Thank you, and good morning, everyone. Thank you for joining and welcome to Winton's annual results call. It's a pleasure to be here today to present you our FY 2023 results. Alongside me today, we have Jean McMahon, who's Winton's Chief Financial Officer. Today I'll start off with a business update, then I'll hand over to Jean for a financial overview and some ESG commentary. Then I will finish up with a few slides on the market and outlook, and as always, we'll be happy to take questions at the end. A quick overview for those that are familiar with Winton.
My wife, Michaela, and I founded Winton in 2009, and the company has now evolved to a New Zealand-based residential developer of scale, with 26 projects across 14 communities and a current land bank of circa 6,400 units. Typically, we buy large parcels of land not currently zoned for residential development but sit adjacent to growth corridors, water and transportation, and that we think have strong prospects for rezoning. A significant part of our value creation is securing this rezoning and the subsequent resource consents on the land that we have acquired to create master-planned communities. We also have two newer business units, being our Northbrook Retirement business and our Ayrburn Hospitality business.
FY 2023 was a record year for delivery and settlements, during which resulted in a post-tax earnings within guidance of NZD 73.8 million and NZD 211.4 million in revenue. This is 32.5% higher compared to FY 2022 and attributable to 565 units having settled. As a result of this top-line growth, we delivered a gross profit of NZD 108.7 million, compared to NZD 72.4 million in FY 2022. We also delivered an improved gross profit margin of 51.4%, compared to 45.4% in FY 2022. Our impact was NZD 64.6 million, 78.6% higher than FY 2022, which then had a pro forma impact of NZD 36.2 million.
We feel that we're in a compelling and enviable position. We still have 0 debt. We have cash holdings of NZD 76.6 million and we have gross presale book as of June 30 of NZD 419.3 million, together with, as we stated, a land bank of circa 6,400 units to remain. It's certainly, it's been a big year at Winton. In our first full year as a listing company, we delivered 116 more units than we did in FY 2022, and that was achieved while navigating what was an extremely wet and disrupted construction season. Our strong presale book continues to protect our future revenues, and as I mentioned on the last slide, it still stands at NZD 419 million as of June 30, 2023.
We also locked in supply contracts to minimize the effects of supply chain and inflation issues, which have served us well. We launched sales for Northbrook Wynyard Quarter, received resource consent for Northbrook Wānaka, Northbrook Wynyard Quarter, and Northbrook Avon Loop projects. We continue to operate on an ungeared basis and benefit from a very strong balance sheet. We commenced leasing activities at the Lakeside Village Centre, and this will go a step further in providing good annuity income to the business. We grew the Winton team to 65 people, and predominantly that is to do with the resourcing of our Northbrook and Ayrburn business units. We also promoted internally to add to the management team, appointing Duncan Elley to General Manager of Project Delivery.
We're have appointed Steven Joyce to the Winton Board, and we're very happy to have his wealth of financial, economic, and strategic experience at the board table with us. We've also completed our first emissions inventory and developed our first sustainability framework. Despite the extremely wet construction season, we delivered 565 units across the year, which resulted in revenue for the year of NZD 211.4 million. Following on from a busy first half of the year, in the second half, we delivered 346 units, completing stage 3D at Lakeside in Te Kauwhata, stages nine to 13 at Beaches in Matarangi, stages three to six at North Ridge in Cessnock, and the stage 16 and duplex townhouses at Northlake.
78% of the revenue for the year came from residential lots, 12% from buildings, and 10% from the completion of apartments. As mentioned, our land bank pipeline has an anticipated yield of about 6,400 units, including circa 900 retirement units. At North Ridge and Cessnock, stages four to six are now complete with 105 lots settled. Three lots have settled since the end of FY 2023, with the remaining 14 completed lots expected to settle by the end of FY 2024. We have a resource consent underway for future stages. Launch Bay in Hobsonville is looking great, and the community is taking shape as more residents moved in. Jimmy's Point progress has been good, with construction of the structure up to level three and level four underway, due for top-out shortly.
Our Ovation apartments and townhouses are now complete, with the remaining few unsold units on the market. Our Launch Bay townhouses and apartments are also now complete. They had suffered some weather-related delays, meaning completion occurred after year-end. However, the pre-sold units have now since settled, and the remaining few units are on the market. At Beaches in Matarangi, stages five to 13 are now complete, with the majority of lots settled before June 30, and eight further settlements have taken place since then. Works are continuing on stages 14 and 15. At Lakeside in Te Kauwhata, 186 units settled in FY 2023, and 78 units within stage three have settled since year-end. We completed the construction of the Village Centre, and at June 30, we had 71% occupancy, with a 30% development margin.
