Ladies and gentlemen, thank you for standing by, and welcome to the Ingenia Communities Group full year 2020 results briefing. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. You may register to ask a question via the telephone by pressing zero followed by one on your telephone keypad at any time. I must advise that this conference is being recorded today, Tuesday August 18th, 2020. I would now like to hand the conference over to your first speaker today, Mr. Simon Owen, Chief Executive Officer and Managing Director. Thank you, sir. Please go ahead.
Good morning, everyone, and thanks for your attendance today. I'm excited to be presenting another strong result underpinned by doing the basics well, focusing on our residents and guests, recruiting and retaining the best talent, growing our rents, increasing occupancy, building and selling quality homes, integrating acquisitions, and being vigilant on our costs. Like most businesses in Australia, Ingenia has been adversely impacted by COVID. Our holidays business was effectively closed for the best part of three months, including what was shaping up as a strong Easter. Pre-COVID, we were firmly on track for a record 400-plus settlements before landing at a still compelling 325 new homes. However, we recognized the potential threat of COVID early, and our decisive agile response has reduced the impact.
It is very pleasing, in particular, to report that across the business to date, we have not recorded a single case of COVID amongst our residents, our guests, and our staff. This did not happen by chance, and I would especially like to thank and acknowledge the continuing tireless commitment of our front line and support teams. I believe that COVID has demonstrated the quality and resilience of our portfolio construct. Ingenia is firmly focused at the affordable end of the seniors housing market, which is the deepest part of the market, with few competitors or alternatives. Ingenia Gardens, our affordable seniors rental business, is presently trading at an all-time high occupancy rate of 94.4%. Rent collection within our lifestyle business remains unchanged. Our business is underpinned by cash rents, which are largely funded by Commonwealth Government pension and rent assistance payments.
The vast majority of our residents are retired and are not recipients of JobKeeper or JobSeeker payments. Arrears or requests for rental abatements or deferrals are nonexistent. Our business model is firmly focused at the lower and mid-quartile private markets in outer ring metro and accessible sea and tree change locations where there is genuine resilience in home prices and underlying demand. Our incoming residents are not requiring a mortgage or refinance. They're downsizing, both in terms of property size and financial commitment. Ingenia's operating and development margins have held firm, and the demand outlook remains attractive. Our holidays business is strongly leveraged to a recovery in domestic tourism, and our forward bookings are up some 24.7% on the same time last year.
Caravan sales are very strong, and the two most popular regions in Australia for caravaning and camping is the New South Wales North Coast and the New South Wales South Coast, where Ingenia has market-leading positions. In late April, Ingenia made the decision to raise capital. The purpose of this was not to deleverage the balance sheet, which was already in excellent shape. It was about sector leadership, securing additional growth, and creating compelling long-term security holder value. COVID is, unfortunately, creating compelling opportunities across the market in which we operate. Many competitors are pausing construction, holding back on marketing spend, or withdrawing from M&A. Current market dislocation represents a once-in-a-decade opportunity to build long-term sustainable market share and slingshot past the competition. Today, we have announced the pending acquisition of the largest DA-approved lifestyle community site in New South Wales.
It's located just one hour north of Sydney, and it's around the corner from our longstanding Grange community in Morisset on the New South Wales Central Coast. Demand drivers remain strong across the industry and, if anything, have been magnified by COVID. Ingenia achieved a record 28 settlements in July. In the same month last year, we had just 12 settlements. An aging population, housing affordability issues, and the attractiveness of community living are continuing to drive inquiry and sales across our portfolio. Many of our communities are in attractive coastal markets, such as Port Stephens, Coffs Harbour, and Hervey Bay, which remain accessible and indeed, highly desirable to key metro markets. Our business model is uniquely leveraged to the intersection of three key thematics: an aging population, a continuing housing affordability crisis, and several generations of people retiring with limited savings beyond the family home.
