markets (such as publicly traded derivatives
and trading and available for sale securities) is
based on quoted market prices at the balance
date. The quoted market price used for financial
assets held by the Group is the current bid price;
(9,637)
(31,632)
the appropriate quoted market price for financial
Profit after income tax
Add/(deduct) non cash items:
Depreciation
Amortisation of intangible assets
Employee share-based payments
Equity accounting for investments
in associates and joint ventures
Interest received
Peet Bonds effective interest
Add other items:
Distributions and dividends from
associates and joint ventures
Change in operating assets and
liabilities during the financial year
Increase/(decrease) in receivables
Decrease in inventories
Increase/(Decrease) in tax liabilities
Decrease in payables
Decrease in provisions
(333)
(1,856)
6,658
(Decrease)/increase in deferred tax liabilities
(7,534)
Net cash inflow from operating activities
67,333
57,227
20. Fair value measurement
liabilities is the current ask price.
The fair value of financial instruments that are not
traded in an active market (for example, unlisted
securities) is determined using valuation
techniques. The Group uses a variety of methods
and makes assumptions that are based on market
Valuation of financial instruments
conditions existing at each balance date.
For financial assets and liabilities, the Group uses the
• Interest rate swaps are valued using valuation
following fair value measurement hierarchy:
• Level 1: the fair value is calculated using quoted prices in
active markets for identical assets and liabilities.
• Level 2: the fair value is determined using inputs other
than quoted prices included in level 1 that are observable
for the asset or liability either directly (as prices) or
indirectly (derived from prices).
• Level 3: the fair value is based on inputs for the asset or
liability that are not based on observable market data.
Financial instruments measured at fair value
The Group’s derivative financial instruments were valued
using market observable inputs (Level 2) at the carrying value
of $3.8 million (2017: $4.6 million).
techniques, which employs the use of market
observable inputs such as forward pricing and
swap models.
• Receivables/borrowings are evaluated by the
Group based on parameters such as interest
rates and individual creditworthiness of the
counter party. Based on this evaluation,
allowances are taken into account for the
expected losses of these receivables.
• Fair value of the Peet bonds is based on price
quotations at the reporting date.
The carrying amount of trade receivables and
payables less impairment provision of trade
receivables are assumed to approximate their fair
values. The fair value of financial liabilities for
There have been no transfers between levels during the year.
disclosure purposes is estimated by discounting
the future contractual cash flows at the current
market interest rate that is available to the Group
for similar financial instruments.
99 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 100
Other notes
23. Parent entity financial information
b. Subsidiaries
and subsidiaries
SIGNIFICANT INVESTMENTS IN SUBSIDIARIES
a. Parent entity financial information
The consolidated financial statements incorporate the
21. Remuneration of auditors
22. Contingencies and commitments
SUMMARY FINANCIAL INFORMATION
assets, liabilities and results of the following significant
subsidiaries in accordance with the accounting policy
2018
$
2017
$
Details of the estimated maximum amounts of contingent
liabilities (for which no amounts are recognised in the
financial statements) are as follows:
Audit services
Audit and review of financial reports
and other audit work under the
Corporations Act 2001
Bank guarantees outstanding
Ernst & Young
367,450
381,559
Insurance bonds outstanding
Total remuneration for audit services
367,450
381,559
2018
$’000
24,585
18,680
43,265
2017
$’000
19,605
15,388
34,993
Other services
Ernst & Young
21,423
14,405
Taxation services
Tax compliance services including
review of Company income tax
returns
Ernst & Young
217,762
204,333
All contingent liabilities are expected to mature within 1 year.
At 30 June 2018, the Group had commitments of $40.3
million to purchase lots from associates and joint ventures,
at arms-length, to be on-sold to third party buyers through
the Group’s Peet Complete program.
The Directors are not aware of any circumstances or
information, which would lead them to believe that
these contingent liabilities will eventuate and consequently
no provisions are included in the accounts in respect of
these matters.
