Thank you for standing by, and welcome to the Lifestyle Communities LIC half year results teleconference. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the Star key followed by the number one on your telephone keypad. I will now hand over the conference to Mr. James Kelly, Managing Director. Please go ahead.
Thank you, and also thank you for joining us on this call to hear about the half year results for Lifestyle Communities. We always appreciate that. Firstly, Darren and I just feel so proud of our team in being able to deliver such a great set of results considering the trading conditions that we experienced in the first half of this financial year. When you think about it, Melbourne was actually locked down for nearly four of the six months of the half, and yet we still managed to deliver 168 new sales, 73 resales and 166 settlements. We have 258 new home settlements in the bag going into the second half, and the strong inquiry that we experienced leading up to Christmas has set us up really well for new sales this year.
Over this time, both the marketing sales teams used a lot of muscle memory from the past five lockdowns. We're getting pretty practiced at it in Melbourne, and to ensure that we continue to drive inquiries and sales albeit at a slightly reduced level. At the same time, the projects team were able to work with Top Gun Homes, who's our single builder, to ensure that we had minimal disruption to our supply chains, which enabled us to continue to sell homes as per program. This continues to back Lifestyle's strategy of building relationships with one or two key suppliers across all our activities. We also continue to pay them on a seven-day payment cycle. To be able to lean into this relationship, we need to ensure that we get preferential treatment on key supply chain issues.
What I'm most proud about is the team that through these tough times we've been able to keep reimagining the business across all facets of what we do. This ability to maintain our curiosity and to challenge the status quo has meant that we can keep exceeding customer expectations on what we offer, as well as drive sales and settlements. Just to call out a few of these from a very long list, the marketing team, or what I call our disruptors, have started to subtly reposition our brand so that better engages with what they want, and also the aspirations of the baby boomer, and use the tone of voice and a quirk that not only differentiates us, but also positions us with a younger customer that we are starting to meet more of.
We also launched a new website and digital strategy that's increased both the number and quality of digital leads as well as conversions. Our sales team has not only been looking at our customer touch points to increase engagement, but has also reimagined how we launch and drive sales in new projects. This can be very much seen through the way the Merrifield project has performed, and we're further evolving this strategy as we look at the five project launches that we have coming over the next 18 months. It's a really exciting change to the way we're thinking and it's certainly bearing significant dividends, which is great. Our projects team has continued to reimagine both the style and configuration of our homes as well as our clubhouses and facilities.
What we're proposing to build at Meridian, Woodlea, Cowes and beyond takes our offer to another level, particularly with a new range of housing product that we haven't built before. Also, the work that we continue to do with our electrical microgrids at our new projects continues, and we're also really excited by what new technologies may bring to further reduce the cost of power that we can pass on to our homeowners. Our home experience team worked really hard through the last lockdown, number six, and continued to provide great service to our homeowners, as well as maintain our communities to their normal high standards. We also continued with the refurbishment program for our older communities, which is part of a 30-year plan that we've mapped out to ensure that they present, as always, to the highest standard.
We also launched Project Blue Sky, which is reimagining many of our homeowner touch points in the lived experience, as well as bringing some new initiatives to further enhance a homeowner's experience of living in a community. This is a really exciting initiative and something I'm looking forward to seeing really evolve over the next three to six months. Finally, we've successfully implemented an SAP across the business. This went live on the first of January. Darren and his team did a fantastic job of bringing that into place at a pretty short timeframe, and that's really gonna enhance the back-end systems in the business. We're also implementing a Salesforce system that will also go live in this half.
This is a really cutting-edge version that will not only supercharge our CRM system, but also introduce a one-stop shop homeowner portal to enhance the homeowner experience, as well as increase the ease of living in a Lifestyle community. This has all been achieved by the extraordinary customer-centric team at Lifestyle that we have organically grown and nurtured over a very long period of time. More and more, we recruit for culture and train for skill, and this is also paying dividends in both customer service delivery and driving referrals. If you watch our story video on the website, it's an ode to the baby boomer, which is our customer.
