Good morning, and thank you for joining GemLife's first half FY 2025 results update. My name is Adrian Puljich, and I'm the Managing Director and Group CEO of GemLife. Before we begin, I would like to acknowledge the Kombumerri peoples, the traditional custodians of the land that we are meeting upon today. We respect their long history, ancestry, and culture. We pay our respects to the elders, past, present, and emerging, for they carry the memories and traditions of past times. Joining me today is Ashmit Thakral, Chief Financial Officer and Joint Company Secretary. Today is a historic moment in time for the business, marking GemLife's first results update as a listed company on the ASX. Indeed, this is my first investor conference call, and I'm proud to share with you today GemLife's continuing growth story and our solid financial and operational performance.
GemLife is a founder-led developer, builder, owner, and operator of land lease communities, leveraging over 40 years of industry experience that can be traced back to the Puljich family, who have a long-standing history and established legacy in the sector since 1982. GemLife's passion is to provide best-in-class homes and community facilities tailored to homeowners aged 50 and over who are looking for an active and socially connected lifestyle. GemLife is poised for long-term growth, having organically secured a guaranteed 10+ year greenfield development pipeline. The business stands ready to deliver responsible and stable growth, underpinned by consistent development profit margins from home sales and a self-perpetuating site rental annuity book. If you look at the slide in particular, you will note that there are 32 communities totaling 9,913 sites. Out of the 32 communities, 18 of those are either completed, active, and under development.
As at the 30th of June 2025, 1,923 homes are occupied, paying a weekly site fee. That leaves a balance of 7,990 homes to deliver over the next 10+ years. We go to page six. GemLife's business model is centered on two distinct revenue streams: new home settlement revenue, which we define as development, and site rental income, which we define as community operations. GemLife does not and never has charged a DMF or a deferred management fee and does not rely on non-core income streams from other asset classes. GemLife is proud to be a leading Australian pure-play land lease community developer, builder, owner, and operator. GemLife reaffirms its commitment to being a placemaker for Australia's downsizing over-50s market and will continue to exclusively service this cohort into the future.
GemLife is a fully vertically integrated operating platform that is responsible for the delivery of every single touchpoint in the life cycle of a developing and operating community. GemLife continues to successfully demonstrate its competency with respect to acquisitions, civil, residential, and commercial construction activities, along with post-construction support, sales and marketing, resort management, and operations. Our fully integrated business model allows us to deliver superior homes while enabling development margins and long-term site rental income. Every single home, common area, and facility has been exclusively built by GemLife's in-house licensed builder. GemLife's in-house licensed builder holds an open, unrestricted builder's license across the states in which we currently operate. By being our own builder, we are able to respond to market forces and deliver product without being overweight with inventory at our communities.
We can absorb our build margin that would otherwise be paid to a third-party builder, which is why our margins are and remain so strong. GemLife is also one of only a select few operators that manufactures and deploys its own proprietary chassis system that meets and satisfies the regulatory framework of each Australian state-based legislative instrument. Put simply, we do not modify our proprietary chassis system and therefore can deliver a consistent, quality product offering to our customer in each state whilst remaining sympathetic to the fragmented regulatory environment. We go to page eight. GemLife's mission centers on creating resort-style master plan communities that empower Australians over- 50s to live actively, socially, and independently. It is about creating communities that enrich lives, spark connection, and provide an environment where people can live well with a renewed sense of possibility and dignity.
GemLife's initiatives, particularly aging- in-p lace, is a commitment we make to homeowners to preserve their welfare whilst facilitating positive lived experiences. If we go to page nine, before I hand over to Ashmit, I draw your attention to this particular slide on page nine, and I invite you to run your eye from left to right of this particular slide, which gives you a great snapshot of the GemLife vertically integrated machine delivering all elements of civil construction. You can see the site being developed with retaining walls, slabs being cut, slabs going down, chassis systems going down, frames going up, the communal facilities, 4,000 sq m facilities, which we opened at the end of last month, now available to homeowners, and also our homeowners occupying homes within that construction precinct.