The individual financial statements for the parent entity
described in note 2(a):
show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Share-based payments reserve
Retained profits
Total equity
2018
$’000
2017
$’000
Name of Subsidiary
CIC Australia Pty Limited 1
62,769
74,012
Peet Craigieburn Pty Limited 2
588,705
479,742
Peet Greenvale No. 2 Pty Limited 2
14,962
113,754
15,055
82,159
Peet Southern JV Pty Limited 2
Peet Brigadoon Pty Limited 2
Secure Living Pty Limited 2
385,955
385,955
Peet No. 85 Pty Limited 2
13,693
75,303
13,300
(1,672)
Peet No. 108 Pty Limited 2
Peet No. 112 Pty Limited 2
Peet No. 113 Pty Limited 2
474,951
397,583
Peet Treasury Pty Limited 2
Profit/(loss) for the year
Total comprehensive income
101,474
101,474
(25,762)
(25,762)
Peet Estates (VIC) Pty Limited ²
Peet Development Management Pty Limited 2
GUARANTEES ENTERED INTO BY THE PARENT ENTITY
Details of the estimated maximum amounts of contingent
liabilities (for which no amounts are recognised in the
financial statements) are as follows:
Bank guarantees outstanding
2018
$’000
498
2017
$’000
586
Peet Estates (QLD) Pty Limited 2
Peet No. 130 Pty Limited 2
Peet Estates (WA) Pty Limited 2
Peet Funds Management Limited 2
Peet No. 119 Pty Limited 2
Peet No. 125 Pty Limited 2
Peet No. 126 Pty Limited 2
Peet No. 73 Pty Limited 2
Lakelands Retail Centre Development Pty Limited 2
Peet Mt. Pleasant Pty Limited 2
Peet No. 127 Pty Limited 2
Peet Tonsley Pty Limited 2
JTP Homes Pty Limited 2
Peet Tonsley Apartments Pty Limited 2
Holding
2018
%
2017
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
Peet Yanchep Land Syndicate 2
66.4
66.4
1.
2.
Incorporated in ACT.
Incorporated in WA.
101 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 102
23. Parent entity financial information and subsidiaries (continued)
23. Parent entity financial information and subsidiaries (continued)
MATERIAL PARTLY-OWNED SUBSIDIARIES
Financial information of subsidiaries that have material non-controlling interests is provided below. This information is
based on amounts before inter-company eliminations.
Deed of cross guarantee
Consolidated balance sheet
Peet Limited and certain wholly-owned subsidiaries are
Set out below is a consolidated balance sheet at 30 June
parties to a deed of cross guarantee under which each
2018 of the closed group consisting of Peet Limited and
company guarantees the debts of the other. By entering
certain wholly owned subsidiaries.
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Non-controlling interest
Revenue
Profit or loss after tax
Loss attributable to non-controlling interest
Summarised cash flow information:
Operating
Financing
Net outflow
Peet Yanchep
Land Syndicate
2018
$ ’000
5,661
77,496
1,463
27,818
18,100
5,866
(412)
138
2017
$ ’000
18,740
64,325
12,858
15,919
18,238
4,917
(153)
51
Peet Yanchep
Land Syndicate
2018
$ ’000
(649)
259
(390)
2017
$ ’000
(188)
449
261
Peet has provided loans to other partly-owned subsidiaries amounting to $7.6 million (2017: $1.4 million). The Group has
no further contractual obligations to provide ongoing financial support.
into the deed, the wholly-owned entities have been
relieved from the requirements to prepare a financial report
and directors’ report under ASIC Corporations (Wholly-
owned Companies) Instrument 2016/785 issued by the
Australian Securities and Investments Commission.
The companies represent a ‘closed group’ for the purposes
of the Class Order.
