I would now like to hand the conference over to Mr. Chris Meehan, CEO. Please go ahead.
Yes, thank you. Good morning, everyone. Thank you and welcome to the investor presentation for Winton's FY25 interim results. With me on the call today, we have Jean McMahon, who's Winton's Chief Financial Officer. Today, I'll start off with the business update, and then Jean will go through the financials. I'll finish then with the market and outlook, followed by questions from investors and analysts at the end. I'll leave Jean to cover the financial results in detail, but in summary, Winton delivered an NZD $81.1 million revenue, an EBITDA loss of NZD $100,000, and a net loss after tax of NZD $2 million. While the overall results aren't what we would have liked, we've continued to operate with discipline.
We've nurtured growth parts of the business in line with the revenue diversification strategy, and we've avoided taking on significant new projects to protect the company from any undue risk until we see clear evidence that the property cycle is turning. We're navigating the recession as well as possible, but most importantly, we're positioning the company optimally to benefit from an improving property cycle when that comes. With that said, here are some highlights from the half-year. We settled 90 units in a difficult market and very challenging economic conditions. We finished the six-month period with a pre-sale book of NZD $342 million. We completed significant residential projects, including the Jimmy's Point project, which comprised 30 high-end waterfront apartments at Launch Bay, the 20 ALTA Villa townhouses, and Stage 17 at Northlake in Wānaka.
Sunfield was one of the initially listed projects under Part 2A of the Fast-track Approvals Act 2024, and Winton has recently submitted its very detailed application for that. Winton will work with the Ministry for the Environment over the coming months to progress this application. We completed and opened the Bakehouse and R.M. prime produce at Ayrburn, and we completed the renovation and the refurbishment of the waterfront Cracker Bay office building. We have a land bank yield of circa 6,000 units, including 877 retirement living units. As I mentioned, Winton settled 90 units in the first half of FY25, a decrease of 5.3% compared to first half 2024. Revenue from residential development for first half 2025 was NZD $70.6 million and NZD $6.6 million EBITDA. Of these settlements, 41.1% comprised constructed or built product compared to 34.8% in first half FY24.
Therefore, as a result, the cost of sales was higher than the first half of FY24, and the average revenue per unit was NZD 260,000 higher. The main settlements for the first half included part of Stage 3 at Lakeside, Te Kauwhata, Jimmy's Point Apartments at Launch Bay, and Northlake, Wānaka, Stage 17 land lots, and 18 of the 20 ALTA Villa townhouses, with two other ALTA Villa townhouses settling this calendar year. We're thrilled with the excellent standard of the delivered product and the outstanding feedback from our delighted buyers. We believe Winton's reputation for delivering high-quality product has only been enhanced by these projects. In addition to the settlements mentioned on the prior slide, progress has continued at pace on existing projects. A few of the key milestones include the work towards planning approvals for Stage 7 and onwards at Northridge in Cessnock, Australia.
The construction of Stage 18 at Northlake Wānaka commenced in December, with the first titles expected in June 2025. The completion of the Beaches residential development in Matarangi, the work done on the last 112 lots in Stage 3 at Lakeside Te Kauwhata, which has since been completed and will settle in the coming weeks, and as I mentioned on the earlier slide, Winton's Sunfield project was one of the initial listed projects under Part 2A of the Fast-track Approvals Act, and we have recently submitted a very detailed application for that. Moving to Northbrook, Northbrook Wānaka Stage 1 residences are taking shape as construction has continued at pace there. It is on target for our first residents to move in during May 2025. Stage 1 includes 32 luxurious residences along the recently named Ten Acre Drive within Winton's Northlake neighbourhood.
At the recent site open day of Stage 1, over 30 groups attended, with many attendees acknowledging the superior standard of the Northbrook product. The central wellness facilities are also well underway, and we expect these to be completed by November 2025. Progress on the other Northbrook locations continues. In December, despite strong pre-sales, we determined that pushing out the Northbrook Wynyard Quarter project by circa 12 months was the right call to make. Northbrook Wynyard Quarter is a big project for us, so we are playing a prudent game and want to get the timing and the cycle exactly right.
We believe there is further opportunity for construction and interest costs to moderate over the next year, which will flow through into the property market and positively impact this project. This decision enables us to focus on Northbrook Wānaka and Northbrook Arrowtown and accelerate these projects where possible.
Winton remains committed to this high-quality project in downtown Auckland and will complete the current site preparation work, including all the piling works and building consenting, over the next 12 months. Detailed design for the project will continue in parallel during 2025. At Northbrook Arrowtown, the sales team is pleased with the level of visitors to the display suite, and building consent for the first two buildings forming Stage 1 has been lodged, and once obtained, procurement for this stage will continue. Work has continued on the layout and design for Stage 1 at Northbrook Launch Bay within Winton's Launch Bay neighbourhood at Hobsonville Point. During first half 2025, Christchurch City Council made decisions on Plan Change 14, which increased the permitted height from 14 to 22 meters, and this unlocks opportunities for greater efficiencies at the Northbrook Avon Loop site.