What that enables us to do as a vertically integrated builder is we can deliver the various disciplines from both civil, commercial, and residential construction whilst our homeowners are living on site. I'll now hand over to Ashmit to discuss our financial performance.
Thank you, Adrian, and good morning, everyone. Before I kick off on slide 10, I thought it would be good to give a reminder that our financial year-end is actually 31 December, and so the results we are reporting on today are for the six months ended 30 June 2025. We're really pleased with the half-year performance, with the business executing its strategy and delivering results ahead of our prospectus forecasts. Revenue exceeded prospectus by 6%, driven by higher sales prices on our premium homes. This momentum flowed through to earnings with EBIT 9.5% above forecast and underlying NPAT, which was 8.4% higher. It is worth noting that the prospectus forecast for the first half was a combination of actual results for January to March and forecasts for April to June.
Therefore, the outperformance we achieved is entirely from outcomes in the April to June period, which we felt really highlights the strength of our recent operating performance. As Adrian mentioned earlier, we have a really simple business model. We build and sell houses for profit, which forms the basis of our development segment, and we collect rent on the land that is leased to the homeowners, which we refer to as community operations. Over the next two slides, we'll unpack those segments a bit more to look at their performance and their key financial drivers. Moving to slide 11 to cover the development segment. This half, we settled 119 homes, which was two more than the prospectus, but the key driver for growth in this segment was the home sales prices achieved, which ultimately boosted our average home build margin to AUD 383,000 per home versus AUD 377,000 in the prospectus.
When compared to FY 2024, this was an increase of over 13% on both sales price and build margin on a per-home basis. We're expecting a significant step up in settlements for the second half of the year, driven by the strong pipeline of active projects underway. Importantly, we already have the sales at hand to support this, with 233 contracts signed and a further 30 more expressions of interest as of 30 June 2025. This comfortably covers our target of 214 settlements for the second half and also provides strong momentum heading into FY 2026. As we settle more homes, our portfolio of occupied homes grows as well, which leads us to the community operating segment on page 12. Once we hand over a home to a resident, due to the nature of the site agreement, that home essentially stays 100% occupied.
Further, each site agreement has contracted annual increases, and all new agreements in Queensland and Victoria are signed at the greater of 3.5% or CPI, or in New South Wales, these are non-fixed and can be increased in line with market. As of 30 June, we had a total of 1,923 occupied homes, and we've provided a breakdown of the increase mechanisms for these agreements on the left of this page. Despite the fixed increase settings, the average weekly site fee in the first half of the year rose 5.3% above the FY 2024 average, driven by our ability to reset fees for new entrants and market levels, as well as some of the discounts we previously offered now coming to an end with community facilities being handed over to residents.
This is a really stable and predictable rental profile, which is why the segment operated largely in line with the prospectus, except for the commission on resales, which was positively more than anticipated. This led to an increase in the community operating profit of about 1.4% in total. Looking ahead, more occupied homes, ongoing annual increases to site fees for existing homeowners, new pricing of site fees for incoming homeowners will continue to drive the growth of this segment. As some of our communities mature, we're also seeing our operating margins improve as well, which will further add to the earnings growth. On page 13, we've provided a summary of the segments that we've just discussed down to EBITDA and how they compare to prospectus, and it's been good to see that every line item is either ahead or in line with our forecasts.
We also saw the corporate segment record lower net operating expenses after other income, which ultimately led to the group EBITDA being 7.7% ahead of prospectus, and that also led to an improvement in the EBITDA margins. Moving on to the balance sheet on page 14, given we just listed on the 3rd of July, we provided pro forma numbers here as the IPO had not yet happened as of 30 June, and the statutory balance sheet would not be reflective of our current positions. Our pro forma gearing is at 26.2%. With the majority of our pipeline already acquired or secured, this positions the business up for continued growth as we deliver more homes.