Consolidated statement of profit or loss
Revenue
Expenses
Finance costs
Share of net profit of associates
accounted for using the equity method
Profit before income tax
Income tax expense
Profit for the year
2018
$’000
2017
$’000
282,469
291,687
(218,012)
(235,908)
(9,911)
13,805
68,351
(19,125)
49,226
(7,965)
15,211
63,025
(18,182)
44,843
Current assets
Cash and cash equivalents
Receivables
Inventories
Total current assets
Non-current assets
Receivables
Inventories
Investments accounted for using
the equity method
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current liabilities
Payables
Land vendor liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Other comprehensive income
Items that may be reclassified to profit or loss:
Changes in the fair value of
cash flow hedges
Income tax relating to components
of other comprehensive income
Other comprehensive income for
the year, net of tax
Total comprehensive income
for the year
2,267
4,164
(680)
(1,249)
Land vendor liabilities
Borrowings*
1,587
2,915
Derivative financial instruments
50,813
47,758
Deferred tax liabilities
Provisions
Total non-current liabilities
Summary of movement in consolidated retained profits
Retained profits at the beginning of the
financial year
127,848
105,054
Total liabilities
Net assets
Equity
Profit for the year
Dividends paid
Retained profits at the end
of the financial year
49,226
44,843
Contributed equity
(24,499)
(22,049)
Reserves
152,575
127,848
Retained profits
Total equity
2018
$’000
2017
$’000
76,178
29,318
115,062
220,558
87,378
55,471
114,869
257,718
126,916
100,524
298,044
279,231
255,577
246,480
5,398
6,082
8,283
6,246
692,017
640,764
912,575
898,482
81,925
14,700
14,061
5,767
56,824
15,975
11,626
5,933
116,453
90,358
5,380
17,853
201,026
228,098
3,777
35,234
285
4,551
33,762
199
245,702
284,463
362,155
374,821
550,420
523,661
385,955
385,955
11,890
9,858
152,575
127,848
550,420
523,661
103 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 104
* At 30 June 2018, bank facility available to Peet and wholly owned subsidiaries is $150 million
(utilised at 30 June 2018: $50 million debt and $21 million bank guarantees) was extended to
1 October 2019
24. Share-based payments
Peet Employee Share Option Plan (PESOP)
and Peet Performance Rights Plan (PPRP)
Vesting and exercise conditions
Fair value of options and performance rights granted
Under the plans, options and/or PRs only vest if the
The fair value of an option and PRs at grant date is determined using a Black-Scholes option pricing model and the value of
24. Share-based payments (continued)
The establishment of the PESOP was approved by the
employees are still employed by the Group at the end of
a performance right at grant date is determined using a Binomial pricing model. The models take into account the exercise
Board and shareholders during the 2004 financial year and
the vesting period, subject to the Board’s discretion, and
price, the term of the option and/or performance right, the vesting and performance criteria, the impact of dilution, the non-
the Peet Limited PPRP was approved by shareholders at
any set performance hurdles have been met.
tradeable nature of the option or performance right, the share price at grant date and expected price volatility of the underlying
Generally, as a pre-condition to exercise, any exercise
share, the expected dividend yield and the risk free interest rate for the term of the option and/or performance right.
conditions in respect of an option and/or performance right
The inputs for assessing the fair value of the performance rights issued during the year under the PPRP were:
Lapse of options and performance rights
Set out below are summaries of options and performance rights granted under the plans:
the 2008 AGM. Employees of any Group Company
(including Executive Directors) will be eligible to participate
in the PESOP and/or PPRP at the discretion of the Board.
Invitations to apply for options and/or
performance rights
must be satisfied. However, the Board has the discretion
to enable an option and/or performance right holder to
exercise options and/or performance rights where the
exercise conditions have not been met, including, for
Eligible employees, at the discretion of the Board, may be
example, where a court orders a meeting to be held in
invited to apply for options and/or performance rights on
relation to a proposed compromise or arrangement in
terms and conditions to be determined by the Board
respect of the Company, or a resolution is passed or an
including as to:
• the method of calculation of the exercise price of
each option;
• the number of options and/or performance rights being
offered and the maximum number of shares over which
each option and/or performance rights is granted;
• the period or periods during which any of the options
and/or performance rights may be exercised;
• the dates and
times when
the options and/or
performance rights lapse;
order is made for winding up the Company. Options
granted under the PESOP and performance rights under
the PPRP carry no dividend or voting rights.
Unexercised options and/or performance rights will lapse
upon the earlier to occur of a variety of events specified
in the rules of the PESOP and PPRP including, on the
date or in circumstances specified by the Board in the
invitation, failure to meet the options’ or performance
rights’ exercise conditions in the prescribed period or on
• the date and time by which the application for options
the expiry date of options and/ or performance rights, as
and/or performance rights must be received by Peet;
determined by the Board.
• any applicable conditions which must be satisfied or
circumstances which must exist before the options and/
or performance rights may be exercised.
Eligible employees may apply for part of the options
and/or performance rights offered to them, but only in
specified multiples.