Earthworks and civil works are progressing on the future residential stages at pace. Northlake Wānaka is our most mature community, but there is still a lot going on. In FY 2023, we completed and settled on the 28 duplex townhouses. We completed the Alta Villas show suite and opened that for sales and marketing. The first 15 Alta Villas are nearing completion, and a further 12 are under construction. The Northbrook show suite is nearing completion and will be open, and hopefully accepting sales applications from the start of September. Construction of the Northlake apartments and commercial building are nearing completion. Two of the apartments were unsold at year-end but are now unconditionally sold since then. At River Terrace in Cromwell, all lots are sold and settled. We had built two five-bedroom show homes, one of which still remains unsold.
Construction and on-site works at Ayrburn and Arrowtown in FY 2023 is going well, and stage 1 is expected to complete in the first half of FY 2024. Now to Northbrook. After three years of diligently designing Northbrook to fulfill the luxurious brand positioning that we wanted it to have, and enable some highly efficient construction and operations of the properties, FY 2023 saw us move into construction and pre-sales of those projects. As I mentioned earlier, resource consent was obtained for Northbrook Wynyard Quarter, Northbrook Wānaka, and Northbrook Avon Loop. An amendment is now underway for an existing resource consent at Northbrook Arrowtown, and we are well progressed on another amendment for our existing Launch Bay resource consent. In mid-June, we completed the full-size show apartment and sales display suite at Northbrook Wynyard Quarter, and we launched our pre-sales.
Opening weekend saw hundreds of people through the show apartment, strong interest has continued and translated into strong initial sales. Unconditional sales are now north of NZD 50 million, with a strong pipeline at contract slash deposit stage, looking for contract finalization shortly. Notably, our self-care retirement village units have been selling at an average price equating to NZD 34,000 per square meter, which we believe has achieved an industry benchmark. Our next big milestone is opening the Northbrook Wānaka show suite, that will take place, as I mentioned, at the start of September. This is a good overview of the first five locations, which have a total yield of 902 units, including independent residences, serviced units, and care suites.
The standard terms under which the Northbrook Occupation Right Agreement operates, similar to the, to the independent living and the high-care residences, is a 30% deferred management fee over a four-year period, and a 30% deferred management fee over a two-year period for the care suites. At Sunfield, we continued progressing the 50 hectares of, of the property that are currently zoned future urban. We're doing that with a more traditional master plan, supported by the current regulation and zoning. Meanwhile, we continue to pursue our alternative legislative pathways to remain, to, to rezone the remaining 150 hectares of the Sunfield land, including under the Resource Management Act.
As previously communicated, however, Winton has issued proceedings in the Auckland High Court under the Commerce Act, alleging anti-competitive conduct by the government housing agency, Kāinga Ora. Winton is seeking court declarations that Kāinga Ora's conduct is unlawful and is in breach of the Commerce Act, and an order requiring Kāinga Ora to consider Sunfield for assessment under the UDA, as well as paying substantial damages for Kāinga Ora's conduct to date, which were recently quantified by us in an amended statement of claim. Provisionally assessed amount of damages is NZD 138.5 million plus costs and interest, and this represents Winton's view of the quantum of loss it has suffered due to Kāinga Ora's alleged anti-competitive conduct. This is not a process that we've taken lightly, but we believe their current conduct is fundamentally flawed.
I'll turn now to Jean for the financial overview.
Good morning, everyone, and thank you for joining us. As Chris mentioned, we are very pleased to report our results for FY 2023. It was a record year for delivery and settlements, with 565 units settling, resulting in NZD 211.4 million of revenue, 32.5% higher than FY 2022. Winton net guidance delivering post-tax earnings of NZD 73.8 million, being NPAT, excluding H2 FY 2023 fair value revaluation of investment properties. As a result of top-line growth, Winton delivered gross profit of NZD 108.7 million, and a gross profit margin of 51.4% compared to NZD 72.4 million and 45.4% respectively in FY 2022. This was due to a higher average margin from the product mix settling during FY 2023.
Margins on land lots settlements are typically greater than dwellings and apartments for Winton. Our volume of units will vary from year to year, depending on the number and size of projects under development, the development life cycle of each project, the staging of construction works, the level of pre-sales, and the underlying market. EBITDA increased 88.1% to NZD 95.6 million, compared to NZD 50.8 million pro forma EBITDA in FY 2022. NPAT was NZD 64.6 million, 78.6% higher than FY 2022 pro forma NPAT of NZD 36.2 million. Rental income has increased significantly in the year as a result of the purchase of Cracker Bay and the tenanting of Lakeside Commercial, totaling NZD 3.7 million.
Selling expenses were 12.6% lower than FY 2022 as a function of reduced marketing spend, as cost was focused on completed projects and the Northbrook brand during the year. Administrative expenses were increased due to additional headcount and new litigation in FY 2023. Profit after income tax for the period was NZD 64.6 million, compared to NZD 31.7 million in FY 2022. As at 30 June 2023, cash and cash equivalents were NZD 76.3 million, compared to NZD 204.8 million on 30 June 2022, with the decrease in balance a result of the use of capital raised during the IPO of NZD 350 million for acquisitions, developments, and expansion.