The last line of this video, and you must watch it, is actually the baby boomers' war cry, which is, "We are the generation of change, and we ain't done yet." I feel very much the same about Lifestyle, in that we've just got so much more to do and so much more opportunity and, so many emerging opportunities. It just makes me look so forward to a fantastic year ahead. Without further ado, I'd love to pass over to Darren now to take us through, some more financials about this half year result. Thanks, Darren.
Thanks, James. I echo your excitement about the next 12 months. It's a great time for business, lots of good things going on, and great to be back out there face-to-face meeting with customers again and looking forward to a big year ahead. On the P&L, we had continued growth in the portfolio, which was a primary driver of our results with 166 settlements in this period compared to 88 in the prior year. Obviously, both periods are affected by lockdown, but it just shows the different approach as COVID has become more normalized, and we've learned how to sort of adapt the business to deal with it. The increased portfolio flowed through to higher operating results, particularly in the community operations, and also we're seeing an increasing number of resales attracting a deferred management fee.
That's primarily due to the size of the portfolio and also an increasing number of communities that are now open and trading and have homes available for sale. As you mentioned, we did see some inflationary pressures in the construction industry, particularly around timber and steel. We had a very strong property market, particularly in Victoria at the moment. We're able to manage the cost of those increases. In many cases, because we're pricing our homes on a cash cost recovery model, our homes have actually become relatively cheaper to the median house price, which is a great outcome and should drive strong sales in the future. We were pleased to see an increase in the deferred management fee come through, driven by those high number of resales.
We're also pleased to see our homeowners achieving strong house price growth, yeah, in the resale market. Corporate overheads have increased. There's two main drivers of this. One was increased insurance premiums, particularly in the D&O market as our market cap has increased. We've seen an increase in the accounting cost of the employee share scheme, primarily driven by some share price growth and also some tweaks to the structure of that scheme going forward. We expect the overhead cost to stabilize in the second half, if not come down slightly. On the balance sheet, we made some deliberate decisions to increase our stock levels during the lockdown, and this sort of had three main benefits. It enabled us to have finished homes ready to sell when the lockdown period end.
It assisted us to manage some of the supply chain challenges and place forward orders in advance, which allowed us to manage some of those blips in the supply chain. It kept all of our trades engaged, which was a really key part of managing the business during those difficult lockdown months. This saw us well-placed to service customers as we emerged from the lockdown with homes ready to sell, and importantly, certainty around availability dates when the homes would be finished, which is something that's really important to our customers. We settled on a number of land parcels during the period, which were already in the pipeline, as well as completing an opportunistic purchase of the site at Phillip Island, which we're really excited about.
It was a site that came to us at short notice, and we were able to complete quickly. Having the headroom available in our debt facility to complete that transaction meant we were able to secure that site at short notice. We're very excited to bring that lifestyle community to life at a very iconic location in Victoria. Both the increased inventory levels and those land settlements and the addition of the Phillip Island site pushed our debt levels higher, and obviously led to an increase in gearing. We should see this stabilize over the next six months. We finalized the extension of our debt facility in August, and once again like to thank our lenders, the NAB, HSBC and CBA for their continued support.
The existing facility sees us well funded to continue our development pipeline and look for future land acquisitions, which is exciting. On the cash flow, you can see the increased inventory levels and land settlements flowing through. I'd encourage everyone to look at slide 28 of our investor presentation, which has a breakdown of the cash flows by property. Now that we're through the peak construction phase of a number of projects, we should see operating cash flow turn positive over the next six months. Finally, I'd just like to put in a shameless plug for my team, who have worked enormously hard over the last six months to implement this new system.
We're very excited to embed the SAP system into the business, and it'll be a core plank of our digital transformation and an important step to support the business as we continue to grow. Thanks, James.
Fantastic. Thanks, Darren. I think one of the most exciting slides in the pack is the sales slide that shows how sales have gone from the get-go of each project. It's just so good to see projects like Meridian, St. Leonards, Merrifield all performing so well and coming out of the blocks like they are. Love the verticality of some of those lines, which is really exciting. Deanside. Alright, they've been probably the most COVID impacted due to their location in the north of Melbourne. It's really exciting now to start to see those come back together as the sort of COVID cloud starts to lift, which is great.