We also have plenty of headroom in our debt facility to fund this growth, alongside significant capital that is being returned and recycled from communities reaching completion, where completely capitalized to deliver on the next 10 years and the pipeline we have in hand. While we do expect gearing to rise as we develop the new sites and build a clear runway for the team to hand over homes, we remain confident it will stay within our target gearing levels of 25%-35%. Prior to the IPO, our drawn debt was about 50% hedged, and so at the moment, after the repayment of debt from proceeds from the IPO, we are a bit more hedged than where we would like to be, but positively this is at a reasonable rate.
Over the next couple of years, as we draw on more debt to fund the development on new sites and the hedged amount decreases, we will naturally stabilize our hedge profile to more optimal levels. On page 15, we highlight a key feature of GemLife's vertically integrated platform that Adrian touched on earlier and how this supports our capital management. With our own open unrestricted building license, we can enter into residential building contracts directly with homeowners, which allow us to collect progress payments as we build our home. We've given an example here on the bottom right of this page, which I'm not going to go into, but you can see there that the progress payments collected more than covers the cost of each relevant stage, creating a positive cash flow as we build those homes.
In addition, we build stock homes to maintain supply for buyers who prefer to purchase a complete home without variations or who are not able to make progress payments. These homes are built in response to market demand, ensuring we do not carry any excess inventory. While we have ramped up home construction across our communities, the net spend on homes, including homes under construction, is still just below AUD 40 million after taking into account progress payments already received. In addition to the 58 complete homes, we have a further 202 homes under construction, where at least a slab has been poured already, which supports our expected step up in settlements in the second half of the year. Importantly, unsold stock, including display homes, was only 27 across 10 communities. This demonstrates the benefit of our flexible approach, allowing us to scale construction up or down to match demand.
I'll now hand over back to Adrian to go over the portfolio with some key updates.
Thank you, Ashmit. GemLife's portfolio continues to evolve and mature, which is directly attributed to construction milestones, new home settlements at establishing communities, and the launch of new communities and sales initiatives. We continue to demonstrate our ability to operate in a multi-state environment with the support of digital platforms and systems, enabling a harmonious working relationship between our site-based blue-collar staff and head office white-collar staff. If you take into consideration the recent purchase of the Aliria portfolio, and we will go through the slides in a moment, you will get a greater appreciation and understanding for the vertically integrated machine and how GemLife has been able to mobilize that machine in a timely manner. If we move to slide 17, you will see development approval was obtained for 211 home sites in Cotswold Hills, Toowoo mba, Queensland.
On the right side of that slide 17, those previously Aliria-owned sites, being Heritage Park, Logan Grove, and Lighthouse Bay, have had earthworks mobilized with clearing and civil works commencing on those projects at this point in time. We move to slide 18, and I'm pleased to advise that the GemLife Gold Coast Country Club has recently opened to the homeowners at that community, along with our GemLife Tweed Waters Country Club in Tweed Heads, New South Wales. We have also started our GemLife Moreton Bay Country Club, which is in the Southeast Queensland corner, as well as our Hilltop Pavilion at GemLife Gold Coast.
We were recently awarded the winner of the Master Builders Queensland Sunshine Coast Housing and Construction Awards for tourism and leisure facilities for over AUD 10 million, and that particular facility, one which we are immensely proud of, will now progress into the state awards and hopefully into the national finals later this year. If we look at slide 19, you'll see settlements across multiple communities in Queensland, ensuring that GemLife Pacific Paradise, for instance, is now a fully established going concern. GemLife Highfields Heights kicking off with its first settlements in the second half of this financial year, and GemLife on Dean as well, expecting its first settlements in the second half of this financial year.
On something very exciting for the group, we have a number of sales launches across new communities, being at Elimbah, Kilcoy Greens, Cotswold Hills, Logan Grove, Heritage Park, and Lighthouse Bay, or Queensland-based communities that continue to underpin the success and the booming housing market here in Queensland. On slide 20, when we look at GemLife's portfolio, it consists of 32 communities totaling 9,913 sites, with 21 of those communities in Queensland, 7 in New South Wales, 3 in Victoria, and 1 in South Australia. GemLife is sufficiently capitalized to deliver its portfolio and will continue to find new sites to drive growth. GemLife has a proven track record in executing its acquisition-led growth strategy and continues to proactively assess opportunities to expand its portfolio. Site selection is critical to the GemLife business.