Winton's strategy to develop our five Northbrook Retirement Villages and the long-term hold of our Lakeside and Ayrburn commercial precinct are reflected in the growth of investment properties and property plant and equipment when compared to the prior year. During FY 2023, the acquisition of land and investment properties consisted of Sunfield, Cracker Bay, Northbrook Wynyard Quarter, and The Villard. Receipts from customers were strong, reflecting the record units settled. We did experience some defaults at just two of our communities. At Beaches, we had four lots default, which included the one lot previously reported as at 31 December 2022. At North Ridge, we have had 12 lots default. Of these 12 lots, we have already resold four lots, realizing on average 16% more than the original sales price, including the recovery of the deposit. We are expecting to resell and settle the other eight lots during FY 2024.
The defaults experienced account for circa 2% of our forecasted FY 2023 settlement profile. The board declared a dividend of NZD 0.0216 per share for the six months ending 30 June 2023. This dividend will be paid on 14th September. This is in addition to the NZD 0.0206 per share dividend that was declared and paid for the first half of FY 2023, bringing the total dividend for the year to NZD 0.0422 per share, reflecting 20% of distributable earnings. The dividend is in line with, with our dividend policy, updated in February 2023, to exclude any unrealized valuation movements in investment properties and within a payout ratio of approximately 20%-40% of full-year distributable earnings. Dividends are declared at the board's discretion and are dependent on the company's financial performance.
Winton is on a sustainability journey and is focused on delivering significant milestones over the next two to three years, driven by the sustainability framework recently adopted by the senior management team and endorsed by Winton's board of directors. The three pillars of our sustainability framework are thriving planet, thriving people, and sustainable future. They are naturally interrelated and integrated into our business strategy. Every pillar is about mitigating potential negative impacts on or from our operations and delivering positive outcomes by creating thriving and resilient communities. The annual report goes into detail about the framework and Winton's FY 2023 impact. Some highlights include: we completed our first emissions inventory. We planted approximately 35,000 trees and plants throughout Winton's neighborhoods in FY 2023, but have planted over 238,000 trees and plants to date.
We completed the health and safety review and implemented a master health and safety system. We submitted the design for Winton's first Homestar 6 building, Northbrook Wynyard Quarter. We contributed 565 units towards New Zealand's housing supply. We supported local businesses where practical, with 93% of our on-site works for our top 20 contractors completed by local businesses. We paid NZD 11.7 million in development contributions towards improving infrastructure and long-term growth of the regions that Winton operates in, and we persisted with the car-less and solar-powered Sunfield neighborhood under the UDA pathway. During FY 2024, we will implement the new sustainability framework and as such, meet regulatory requirements, mitigate risk, and deliver further positive impacts. Climate-related disclosures are front of mind for Winton as we work towards our first mandatory disclosures for FY 2024.
Scope 3 emissions, emission reduction targets, and an emission reduction plan are all in the pipeline. We will also introduce policies and/or processes to support the sustainability framework and use our scale to deliver more positive outcomes. I will now hand over to Chris.
Thanks, Jean. I think the New Zealand housing market has certainly faced some headwinds over the last 18 months or so. However, as we head into FY 2024, there are strong indicators that the market is near to or at the bottom. The supply chain issues in the industry have cleared, and the ongoing cost increases in building supplies have certainly stopped. We do continue to see strain within the industry, with an 85% increase in construction industry insolvencies in FY 2023 as compared to FY 2022. We feel there will likely be more, particularly where some of those businesses are highly leveraged. We believe some homeowners will continue to struggle in the near term with higher interest rates and higher inflation.
However, increasing immigration to New Zealand, constrained land supply, and upward sentiment of rental prices will put compounding pressure on the already short housing supply. We continue to operate with financial discipline, both on our land acquisitions and sales, to enable us to thrive through the cycle and use it to our advantage as we build prominence in the New Zealand property industry. In the current economic turbulence, Winton is a financially stable, experienced, and trusted developer, delivering reliable, high-quality product. For all those reasons, builders want to work for us and price their work accordingly. Our FY 2023 results were the outcome of a number of years of development, and due to its completion timing, a standout year for settlements and revenue recognition.
Looking ahead to FY 2024 and the timing of completed units, and the type of completed units, means that revenue will likely be lower than FY 2023. Going forward, we will naturally keep the market informed of our plans and progress with our business, but do not expect to provide formal guidance to enable us to better focus on operating the business for maximum long-term shareholder value. That brings our presentation to an end, and I'm very happy to move to any questions anyone may have.