We have an incredible growth runway in place, and our sector-leading development pipeline of over 3,000 home sites is significantly larger than any of our competitors. Ingenia has significant capital optionality with our own lowly geared balance sheet, our development joint venture with Sun Communities, and our Eighth Gate Funds Management platform. This all strengthens our capability to deliver, grow, and lead. I remain very confident that we are in the initial phases of an extended period of compelling earnings growth for our shareholders. I'm now going to move into the presentation. Joining me on the call today are a number of the Ingenia executive team, including Scott Noble, our Chief Financial Officer, Nikki Fisher, our Chief Operating Officer, Natalie Kwok, who leads M&A, and Donna Byrne, who heads investor relations. We're going to start briefly on page two, which is our highlights.
Record revenue of AUD 244.2 million for the year, which is up 7% on 12 months ago. To put that in perspective, full-year revenue for the 2017 financial year, only three years ago, was only AUD 149 million. My personal favorite, operating cash flow, is up 13% to AUD 67.2 million. We settled 325 new homes for the year, just shy of the record achievement of 337 homes in 2019. We commenced the current financial year with 187 homes deposited or under contract. Over the course of the year, we were able to lift average home prices by 12% to AUD 430,000, of course, this flows through to dollar margins. On page four, we've collected some data from CBRE and our own rent roll, which shows the resilience of our rent collections when compared to the traditional REIT classes of office, industrial, and retail.
Across more than 5,100 residents in our Lifestyle and Gardens communities, we have a total of five residents who are on structured payment terms as a result of COVID. I'm now going to move on to page eight of the presentation. As I noted previously, today, we are delighted to announce the pending acquisition of a 427-home, DA-approved development site at Morisset on the New South Wales Central Coast, about one hour north of Sydney. The median house price in this catchment exceeds AUD 500,000. This is the largest DA-approved lifestyle village site in New South Wales, with construction likely to commence in early 2021. The purchase price is a little over AUD 30 million and is staged over several years. The development will be carried out within the joint venture with Sun Communities, and Ingenia retains the right to acquire the community once it is stabilized.
This is a truly amazing development site and is in very close proximity to our highly successful Grange community. I'm now going to hand over to Scott to step through the group's key financials and capital management.
Thank you, Simon. Good morning, everyone. While 2020 was an extremely challenging year, the group delivered solid results and is well-placed as we move into 2021. Running through our key financials, revenue increased 7% to AUD 244.2 million, driven by growth in our lifestyle rental income and development revenue. Development revenue grew 7% with 325 turnkey settlements across Ingenia and our development joint venture, delivering a 12% increase in average sales price on the prior year. EBIT increased 17% to AUD 71.9 million. This result, while pleasing, was adversely impacted by COVID-19, which materially impacted our tourism and development result, with the mandated closure of our holiday parks and delayed house settlements. This adverse impact of COVID was partly offset by an AUD 4.4 million JobKeeper subsidy, which enabled us to re-engage casual staff that were stood down at the beginning of COVID-19.
EBIT was also adversely impacted from provisioning for additional casual leave entitlements associated with the recent WorkPac Federal Court case. Underlying profit increased 25% to AUD 59.1 million, and underlying EPS increased 5% to AUD 0.221 per security. Statutory profit increased 7%, AUD 31.5 million. The statutory result was adversely impacted by fair value losses on investment property relating to transaction costs and stamp duty on new acquisitions, a COVID earnings adjustment on a number of our tourism assets, a write-down in non-core assets, the realization of development profits on high-margin projects, and maintenance capital on properties which as yet has not yet translated to fair value growth. The group's underlying and statutory EPS numbers were impacted by the group's recent equity raise, which increased securities on issue. The group's operating cash flow was up 13% to AUD 67.2 million, with collections through COVID from our Ingenia Gardens and our Lifestyles business being unaffected.