We are not necessarily looking for flat sites, but instead, we are looking for sites with undulation, view corridors, and specific aspects such as bushfront lots, lakefront lots, and breezes. This allows us to deliver different housing product types, being single, split-level, or double-story product, thus ensuring we protect and can enhance our profit margins. To further maximize our margins, we will take reasonable and informed planning risk on opportunities that we believe are accretive to GemLife's value. This is one of the main reasons why we can make cash profits on development, as well as buying land at market value instead of paying a premium for the development approval privilege. We have enough DA-approved projects where we can afford to take time getting approvals on these new projects. Housing markets are improving, buoyed by our favorable interest rate environment and sector thematics.
Growth in Victoria remains a priority for the GemLife business, as well as South Australia and the booming Queensland market. New South Wales' planning and regulatory changes are showing that the sector is open for business in that state, and we look forward to exploring opportunities along with both our listed and unlisted tiers. If we go to slide 22, there are six GemLife highlights, which I won't labor too much on this particular slide, but effectively, this is a business that has a track record of over 40 years of experience in not only building, owning, and operating these communities, but developing it through its vertically integrated platform.
The business model has demonstrated over the last 40 years, but in particular within the GemLife business over the last nine years, its ability to grow organically and look at opportunities in a focused, measured way that enables us to derive a development margin whilst collecting the weekly site fee. If we look at slide 23, as I said, GemLife is sufficiently capitalized to deliver the 10,000 home plus pipeline. Recognizing traditional broadacre development sites remain our top priority, however, the business has a strategic focus on launching pocket parks, with our GemLife on Dean Rockhampton project performing exceptionally well. Also, later this year, we will be delivering Australia's first, and of course, our first vertical land lease community right here on the Gold Coast, which will ensure that the business can deliver its pipeline whilst also ensuring future growth opportunities in that pocket park and vertical space.
Our growth is underpinned by our ability to make a development margin, which we can then recycle into new greenfield development opportunities and support our organic growth story, which has been the case since our inception. To look at the outlook, our first-half performance demonstrates the strength of GemLife's communities and the depth of demand for high-quality, purpose-built housing for Australia's downsizing market. We are seeing continued momentum in sales and settlements, and with new projects coming online in the second half, we are well placed to deliver on our full-year commitments and create lasting value for our homeowners and security holders. As we enter the second half of FY 2025, GemLife reaffirms its prospectus forecast of pro forma underlying NPAT of AUD 86.2 million for the full year and AUD 105.5 million for the 12 months ending June 2026.
GemLife is targeting 333 home settlements in FY 2025, underpinned by the activation of the final stages at a number of communities and the commencement of settlements at GemLife Highfields Heights in Toowoomba, Queensland, and GemLife On Dean Rockhampton, Queensland. With 263 sales already in hand, a growing number of active projects contributing to settlements, and a strong pipeline of homes under construction, we're very confident of achieving the higher volumes for the second half of the year with 214 settlements, while still needing sufficient inventory levels to support future demand. The successful AUD 750 million IPO in July 2025 has materially strengthened GemLife's capital base, enabling the group to accelerate development activity and pursue strategic growth initiatives.
The business remains well positioned with its portfolio and pipeline of just under 10,000 homes to capitalize on the growing demand for low-maintenance housing in master planned communities that support social, active, and wellness-focused living, driven by the nation's aging population and evolving lifestyle expectations. With a strong development pipeline, supportive demographic trends, and the resources to accelerate our growth, GemLife is exceptionally well placed to continue to innovate and set the benchmark for best-in-class communities. We are confident in building on our first-half momentum to deliver sustainable long-term growth for security holders while enriching the lives of our valued homeowners. We will now open the line for questions and welcome your contribution.