Without further ado, we'd love now to pass to any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on speakerphone, please pick up the handset to ask your question. Your first question comes from Ben Bressington from Barrenjoey. Please go ahead.
Okay. Thank you.
Hi James and Dan. I was wondering if you could discuss the overall trajectory of the gearing ratio just over the next six months. You mentioned it was, you know, expected to stabilize. I'd just be interested in any color or visibility you could provide on the underlying key drivers in relation to, say, working capital, you know, the overall, I suppose, capital requirements of higher production. When the cash flow comes in, how does that all interplay with the amount of debt that you have outstanding?
Good question, Ben. Thanks for dialing in. Yeah, we've definitely seen the gearing push higher than traditional levels. We are sort of through a peak construction period, parti cularly at Mt. Atkinson or Tarneit. We now see those projects sort of move into their cash recovery phase. Subject to settlements, obviously, given we're a capital recycling business, we should see those projects move into sort of a cash recovery mode over the next little while. With the Phillip Island site, it's a little unusual for us. Typically, we like to, you know, put a deposit down on at least 12 months terms while we get all the planning done. That site was a unique opportunity, and it was a sort of buy now or miss it opportunity.
that sort of gave us the impetus to sort of soak up that site, and that did push the gearing a little bit higher. as settlements come through over the second half, as I said earlier, we're expecting that gearing to stabilize a little bit and hold at those levels.
Okay. Is it your objective to manage the gearing down from 40%? Or do you see 40% as essentially where the vehicle will be as you continue to ramp up production into the higher settlement activity?
It'll move around a little bit, to be honest, Ben, with settlements. Obviously, we're a capital recycling business model and depending on project stages and settlements. Certainly we won't be pushing it substantially higher than where it is now, but it may come down a little bit at times and push up a little bit at times. Largely we see it sort of sitting around those levels.
Great. Thank you. You mentioned, I think you made the comment, Darren, that the presale price had, you know, declined relative to the local median house price. There was a, you know, a real value proposition emerging in some of the active projects that you have now. Where do you currently sit in terms of those sites that are in presales and the relationship to median house price?
Yeah. Typically when we buy a site, we look to be around that 75%-80% of the median house price. We have seen that push down towards the 70% and in some cases, St. Leonards as an example, we're in the high 60s% at the moment. Because we don't chase house prices up with the market, we're happy with our pricing model sitting where it sits. As we become relatively cheaper, that drives the speed of sales and delivers a really good value proposition for the customer.
That's the model we've employed since day dot, and we're sort of holding true to those principles, resisting the urge to raise prices with the market, price them low and watch them go, and that should really drive speed and allow us to get through these projects quickly.
It should also, Ben, it really leans into referral because our customers, you know, once we return to and the market then sets the pricing rather than we set the pricing, our customers see big uplifts on when homes are resold. It really helps drive referral around, you know, wow, you know, there really is a value proposition at Lifestyle.
Great. Thank you. Just a couple other questions, if I may. James, you mentioned earlier, you touched on the suppliers and the relationships you have. Could you just talk through what are the implications of higher construction costs for LICs or active projects? What are you seeing insofar as construction cost inflation come through? Secondly, do you have the ability to pass on all of the higher construction costs in the end values?
Yeah, absolutely. We basically run a quarterly project control group program on each project, and one of the leadership team chairs that. Really the purpose of that is to look at where a project is currently tracking, both you know, cost-wise and sales-wise, and then make any adjustments that we need to ensure that we meet our target of making no cash profit. It sounds always strange when you say it. Yeah, we do. If we're seeing increased costs coming through construction, all we do is just you know, we basically put our sales prices up about 1% a quarter. At the moment, that 1% a quarter is pretty much handling any cost increases.
We've always actually put our projects up at better rates. It does help sales by putting price up slightly so people feel get FOMO a little bit and they want to make a decision more quickly. That's been pretty much accommodating the cost increases we have seen come through. On the supply chain, we do get really good preferential treatments through Top Gun Homes because we do large volumes with one builder. I know their suppliers cut their customer base down from some enormous number just to four companies only, and they're the ones that always paid them, the ones that always can guarantee work. We lean into those relationships pretty heavily.
how confident are you just in terms of continuity of supply, you know, building materials and/or labor over the next six to 12 months, just in the context of some of the, I suppose, the bottlenecks that we're seeing, you know, in the industry?