Consideration
Unless the Board determines otherwise, no payment will
be required for a grant of options and/or performance rights
under the PESOP and/or PPRP.
Grant
Date
29 Nov 17
05 Dec 17
Exercise
price
$0.00
$0.00
Expiry
date
29 Nov 32
05 Dec 32
Share price
at grant date
$1.44
$1.41
Expected
price volatility
of shares
25%
25%
Risk free
interest rate
1.86%
2.00%
Assessed
fair value
$1.328
$1.299
The expected price volatility is based on the historic volatility (based on the remaining life of the options and/or performance
rights), adjusted for any expected changes to future volatility due to publicly available information.
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefits
expense is $2,276,087 (2017: $2,098,936).
Grant date Expiry date
Exercise
price $
Assessed
fair value $
Balance
at 1 July
Granted
during the
year
Exercised
during the
year
Lapsed/
forfeited
during the
year
Balance at
30 June
Exercisable
at 30 June
30 June 2018
Options
30 Nov 07
N/A
$4.10
$1.12
1,200,000
–
–
1,200,000
1,200,000
Performance rights
26 Nov 14
26 Nov 19
22 Dec 14
22 Dec 19
21 Nov 15
21 Nov 30
21 Dec 15
21 Dec 30
23 Nov 16
23 Nov 31
21 Dec 16
21 Dec 31
29 Nov 17
29 Nov 32
5 Dec 17
5 Dec 32
–
–
–
–
–
–
–
–
$1.065
$0.938
$0.974
$0.957
$0.801
833,897
988,794
928,020
1,192,460
1,065,114
$0.849
1,380,552
$1.328
$1.299
-
-
874,347
1,232,635
(703,809)
(130,088)
(834,543)
(154,251)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
928,020
1,192,460
1,065,114
1,380,552
874,347
1,232,635
6,388,837
2,106,982
(1,538,352)
(284,339)
6,673,128
7,588,837
2,106,982
(1,538,352)
(284,339)
7,873,128
1,200,000
N/A
$4.10
$1.12
1,200,000
–
–
1,200,000
1,200,000
Performance rights
20 Dec 13
20 Dec 18
8 Sep 14
8 Sep 19
26 Nov 14
26 Nov 19
22 Dec 14
22 Dec 19
21 Nov 15
21 Nov 30
21 Dec 15
21 Dec 30
23 Nov 16
23 Nov 31
21 Dec 16
21 Dec 31
–
–
–
–
–
–
–
–
$1.27
$1.27
$1.065
$0.938
$0.974
$0.957
$0.801
$0.849
1,896,513
328,459
833,897
988,794
928,020
1,192,460
–
–
1,065,114
1,380,552
(1,866,169)
(30,344)
(323,203)
(5,256)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
833,897
988,794
928,020
1,192,460
1,065,114
1,380,552
6,168,143
2,445,666
(2,189,372)
(35,600)
6,388,837
Total
30 June 2017
Options
30 Nov 07
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
105 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 106
Total
7,368,143
2,445,666
(2,189,372)
(35,600)
7,588,837
1,200,000
25. Matters subsequent to the end of
MEASUREMENT
26. Other accounting policies (continued)
the financial year
The Directors have declared a final fully franked dividend of
3.00 cents per share in respect to the year ended 30 June
2018. The dividend is to be paid on Friday, 5 October 2018,
with a record date of Friday, 21 September 2018. No
provision has been made for this dividend in the financial
report as the dividend was not declared or determined by
the directors on or before the end of the financial year.
Subsequent to 30 June 2018, the Directors have resolved to
implement an on-market share buy-back of up to 5% of the
Company’s issued shares.
26. Other accounting policies
At initial recognition, the Group measures a financial asset
at its fair value plus, in the case of a financial asset not at
fair value through profit or loss, transaction costs that are
directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value
through profit or loss are expensed in profit or loss.
Available for sale financial assets and financial assets at fair
value through profit or loss are subsequently carried at fair
value. Gains or losses arising from changes in the fair value
of the financial assets at fair value through profit or loss
category are presented in the statement of profit or loss
within other income or other expenses in the period in
which they arise. Dividend income from financial assets at
fair value through profit or loss is recognised in the
i. Investments and other financial assets
statement of profit or loss as part of revenue from
RECOGNITION AND DERECOGNITION
Regular purchases and sales of investments are recognised
on trade-date - the date on which the Group commits to
purchase or sell the asset. Investments are initially
continuing operations when the Group’s right to receive
payments is established.