Thank you. If you wish to ask a question, please press Star and 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star and 2. If you are on a speakerphone, we do ask that you please pick up the handset to ask your questions. Your first question comes from Lauren Berry from Morgan Stanley. Please go ahead with your question.
Thanks. Good morning, guys. I'm just interested in your contracts on hand, the sales rate. If you could give us a little bit more color on how monthly sales have been evolving over the half, please.
Thanks, Lauren. Yeah, we're very comfortable with what we've seen so far in terms of data for July and August. In terms of our IPO forecast of what we modeled in, it's pretty much exactly in line, slightly ahead, but that's why it's given us enough confidence to come out today to say we're reconfirming our prospectus forecast for the second half of the year.
Yeah, and to support Ashmit's comments there, we are seeing great expressions of interest across multiple communities. In the last few months, we've recorded over 700 inquiries via our GemLife Hub, which enables us then to triage those leads across our various communities in the country. We remain extremely positive with great tailwinds for the housing sector to drive the performance for the second half of the year.
Okay, great. Look, the beat today was really driven by the settlement price coming in ahead of where your prospectus was. The 233 lots that you have on hand, do you have the average sale price for those contracts?
Yeah, thanks, Lauren. Yeah, we do. Again, some of these contracts are a mix as well, as we have some sales contracts in Rockhampton that are on the lower end of AUD 600,000, but the average sale price is looking strong where we are at the moment. Yes, there are still more premium homes that are settling in the second half of the year, which together on a blended rate is giving a strong number, and that is why, again, we are very confident with where the second half is looking at, but mindful also that we do not want to get ahead of ourselves as we still want to ramp up the commencement of new projects, which, as outlined in our prospectus, we did sort of flag that we would be selling more standard homes in the beginning of some of those new projects.
We were a bit tempered with our forecast and the revenue prices that we put in the prospectus, but look, it's looking good so far, and that's led us to reconfirm everything.
Okay, great. Thank you. Final one from me. Look, we've had a bit of wet weather in the last two months. Have you seen any impact in the timing of construction across your communities so far?
Yeah, look, we've obviously had some disruption to do with weather. However, our construction teams are now well versed with weather. We've had a few years of complaining about the weather across the construction industry, more broadly speaking. I think for us as a business, we've hedged against that quite successfully. We are delivering houses between that 14 week-16 week window for an average 200 sq m house across our communities, which we're very proud of being able to tell our security holders. For us, moving forward, as the weather will continue to play a part in the Australian summer, again, we will be prepared to deal with that and condition our buyers to also be prepared for that, but we're confident that the systems that have stood well for us over the last few wet weather periods will continue to hold into the future.
Okay, thanks, guys. Congrats on the first result.
Thanks, Lauren.
Thanks, Lauren.
Once again, if you would like to ask a question, please press Star and 1. Our next question comes from James Ferrier from Wilsons Advisory. Please go ahead with your question.
Hi, Adrian. Ashmit, thanks for your time this morning. Probably really following up on those questions before, that first-half result around the average selling price and the home build percentage margin being higher and lower, respectively, compared to what was in the forecast. Ashmit, as you said, that's really three months of actuals and three months of forecasts. Can you give some color around the drivers there? Is that quantum of variability over that timeframe of visibility, is that typical for the business?
Yeah, so look, good question, James. There were a few, I guess, would you say, premium homes that settled in the April to June period. And some premium homes have a higher dollar margin and higher % margin, but some premium homes just have a higher dollar margin, but as a % margin, maybe a bit slightly lower, for example, split levels in double-story homes, where we still target a better dollar cash profit, which is what we pretty much achieved in that timeframe, which sort of led to that variance that you're referring to. Look, moving forward, while we still do have premium homes coming in the second half of the year, we also, as I said, starting settlements at new projects that have contracts at AUD 600,000 .
There is a wide range of homes coming in the second half of the year, which is sort of, I guess, maybe when we looked at the forecast, looking at it on an average basis, but we are still really confident of what is coming forward.