Look, yeah, certainly, you know, all access to Top Gun Homes was giving us no cause for concern. I think you're gonna start seeing the construction industry start to come off a little bit in Victoria as you know, the heat comes off after the you know, the HomeBuilder grant. Yeah, there's certainly no cause. Our labor supply is never an issue because we sort of effectively we build on site like a manufacturing business. Top Gun Homes can keep his trades on site. It's a pretty good deal for the trades because they get paid on a piece rate. If they put a frame up, they get AUD 1,200, and then it just moves next house, they get AUD 1,200. Next house they get AUD 1,200.
They don't have to drive all around Melbourne for work. They just go to one site, get paid, go home. We've sort of avoided a lot of the big price rises around. You know, we don't do brick. You know brick, the brickies are one of the worst, you know, movers when there's supply and demand and for labor costs. We do avoid some of the more tricky trades. We don't have concreters, which are another one that shifts quite dramatically when there's a lot of work around. Yeah. Todd, you know, obviously works with those trades pretty closely. It's kind of in return for, you know, sort of guaranteed work, you know, they sort of don't push too hard.
On the labor side, that's never really been a concern for us, Ben. On the supply side, we've been in price since probably haven't been as bad off as some, but we've had to pass some of that through in sale price increases. Again, when our percentages are so far below the median, we're not concerned about passing those through because we've still got an incredibly affordable product.
Thanks, James.
Thank you. Your next question comes from Andrew MacFarlane from Jarden Australia. Please go ahead.
Hi, guys. Thanks for your time. Just a couple questions from me. Just in terms of Tyabb. Just saw it's been removed from the pack. I missed the detail on the back, obviously being the VCAT. Is that now a case of that project is not one you're taking some costs on, but not one that you're able to acquire in the end?
Darren, yeah, that's correct, Andy. We only ever had that on option. It was always, you know, that was 100% subject to getting a planning permit, and it was a walk away deal. It was definitely worth running because we've had two other communities built on low-density res land around Melbourne. This one, it just didn't go our way at VCAT, which is unfortunate. Yeah, we've walked away, but pretty much replaced it with Cowes pretty much straight away. It didn't disrupt, you know, our forward pipeline.
Understood. I guess settlement target is how I guess you can hear that you've obviously reiterated the target for 1,100-1,300 in three years. Any change to the thinking there or how should we be thinking about that?
No, we're still definitely reconfirming our 1,100-1,300 target. Yeah.
All right. Thanks. Just one last one from me. Just in terms of referrals, I know you've typically or you have in the past sort of put out the number that you have been receiving has been, I think, around the 42%. How is it sort of tracking at the moment for the business?
On the way up. Most of our referral comes from the lived experience. You know, we run amazing homeowner events. We do autumn sports carnivals. We do an amazing winter event, you know, Lifestyle Has Talent or art shows, blah, blah. We do a big spring carnival, sporting carnival in the community where, you know, we have over 1,000 people participate sometimes. We haven't run any of that. It's actually knocked our referral back a bit. You know, old communities, the referral on resale is actually really high. You know, we're talking 65% in some cases. It's just on the newer communities.
Plus, we've got this, you know, depends a bit where you're building, like Deanside's on its own, so there's not many other referring communities to it. We kind of mix match where, you know, if we do everything in the southeast every day, we'd have much higher referral because we've got a lot of other referring communities. It's a bit also influenced by where we're building. I think, you know, when, you know, we're back driving home experience and doing all the things that we normally do in a community, we'll see that lift up again. It used to be about 50-55%. It's dropped a bit over the last two years with not only the location of our projects, but also just with this whole COVID cloud.
Yeah, hopefully we'll see that, we're already starting to see that increase.
Great. Thank you, James.
Thank you. Your next question comes from Nick Maclean from Surrey Asset Management. Please go ahead.