Through COVID, we had less than AUD 5,000 of uncollected rent related to COVID hardship, reflecting the quality of the cash flows from these businesses. Net asset value per security increased 9% to AUD 2.90 per security. A final distribution of AUD 0.044 per security has been declared, taking the full year distribution to AUD 0.10 per security. This is lower than last year on a cents per security basis due to a combination of increased number of shares on issue from the capital raising that was completed in May, and the current uncertainty in the market. Turning to slide 11. While the result was adversely impacted by COVID, Ingenia still delivered a 17% growth in EBIT from prior year, and continued to grow margins across all business segments, delivering continued scale improvement. Lifestyle and Holidays EBIT increased 9% to AUD 29.8 million, with Lifestyle and Holidays stabilized margin improving to 39.7%.
Lifestyle Development EBIT grew 19% to AUD 39.9 million, with Development EBIT margin growing 340 basis points to 31.5%. This improved result was driven by a higher average sales price and an improved margin with our greenfield projects at Latitude One and Plantations delivering high above-ground development profit. Ingenia Gardens continued to deliver strong cash flow for the group, ending the year with a record high occupancy of 94.4%. Turning to slide 12. Our capital management position has strengthened with continued support from our investors and lenders. During the year, we entered a new seven-year, AUD 100 million debt facility, taking our total available facilities to AUD 450 million. We improved the group's borrowing terms and covenants. Over the year, we successfully raised AUD 328 million in new equity, positioning us well to grow the business by investing in new assets and our development pipeline.
We completed the acquisition of the Eighth Gate Capital Funds Management platform, which expanded the group's assets under management by AUD 140 million, providing Ingenia with new revenue streams and access to a strong investor base. We made really good progress on our development joint venture with Sun Communities, which delivered its first settlements at its Freshwater project. At June 30th, gearing was 5.7% and LVR was 8.4% compared to our covenant of 55%. Weighted average debt maturity was 3.3 years with our next maturity in February 2022. The cost of drawn debt was 2.5% at June 30th. This has reduced to 1.92% in August as our longer-term debt rolls have matured. Turning to slide 13. At June 30th, we had 15 assets independently valued.
The average capitalization rates of our portfolio have remained unchanged from December 31st, with the Lifestyle and Holidays portfolio at an average of 7.44%, while our Ingenia Gardens average capitalization rates are carried at 9.72%. A number of our tourism asset valuations were impacted by a COVID earnings adjustment, which will unwind in the future as restrictions ease. Average cap rates continue to remain high when compared to other real estate classes. Post-closing our result, we've seen some recent lifestyle acquisitions at new record cap rate levels as investors seek the high-quality cash flows the assets deliver. Thank you, Simon.
Thanks, Scott. We might now move into operations, so moving forward to page number 15, which focuses on our Lifestyle and Holidays business. Over the course of the year, we were able to grow our lifestyle business by 24% to 4,034 permanent sites. In July, post results, we acquired and settled the Sunnylake Shores community on the New South Wales Central Coast, which has grown this number even further. Through COVID, we have made the decision to either sell or let options lapse on a few development sites or regional communities with expansion land, which is why the number of development sites has decreased over the past 12 months. This pipeline still represents, by a considerable margin, the largest development pipeline in the sector. Moving on to page 16.
Total rental income from our Lifestyle and Holidays business was AUD 72.2 million for the year, up 6% on the prior year. Pleasingly, permanent rental income was up 27% to AUD 31.8 million, and average weekly rents grew by 3.6% to AUD 183 per week. EBIT for the year grew by 9% to AUD 27.4 million. We've been able to further improve our operating margins by another 40 basis points out to 39.7%. As noted previously, these results were impacted by the mandatory closure of our holiday parks from late March through to early June. Moving on to page 18, which is Ingenia Gardens. Again, as I noted previously, it is now trading at an all-time high occupancy of 94.4%.
Through COVID, we have experienced significantly fewer move-outs, whilst new move-ins have broadly remained the same. Rent has tracked flat over the past 12 months as rent incentives to build occupancy in Western Australia offset standard rent increases achieved across the eastern states. On page 19, we discuss our funds management strategy. Our plan was to launch a new AUD 100 million mixed-use community fund in the second half of 2020. However, this has been deferred into 2021, primarily due to the inability to meet with new investor groups. Significant progress has been made across the existing funds over the past 12 months, including preparing and executing specific asset management plans. In July, Ingenia acquired a DA-approved development site in Ballarat, Victoria, out of the platform to improve distributions for underlying investors.