Yeah, and just helpful. Adrian here, James, just to add to Ashmit's answer, I think also when you look at our second half, when you loop in the Rockhampton settlements, GemLife's been able to deliver product at that AUD 100,000 price point all the way through to the million-dollar-plus price point whilst maintaining those margins. For us, it's making sure that, one, we hit our forecast, and two, that those margins are preserved across those varying price ranges. Yes, over the last three months, we've seen some higher settlement pricing that's attributed to locations such as GemLife Moreton Bay and indeed GemLife Gold Coast, but we'll see a greater spread of sale prices, which should give security holders comfort in GemLife's ability to service not only the higher end, the luxury end of the market, but also the mid and low range of land lease community living.
Yep. Thanks, Adrian. That's helpful. Second question, and probably looking into the second half here now, you have 31 homes sold awaiting settlement. You have another 233 under contract. Most of those seem to be under construction already. It means you are highly likely to settle on those in the second half. Plus, you have some display homes for sale as well. I mean, it looks like there is decent upside just on those numbers alone. It looks like there is decent upside to the prospectus forecast at 214. Is there just typically some slippage that inevitably happens in these sorts of numbers? You always find yourself in a situation where the numbers look like they are ahead, but there is slippage, and then you sort of get to where you thought you would?
Yeah, it's a very good question. I think that's right. I think for us, it's about meeting our forecast. There will obviously be some slippage due to wet weather. The Australian summers have been very wet. There could be some delay or some carry-forward settlements that may peg those settlement rates back into the forecast line. Look, we're extremely confident and comfortable in delivering the forecast. We will continue to monitor the release of future stages across some of the new communities where sales initiatives are just launching. I refer you all to those slides 16 to 20.
I think for the moment, the forecast period is what we've set our sights on, particularly being our first year on the ASX and making sure our security holders are comfortable with our vertically integrated platform, and two, have confidence in our ability to deliver it competently and on time.
Yeah, thank you. That's helpful. Last question is around the investing cash flow and specifically the line item around the purchase and development of investment properties. As we sit here today, you've got prospectus forecasts for that line item, and it's obviously supportive of a really attractive growth profile on home settlements. When we look beyond the prospectus forecast, and acknowledging that's sort of 12 months away, what are your expectations sitting here today around whether that line item continues at a similar sort of run rate, or does it moderate a bit, or do you think it actually increases? What are your thoughts as we sit here today?
Yeah, good question, James. Ultimately, I guess the key feature of our business is that we can scale up and scale down appropriately as what settlements are achieving. To sort of comment how much we'd spend sort of more than 12 months ahead, it probably would just be a bit unhelpful at this point, I think. Really, when we kind of see what settlements we achieve over the next 12 months and what sites are being activated and what sales are coming through, we can then decide whether we want to ramp that up or not. Yes, obviously, as we've given sort of a bit of indication of what projects are coming online, and if they've got DA approval and they're ready to go from an IR perspective, it makes the most sense to kick them off.
If the sales are supporting and we can resource the project, absolutely, we'll get started. We'll definitely give a bit more color on periods post the prospectus forecast as we go through our next few reporting cycles. At the moment, we've given guidance out 12 months. Come December when we give our full year results, we'll definitely provide a bit more color on that as well based on where we're seeing sales and settlements. That's really the sort of, I guess, answer, James. Does that sort of answer that?
Yeah, it does. No, that's helpful. Appreciate your insights today, James. Thank you.
Thank you.
At this time, there are no further questions. I'd like to hand the floor back over to Adrian Puljich for closing remarks.
Before I close today's call, I wish to take this opportunity to sincerely thank our GemLife family, staff and management team for bringing to life our exceptional communities, our senior banking group who have supported and backed our vision and growth story since October 2016, our security holders who share in GemLife's values driven by people, purpose, and place, and most importantly, our valued homeowners who we serve unconditionally, the heart and soul of this very business. Thank you for joining today's inaugural GemLife investor conference call. Ashmit and I look forward to meeting with many of you during the investor roadshow over the coming weeks. I now conclude and will close this call.