Hi. G'day, guys. First, thanks for your answer on the DMF income. Given your ongoing growth and particularly where you've started, that DMF income is going to build up quite nicely. Where do you think that would be in 10 years, first, and I know it's a bit of a hypothetical, but where do you think that will be as a percentage of total revenue in 10 years?
That's a really tricky question to answer. It's funny, I'm laughing because the DMF is just the hardest number to predict. I mean, ultimately, there's so many moving parts there. I think without being too flippant about it, you know, natural growth of the portfolio, I would say it would be substantially higher than what it is today. In terms of putting a specific number on it, to be honest, I can't really put an answer on that.
Sorry. I didn't want specifics, but obviously it's going to grow, right? It's gonna be.
Oh, 100%. Yeah.
The interesting thing, Nick, the other interesting thing we're starting to see post-COVID is, you know, we're seeing active communities becoming a bit more of a stepping stone rather than final destination. People, you know, who have downsized are looking to downsize again to create more equity to tick off the bucket list that they might have been robbed two years of achieving. Yeah, it's an interesting time. 50% of our homeowners move out for non-health or death reasons. We're seeing that in, you know, very much pushing more now towards people downsizing to create more equity. Yeah, I think it's just an interesting guarantee. It's the hardest thing to predict, but it will definitely be substantially more than what it is today. That's a fact. Yeah.
Without making light of the situation, it wasn't COVID driven.
No, that's right. It's interesting, Nick Maclean, we track the reasons for moving out every time, and it's been for the last little while since I've been monitoring, it's been pretty consistent. We sort of get 50% move out for health or death reasons and 50% move out for non-health or death reasons. And then when you drill into the non-health or death reasons, there's a myriad within that. You know, we're still relatively small in terms of the overall number of resales in the history of the business, but we do track that data, and we will continue to look at it as it moves over time. Certainly nothing driven by COVID.
No, no, not at all. No, no, definitely not.
Okay. One more again on the sort of on supply. If you could wave a magic wand, how many sites are out there that you could buy at a good price? Well, obviously, a magic wand. Yeah.
We've been doing this for 19 years now, and there's always sites out there that we can buy. You know, Melbourne grows on multiple corridors. We're geared to buy two or three sites a year. Of the 25 sites we've bought, only two have been bought on market, 23 off market. Yeah, we're always got sites in our sights. You know, in a gun barrel in terms of what we're looking at. Yeah, we never really have to wave the magic wand because there's land always there when we need it.
Okay. Thanks very much, guys. Cheers.
Thanks, Nick.
Thanks, Nick.
Thank you. Your next question comes from Aaron Muller from Canaccord Genuity. Please go ahead.
Hey, guys. You hear me okay?
Yeah. Hi, Alan.
Well, just following up on Nick's question at the end there. I'm interested just to get your view, James, just on Mirvac announcing they're moving into land lease communities and how that might sort of impact your ability to buy land.
Mirvac's got a pretty large land bank themselves, so they're not, you know, necessarily talking about buying land from what I could read or understand. Yeah, it's just another competitor which we welcome, you know, if they can help us market to disrupt the 93% who don't currently downsize. Happy days. They're a really good operator. I really rate Mirvac. I think they've got a really good culture and a really good sort of customer centricity. I think they'll bring value to the industry in Victoria, which is great.
Mm-hmm. Yeah. Okay. That's good. Just on home sales, you've obviously come into this half with that 252 homes sold awaiting settlement. Could you maybe comment on the number of those settlements that have been booked and also, you know, by the thirtieth of June, how many homes do you think would be available for sale from a construction standpoint?
Yeah, we don't normally disclose-
Available for settlement, I should say.
Yeah. We don't normally disclose the bookings, Aaron, but ultimately we're just sort of working our way through our process as we normally do. Homeowners choose the booking date. We don't sort of try and wedge them into financial years or incentivize them in any way. Really where we sort of work through the process is try and create a bit of FOMO about, you know, you've made the decision to move into lifestyle, just get on with it. You know, we bring people into the facilities with access to clubhouses and sporting facilities, et cetera, as soon as they pay their deposit. That's a way of sort of embedding them into the community as early as possible. Then we just work them through their sale process so people get their home on the market.