Funds management provides Ingenia with additional capital flexibility in terms of how we fund our growth, and we also retain a last right of refusal over the communities within each of the funds, should the funds ever be wound up. Moving through to development on page 21. New home settlements finished marginally lower for the year at 325 settlements. In February, pre-COVID, we were firmly on track for a record 400 settlements. Development margin was up 19% to AUD 39.9 million, and the EBIT margin expanded by 340 basis points to 31.5%. This margin expansion is being driven principally by sales volume, higher home sales prices, and margins and scale leverage. Product segmentation has been a key focus over the past 12 months, and we have recently launched a new sub-AUD 200,000 prototype home at Chambers Pines in Brisbane to significant purchaser interest.
At the other end of the spectrum, we have now sold a few bespoke waterfront homes at Latitude One for in excess of AUD 900,000. New or expansion projects at Sunnylake Shores in New South Wales and Ballarat and Lara in Victoria are all expected to contribute first-time settlements in the current financial year. The chart at the bottom of the page demonstrates the strong year-on-year sales volume growth we have been able to achieve since we entered the development business back in 2014. Ingenia is now clearly the largest developer of new manufactured homes in Australia. Our development joint venture with Sun is outlined on page 22 and is progressing well. Construction of the clubhouse for our first community, Freshwater, just north of Brisbane, is running ahead of schedule and is expected to be open for residents and their families ahead of Christmas.
As announced earlier today, we are now finalizing the acquisition of the 427-home development site at Morisset on the New South Wales Central Coast, and we have exchanged a conditional contract to acquire a 220-home community in the northwest growth corridor of Melbourne. Settlement of this site is subject to receipt of an acceptable DA, which is anticipated in the coming months. On page 26 is an update on market outlook. At this stage, Ingenia is unable to provide guidance due to the considerable uncertainty in our current operating environment. There is a high level of certainty in the rental inflows we receive across our Lifestyle and Gardens businesses. However, the near-term outlook for new home settlements and demand across our Holidays business is far less certain.
Our balance sheet is in an incredibly strong position with current gearing of less than 10% and cash on hand and undrawn debt exceeding AUD 370 million. Our focus over the next 12 months will remain on operational excellence and building upon the great momentum we have reestablished as we move through the current year. However, we also intend to use the current market dislocation caused by COVID as a unique opportunity to establish clear sector leadership, securing additional growth opportunities, and creating compelling long-term security holder value. That's all Scott and I are going to present today, so I'm now delighted to hand over to Q&A. If you have any especially hard questions, please direct them to Nat or Nikki.
Ladies and gentlemen, we will now begin the question and answer session. For those of you listening on the phone, you may register a question by pressing zero one on your telephone keypad and wait for your name to be announced. There may be a slight delay while participants' names are collated. Our first question comes from Michael Peet from Goldman Sachs. Michael, your line is open.
Hi, Simon and team. Congratulations on a strong result given the situation. First question, on next year for 2021, current year, looks like there's probably not going to be too much on the side of settlements. On the joint ventures. Sort of trying to get a feel for mix of wholly owned versus joint ventures. It's only freshwater, is that correct?
That is correct, Michael. It'll only be freshwater, which is up in Burpengary, north of Brisbane, and I'd be anticipating settlements there somewhere in the region of between 25 and 40 homes, depending on market conditions. We'll be breaking ground at Morisset in early 2021 calendar year, but I wouldn't anticipate any settlements until the following financial year.
Yeah. That's what I was thinking, about 22 as well. Just Morisset. Any others? There were a couple of other sites you'd acquired into the JV, but just wanted to get a sense of maybe over the medium term, how that transition's gonna go from wholly owned to joint venture.