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 are on speakerphone, please pick up the handset to ask your question. Please limit your questions to two per person. If you wish to ask further questions, please rejoin the queue. Your first question comes from Nicholas Hill of Craigs Investment Partners. Please go ahead.
Hi there, congratulations on the results, and it's great to see your balance sheet in the shape it is. I'm just wondering, you've commented that there are indicators we're either near or at the bottom of the housing downturn. How have sales gone over the second half of FY 2023 in places such as Wānaka, Cessnock, and Matarangi?
Yeah, we haven't had much stock in the market, Nick. The Cessnock resales, we had a few come back to us, and we resold those quite successfully. In Matarangi, we haven't really got any stock in the market that's complete, and the couple of parties that didn't make their settlement deadlines, we're working with them, and we're pretty confident they will get across the line in, in due course.
Okay, thanks. In terms of the sales at the Wynyard Quarter, Northbrook, what kind of units have been sold? Is this sort of like the penthouses at the top, or are they sort of like units facing the ocean?
It's across the board, fair to say, and, yeah, we're, we're pleased with the outcome today.
Okay, thanks.
The next question comes from Rohan Koreman-Smit of Forsyth Barr. Please go ahead.
Morning, Chris and Jean. Congratulations on a solid end to the year. I just had a few questions, and I might make them quite long, so I can fit it in the two-question cap. If you look at the pre-sales that are coming in, or pre-sales cover for 24, can you just give us an indication of that? Then, I guess, coupled with that is how or can you give us an indication of second half kind of booked pre-sales in terms of, I guess, net here, when you take the defaults out, you know, the dollar value of the defaults offset by the dollar value of any other sales you got, and then obviously less, the, I guess, the settlement of those pre-sales.
Just trying to, you know, bridge the book- to- bill, and, and then look back forward kind of one year, to, to inform, my model.
Hey, Rohan. Yeah, I'm happy to comment on the pre-sale. In the investor presentation on page 33, we have a summary across each community of where the pre-sales are sitting. You can make an assumption that those pre-sales will be the, the first sales that are recognized in the future years. That kind of gives you a pointer there.
Perfect. Maybe we'll take the second one about the book, the bridging the presales book offline. Then just swinging back to Northbrook, like NZD 50 million is a very solid start. Can you just give us an idea of the terms on these sales? You know, what kind of security is there? Is there any deposits paid into trust accounts? And I'm guessing it's not included in the NZD 420 million of other presales that you've currently reported.
No, that's correct. The nature of the sales are, are that we have taken both minimum 5% deposits and personal guarantees. Across the board, we haven't varied in terms of our ORA terms. We haven't varied from our 30% over 4 years.
Perfect. Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Nicholas Hill of Craigs Investment Partners. Please go ahead.
Your countercyclical development income. Have you started to see any more investment opportunities come to your required return rates?
I think it's fair to say, Nick, we've, we've never had so much stuff presented to us in terms of, of acquisition opportunities than what we have in the last few weeks. Yet we're still waiting. I think I made a comment earlier, we're going to be extremely disciplined about how we acquire land. We still haven't seen things come to the price that we're prepared to pay a-as yet, but we do feel as if there are some distressed opportunities which are heading toward that point.
That's great. I guess, how would you describe the quality of these sort of investment opportunities coming your way? Is it the case where there is a lot that could provide an attractive return, but the actual development is a bit messy, such as consents aren't in place, the builders are going bust, or the actual quality of the build is less than desired?
Well, I'll start by saying we love messy, so messy is good. Normally messy means you're buying it at a, at a better price. We are seeing messy, but we're not seeing the combination of, of, of messy, whether it be on a consenting or delivery measure, correspond to the price that we want to pay for the mess.
Okay, thanks.
The next question comes from Rohan Koreman-Smit of Forsyth Barr. Please go ahead.
Hi, Chris. again, just on, costs for construction. You know, you've been waiting to tender Northbrook, and you've been talking about construction costs coming back. Can you give us, just give us an indication, I guess, of what you have been seeing in the last few weeks, and I guess how it compares to what you were talking to at, the Investor Day, and your expectation for, construction costs, declines, you know, kind of over the next six to 12 months?
Yeah. Thanks, Rohan. We are seeing costs coming down. We're seeing, civil costs come down in the order of 10%-15%. We're not in the market as yet, because we're just waiting a bit to take full advantage, but we are hoping to see a similar decline in vertical build costs. Anecdotally, that the, the inquiry we're getting from subcontractors and so on, would indicate that we're, we're hopefully on, on track there to see those prices come back to where we think it, it needs to be or should be.
Perfect. That was all for me.
There are no further questions at this time. I'll now hand back to Chris Meehan for closing remarks.
Thank you everyone for joining the call, and, and thank you everyone for your ongoing support and, we look forward to reporting in after the next half's results early next year. Thank you very much for your time.