They've got quite a wide window to settle. You know, it's right that not all of those 252 pre-sales will settle within the year, but that's the same as any other year really. We don't have any problems with delivery of homes. As I mentioned earlier, the sort of decision to build ahead of the curve a little bit has meant that we've been able to give homeowners great certainty about when their homes will be finished and available to settle. Really, we're just kind of in the hands of the homeowners, to be honest, as to when they wanna move in.
Yeah. Okay. Well, thanks for that. Then just my last question, just on resales. Obviously, the first half was really strong. How's the second half shaping up? Maybe comment on how many homes, resale homes have been sold awaiting settlement or how many are on the market at the moment?
Yeah, the resales have been going really well. We've seen the ready-to-move market come back quite strongly out of lockdown, and we saw it a little bit last year, similar theme. It's. You know, with the finished communities, you know, it's very easy to see what you're getting. It's a finished product. The gardens are much more mature, so it's quite a different offering to some of the new developments, and we've seen demand quite strong. You know, as it stands today, we've only got 22 homes on the market, which is, in my time, that's as low as it's ever been. We're selling through the stock as quick as we can. In terms of the number for the second half, you know, it really does depend on the amount of homes we've got available to settle. Yeah.
We're not expecting a, you know, a similar sort of uplift from this half to the second half. We think the number will be pretty consistent half on half.
Yeah. Okay. Great. Thanks, Darren. Thanks, James.
Thanks, Aaron.
Thank you. Your next question comes from Scott Hudson from MST. Please go ahead.
Yeah, good afternoon, gents. Just a couple of quick ones from me. Firstly, on the, I guess, the rental number, is that a, it seems to sort of grow maybe a little bit higher than the 3.5%. Is that a mixed benefit coming through from a rental revenue perspective?
It's to do with the clubhouse opening, Scott. We had four clubhouses open in the last financial year. We don't charge rent until the clubhouse is open. What we get in the year following is that sort of annualizes through once we tick the rent off. In terms of the rent increase, we put through a 3.5% increase on the first of July, and that's the only sort of change that we made other than the clubhouses.
In terms of, I guess, the communities coming online, is there any mixed benefit that will likely flow through? Or should we just be sort of thinking that 3.5% increase in rental income is-
Yeah. We've got the St Leonard's clubhouse is due to open in March, so that will kick the rent off at that community. And then, other than that, it'll just be the next rental increase, which is due on the first of July.
Okay, thanks. Just in relation to the corporate costs, obviously a 35% uplift in support office costs. You mentioned the sort of leave entitlement issue in relation to the first half. Is that expected to unwind in the second half?
Yeah. We're certainly encouraging all our team to take some leave. Obviously, in a small team, we need to manage that closely so that we don't have whole swathes of the business out. Plenty of people in the team have been locked up who are looking forward to getting out there again. Even James and myself are pretty keen to have a holiday in the next few months. Yeah, we've definitely got a program to work that through.
Any sort of, guidance or insight as to the quantum of that leave entitlement?
I think that, you know, the provision for us runs all told at about AUD 2 million for leave balances, but that includes long service leave provision. The annual leave provision is roughly half of that. We are, I guess, inflated relative to our typical running levels and our normal budgetary stuff. In terms of actual leave balances and people having enormous holdings, that just isn't the case. We've generally encouraged people to take leave pretty regularly, and we sort of have an informal process where we don't like people to get more than sort of six weeks' leave balances. Yeah, it's slightly higher than it typically would run, but it's certainly not at the levels where we're stressing about it.
Part of the issue, Scott, was during the lockdown, it was pretty hard to take leave. You know, it's been hard to get people to actually want to take leave when you can't go anywhere. That's what we're seeing, the upsurge in this half. Yeah. You can actually go somewhere.
Understandably.
Yeah.
I guess just on uplifts in the employee share scheme costs, I mean, in terms of thinking about it for the full year, is that just sort of annualize that AUD 1.5 million? Is that how we should be thinking about it?
Well, it's an interesting one, Scott, because it does depend a little bit on where we land with targets and things like that. Our scheme is a tiered scheme. It's hard to sort of say at this point, but you know, we would love for it to go up primarily because it means we've done really well. That's what I'm hoping for.