Moving into FY 2022, I would anticipate settlements at Sun JV from probably at least four projects. You would have at Freshwater, you would have Fullerton Cove, which is on the northern side of the Hunter River, adjacent to Newcastle. You would have up at Morisset, and the project that I mentioned today, just north of Melbourne in the northwest growth corridor is adjacent to a very large residential development, and all the services are at the door. Not in the current financial year 2021, but in 2022, I would expect that we would ideally have at least four projects contributing settlements.
Okay. Just noting the JobKeeper payment, would we expect any in 21? I guess your Holidays is open again, but still disrupted to some degree, but it's got to be down by that 30%, I guess. From what you know at the moment, would you expect any JobKeeper in 21?
Michael, it's Scott here. Yes, we will. The current program for eligibility runs through to the end of September, so we'll have another three months. We had three months in FY 2020, and there'll be another three months in FY 2021. After that, we would not anticipate being eligible.
Yeah. Understood. Simon, you mentioned some development sites that you've either forgone or sold. Can you just remind us? I know there've been a number that you've been looking to divest. Just wondering if you could just list the ones that you've sold or foregone.
Yeah. Albury and Sun Country in Mulwala. We haven't settled those yet, but they are under contract. We're also divesting Upper Coomera. It's taking too long to work with the Gold Coast City Council there to get an approval, so that's in the process of being sold to a residential developer. There's a couple of projects in Victoria, which we haven't previously named, where we've taken an option over. I think there was also one project sort of in Central Queensland on the coast that we've passed on as well.
Okay. Avina, where does that sit at the moment?
We continue to own the existing holiday and residential community at Avina, and during the course of the FY 2021 year, we exercised an option to acquire the surrounding land adjoining that community, which gives us about 15 hectares of land. We took an impairment on that land through the last six months. That land is currently reflected in our accounts as, I guess, semi-rural land as opposed to being residential land. We do believe, in that part of Sydney, that Avina will, at a point in time, be a highly successful project. There's not one new or proposed manufactured housing community under development or in planning in the entire Sydney Basin. Over the medium to longer term, we do believe that Avina has significant strategic value to the business.
Just finally, 37 settlements is a very strong start to the year, given COVID. I mean, what sort of disruptions are you finding out of the sales, construction, or settlement as a result of COVID, I guess, outside of Victoria?
We have two developments under construction even in Victoria. We're not experiencing any disruption at the moment in any developments across the country, whether they're in Victoria or elsewhere. We're not experiencing any disruptions with supply chain, so we've got great visibility on our building materials. Probably the greatest bottleneck at the moment is just across the broader residential market. There's not huge volumes of homes for sale. For residents to have a liquid market to be able to sell their home and then move into our community, that's probably the greatest challenge for us at the moment. What we're seeing at the moment is the time on market is starting to come in, and I do think we are going to experience a pretty strong spring and summer selling period. We've started the year very strongly.
I think it's very fair to say that through late March into probably late May, there wasn't a lot of activity at our communities from prospective residents. That's really why we started the new financial year with a lesser number of deposits on hand or contracts than we commenced the FY 2020 year 12 months ago. The market's certainly improving and we do think that the year ahead is looking positive. I guess the great unknown is what happens when the JobKeeper allowance eventually finishes off and there's a lot of Australians at the moment on subsidized or not paying any interest or principal on their home loan. How does that play out? Broadly, the underlying fundamentals are attractive and as I noted through my speech, what we're witnessing is a lot of other lifestyle developers, certainly the smaller groups, have suspended development activities.
There's not a huge amount of stock out there on the ground in our space.
Excellent. Thanks, Simon.
Thanks, Michael.
Once again, ladies and gentlemen, if you would like to ask a question, please press zero one on your telephone and wait for your name to be announced. We have no further questions queued at this time.
Thank you very much for your participation today. Scott and myself and Donna will be available over the next few days, and if you do have any additional questions, please feel free to phone them through or email them. Thank you very much.
Thank you, ladies and gentlemen. That does conclude today's conference. Thank you all for attending, and you may disconnect your lines.