FAIR VALUE
Details on how the fair value of financial instruments is
recognised at fair value plus transaction costs for all
determined are disclosed in note 20.
financial assets not carried at fair value through profit or
loss. Financial assets carried at fair value through profit or
IMPAIRMENT
loss are initially recognised at fair value and transaction
costs are expensed in the statement of profit or loss.
Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired
or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
The Group assesses at each balance date whether there is
objective evidence that a financial asset or group of
financial assets is impaired. In the case of equity securities
classified as available for sale, a significant or prolonged
decline in the fair value of a security below its cost is
considered in determining whether the security is impaired.
When securities classified as available for sale are sold or
If any such evidence exists for available for sale financial
impaired,
the accumulated
fair value adjustments
assets, the cumulative loss - measured as the difference
recognised in other comprehensive income are reclassified
between the acquisition cost and the current fair value,
to the statement of profit or loss as gains or losses from
less any impairment loss on that financial asset previously
investment securities.
recognised in profit or loss - is removed from equity and
recognised in the statement of profit or loss. Impairment
losses recognised in the statement of profit or loss on
equity instruments classified as available for sale are not
reversed through the statement of profit or loss.
ii. Intangible assets
Intangible assets primarily consist of software and
management rights. The management rights acquired by
the Company are initially carried at cost. Amortisation is
calculated based on the timing of projected cash flows of
the management rights over their estimated useful lives.
• Management rights – 10 to 25 years
iii. Property, plant and equipment
v. Retirement benefit obligations
Property, plant and equipment are shown at historical cost
Contributions to defined contribution funds are recognised
less depreciation. Historical cost includes expenditure that
as an expense as they become payable. Prepaid
is directly attributable to the acquisition of the items.
contributions are recognised as an asset to the extent
Depreciation on property, plant and equipment is calculated
using the straight line method to allocate their cost, net
of their residual values, over their estimated useful lives,
as follows:
• Fixtures and fittings – 3 to 10 years
• Leasehold improvements – 10 years
• Property – 40 years
that a cash refund or a reduction in the future payments
is available.
vi. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset or
The assets’ residual values and useful lives are reviewed,
as part of the expense.
and adjusted if appropriate, at each balance date. An
Receivables and payables are stated inclusive of the
asset’s carrying amount is written down immediately to its
amount of GST receivable or payable. The net amount of
recoverable amount if the asset’s carrying amount is
GST recoverable from, or payable to, the taxation authority
greater than its estimated recoverable amount. Gains and
is included with other receivables or payables in the
losses on disposals are determined by comparing proceeds
balance sheet.
with carrying amount. These are included in the statement
of profit or loss.
iv. Termination benefits
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities which are recoverable from, or payable
to the taxation authority, are presented as operating
Termination benefits are payable when employment is
cash flows.
terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for
vii. Leases
these benefits. The Group recognises termination benefits
when it is demonstrably committed to either terminating
the employment of current employees according to a
detailed formal plan without possibility of withdrawal or
providing termination benefits because of an offer made to
encourage voluntary redundancy. Benefits falling due more
than 12 months after balance date are discounted to
present value.
Leases in which a significant portion of the risks and
rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Payments made
under operating leases (net of any incentives received from
the lessor) are charged to profit or loss on a straight-line
basis over the period of the lease.
107 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 108
Directors’ Declaration
In the Directors’ opinion:
a. the financial statements and notes set out on pages 73 to 109 are in accordance with the Corporations Act 2001,
i. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
ii. giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2018 and of its performance for
the financial year ended on that date; and
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
c. at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in note 23 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the deed of cross guarantee described in note 23.
Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Brendan Gore
Managing Director and Chief Executive Officer
Perth, Western Australia
23 August 2018
INVESTMENTS IN SUBSIDIARIES
including:
26. Other accounting policies (continued)
viii. Parent entity financial information
Any difference between the amount assumed and amounts
TAX CONSOLIDATION LEGISLATION
receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) the
Peet Limited and its wholly-owned Australian controlled
wholly-owned entity.
entities have implemented the tax consolidation legislation
as of 1 July 2003. Peet Limited is the head entity of the tax
consolidated group. Members of the group are taxed as a
single entity and the deferred tax assets and liabilities of the
entities are set-off in the consolidated financial statements.