Okay. In terms of the digital transformation costs, does that all get done this half?
Correct. Yeah. The majority of the costs will be spent before 30 June. There might be a little bit of, you know, tweaks and twists after that, but certainly the substantive stuff will be in this half. As we'd flagged at the August results, it'll be about AUD 1.5 million total for the year, which will pick up the website plus SAP plus Salesforce.
Are there any cost benefits once that system or once those systems are in place?
No. There's sort of productivity benefits, and we're certainly looking forward to an improved customer experience as well as improved tools for the team. It's more an investment in delivering the level of customer experience and employee experience that we wanna deliver rather than necessarily a cost benefit. We sort of have grown up with some systems for quite a while now, which are you know, were right sized for the business when they were implemented many years ago, but we've sort of outgrown those now. It will actually be a bit of a cost increase going forward, but we think it's the right one to deliver the level of service and employee experience that we wanna deliver.
Thanks. Just a last one. You called out that,
Development expenses were higher due to, I guess, some marketing events getting paused during the period. Can you just sort of talk me through the-
Oh, that was a reference to the prior period. In the same period last year, we were in the depths of hard lockdown, so we paused a lot of our marketing events. The comparative looks like it's gone up a lot, but really we just kinda got back to normal.
Great. Appreciate it. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. Your next question comes from Michael Peet from Goldman Sachs. Please go ahead.
Oh, hi, James and Darren. Congratulations on a great result in tough times.
Thanks, Michael.
Thanks, Michael.
Just first one. James, I've been juggling two calls, so apologies if you've commented already on this, but I heard you mention you're aiming to a younger customer. Could you just comment on the mix you're seeing between couples and singles, working versus retired, maybe versus what you saw a couple years ago?
Yes. Just in at our newer communities, we are starting to see more people working full-time, part-time, and we are seeing younger people come into community. That's quite exciting for us 'cause it really opens up the addressable market for us. We're also sort of seeing that as a very viable housing option, you know, for people sort of working. We've promoted the sort of home office opportunity and the work from home sort of space as well and sort of leaned into that with some new product ideas as well in the housing product. It's not a landslide yet, but it's an early trickle sort of going this is sort of spelling something about the future.
You know, our marketing and tone of voice, you know, does lean into that a bit. It's got a sort of slightly more youthful voice, and we've sort of changed the positioning of Lifestyle slightly. It used to be sort of empowering possibilities. We're now more around championing change. It might not sound significant, but in the nuance, it does actually make us think a bit differently about how we talk to the market. Yeah, watch this space around that. I think we just launched a guy called Murray Condo, who's a takeoff of Marie Kondo. Murray's gonna do some heavy lifting around this space for us, particularly with people still working.
Just a question on resales. Could you comment maybe on days on market? I mean, has that come in markedly on your resales?
Yeah, absolutely. Yeah. We're, you know, finding anything we used to sell. Yeah. It's the shortest I've ever seen it in my experience. Yeah. Without a doubt. Yeah, it's quite exciting, actually. I've gotta say. Anything we list, we sell.
Final one from me, I think, following on from Nick McLean's question earlier just about land, just sort of more shorter term, what's the sort of availability or the pipeline looking like? And should we expect a land acquisition or two in the second half?
Well, Chris, every time he buys a site, he gets like. He's bought three in the last six months, and then he buys one. We give him about a week, Darren and I, and then we go, "Okay, Chris, where's the next one?" He goes, "Oh, for goodness sakes." Working on some really interesting ones at the moment and all long-term ones that we've worked on. Watch this space. It's interesting.
Chris has done a good job sort of filling up the forward pipeline, Michael, so we don't really feel under any pressure to buy right now in terms of delivering what we need to deliver over the next little while. We do have capacity to buy. Yeah, it's a nice spot to be in.
Excellent. Thank you very much.
Thanks, Michael.
There are no further questions at this time. I'll now hand back to Mr. Kelly for closing remarks.
Just again to thank everyone for joining the call. We really appreciate it and looking forward to catching up with many of you on the roadshow. Thanks again for joining us.
That does conclude our conference for today. Thank you for participating. You may now disconnect.