The entities in the tax consolidated group entered into a tax
sharing agreement which limits the joint and several liability
of the wholly-owned entities in the case of a default by the
head entity, Peet Limited. At the balance sheet date the
possibilities of default were remote.
Assets or liabilities arising under tax funding agreements
with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in
the Group.
Investments in subsidiaries are accounted for at cost in the
individual financial statements of Peet Limited. Such
investments include both investments in shares issued by
the subsidiary and other parent entity interests that in
substance form part of the parent entity’s investment in
the subsidiary. These include investments in the form of
interest-free loans which have no fixed repayment terms
and which have been provided to subsidiaries as an
additional source of long-term capital.
ix. New accounting standards and interpretations
Except as disclosed below, accounting policies have been consistently applied over all periods presented. The Group has
adopted all new and amended Australian Accounting Standards and AASB Interpretations effective as of 1 July 2017. The
impact of new standards and amendments is not material.
Certain new and amended accounting standards and interpretations have been published that are not mandatory for
30 June 2018 reporting periods. The Group’s assessment of the impact of these new standards and interpretations is
set out below.
Reference
Title
Summary
AASB 9
Financial Instruments
AASB 15
Revenue from Contracts
with Customers
AASB 16
Leases
AASB 9 includes requirements for the
classification and measurement of
financial assets.
These requirements improve and
simplify the approach for classification
and measurement of financial assets
compared with the requirements of
AASB 139.
AASB 15 establishes principles for
reporting useful information to users of
financial statements about the nature,
amount, timing and uncertainty of
revenue and cash flows arising from an
entity’s contracts with customers.
AASB 16 eliminates the classification of
leases as either operating or finance.
Lessees are required to recognise leases
on the balance sheet for leases with a
term of more than 12 months, unless the
underlying asset is of low value.
Application
date for Group
year ending
30 June 2019
Impact on Group
financial report
The Group is in the
process of determining
the extent of the impact
of the amendment, if any.
30 June 2019
30 June 2020
A review has been
undertaken. Based on
existing significant
revenue contracts, the
extent of the impact of
the amendment is not
expected to be material.
A review has been
undertaken. Based on
existing significant lease
agreements, the extent of
the impact of the
amendment is not
expected to be material.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future transactions.
109 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 110
Independent Auditor’s Report
Independent Auditor’s Report (continued)
111 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 112
Independent Auditor’s Report (continued)
Independent Auditor’s Report (continued)
113 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 114
Independent Auditor’s Report (continued)
Independent Auditor’s Report (continued)
115 ANNUAL REPORT 2017 | PEET LIMITED
PEET LIMITED | ANNUAL REPORT 2017 116
Independent Auditor’s Report (continued)
Securityholder Information
Distribution of ordinary shares and Peet Bonds
As at 25 September 2018 there were 2,158 current holders of ordinary shares, 1,350 current holders of Series 1, Tranche
1 Peet Bonds (“PPCHA Bonds”) and 482 current holders of Series 2, Tranche 1 Peet Bonds (“PPCHB Bonds”). These
holdings were distributed in the following categories:
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
No of
Shareholders
% of Issued
Shares
No PPCHA
Bondholders
% of Issued
PPCHA Bonds
No of PPCHB
Bondholders
% of Issued
PPCHB Bonds
459
613
379
631
76
2,158
0.02
0.39
0.60
3.47
95.52
100.00
1,245
89
8
7
1
36.59
19.25
6.35
17.23
20.58
1,350
100.00
418
54
6
3
1
482
31.42
23.55
7.72
8.86
28.45
100.00
There were 338 shareholdings of less than a marketable parcel of $500 (428 shares).
There was 1 holding of PPCHA Bonds of less than a marketable parcel of $500 (five PPCHA Bonds).
There were nil holdings of PPCHB Bonds of less than a marketable parcel of $500 (five PPCHB Bonds).
Securityholders
The names of the 20 largest holders of ordinary shares as at 25 September 2018 are listed below:
Name
Scorpio Nominees Pty Ltd
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