We are therefore reviewing the most desirable layout for Northbrook Avon Loop to ensure an optimal development outcome for this project. Moving to commercial, our commercial projects include Winton's investment in properties at Lakeside and Cracker Bay and operating businesses at Ayrburn and Cracker Bay. Revenue for this segment includes rent and hospitality revenue. Commercial revenue for first half 2025 was NZD 10.4 million, an EBITDA of negative NZD 3 million, and a reported net loss after tax of NZD 4.7 million. At Cracker Bay, the renovation and refurbishment of the Cracker Bay office building is now complete. It offers premium waterfront office facilities for tenants across four levels.
In addition, the last council approvals were received for the wider Cracker Bay and Northbrook Wynyard Quarter precinct. This includes for the hospitality and various submitted for the Northbrook Wynyard Quarter resource consents. Momentum continues at Ayrburn as a multi-value hospitality and tourism destination.
During first half 2025, Ayrburn had a full six months of trading, and in December, we opened the Bakehouse and R.M. Prime produce. In June 2024, industry leader Kieran Turnbull joined the Ayrburn team as general manager, bringing experience, knowledge, and leadership to the relatively new team. Ayrburn has continued to refine and improve its internal systems, including the technology suite across the reservation, point of sale, and reporting platforms. This has resulted in a more cohesive approach across multiple venues, enabling faster decision-making to maximize the utilization of capacity and demand.
The Ayrburn team has improved operating efficiency and reduced overheads, which will be more visible in the second half of this financial year. The opening of the Bakehouse unlocked further opportunities for more significant events while being able to serve non-event visitors and has created further momentum, particularly for weddings and other associated functions in 2027, 2025 and 2026.
During first half 2025, Ayrburn hosted a number of significant and successful events. In the second half of the financial year, Ayrburn will host various music events, and in March, it will hold its first festival of motoring, the Ayrburn Classic. Now, to the financial overview, I'll pass to Jean. Thank you.
Thanks, Chris. Good morning, everyone. It's great to be here today to present our interim results for FY25. Winton has delivered revenue of NZD $81.1 million in H1 FY25, 5.3% down from NZD $85.6 million in H1 FY24. A total of 90 units were settled, a decrease of 68 units. Cost of sales of NZD $57.6 million is slightly higher than H1 FY24 by NZD $0.6 million. This is largely a result of the 18.1% increase in built product settled by volume in H1 FY25, which has a higher cost per unit than land lot sales. Commercial revenue increased by NZD $7.7 million in H1 FY25 due to Ayrburn contributing six months of trading compared to the previous period when it was only open for one month. A fair value loss of NZD $2.8 million results from the revaluation of commercial assets and retirement land within the investment properties portfolio.
This compares to a gain of NZD $2.6 million in H1 FY24. Administrative expenses increased by NZD $3.6 million in H1 FY25. This was mostly due to an increase in employee benefits expense by NZD $4.5 million, with Ayrburn trading for an additional five months, offset by a decrease in establishment costs of NZD $2.4 million. Establishment costs are those costs incurred in relation to pre-opening of Ayrburn venues, and these include branding, marketing, recruitment, and employee training. Net interest income was NZD $0.7 million lower due to a decrease in average cash reserves. The resultant net loss after tax in H1 FY25 is NZD $2.0 million, a reduction from a NZD $9.7 million net profit after tax in the prior period. An increase in investment properties of NZD $44.1 million represents progress at Northbrook Wānaka and Northbrook Wynyard Quarter.
During the period, Winton entered into a NZD $18.3 million dollar debt facility secured against the completed office building and marina complex at Cracker Bay. This facility has a term of 12 months, with the ability to extend for a further two years. The balance of this facility as at 31 December 2024 was NZD $7 million. In February 2025, Winton entered into a new borrowing facility in respect of its Sunfield project. The facility limit is NZD $22.5 million with a term of 18 months. Winton has no recourse debt at group level, and all other properties, excluding Lakeside, across the group remain unencumbered. We enter the second half of FY25 with NZD $26.1 million in cash reserves. Receipts from customers are in line with a decrease in revenue, and a decrease in operating activities is due to a decrease in tax liabilities. Pleasingly, we have experienced no settlement defaults during this period.
A number of projects completed in H1 FY25, including Jimmy's Point, Northlake Stage 17, and Northlake Townhouses. Residual stock remains low at circa 40 units across our completed projects. I'll now hand back to Chris.
Thank you. To the market now, look, the economic downturn is more severe than we expected and has continued for longer. Building consents remain subdued, and insolvencies have increased. The volume of ready-mix concrete remains in decline, and construction costs remain high. A change in government was anticipated to be a catalyst to get the economy moving again and get it out of recession. However, it is taking more time than was generally expected. While the decrease in the OCR this week is positive for the market, unemployment continues to increase. We maintain our view that until the unemployment starts to drop, the residential market is unlikely to substantially turn around.
While the overall results aren't what we would have liked, we have continued to operate with discipline, nurtured growth parts of the business in line with the revenue diversification strategy, and avoided taking on significant new projects to protect the company from undue risk until we see clear evidence that the property cycle is turning. We're navigating the recession as well as possible, but most importantly, we're positioning the company to optimally benefit from an improving property cycle. We remain cautious and believe New Zealand isn't yet at the bottom of the construction cycle. While interest rates have decreased, that is only one part of the economic levers that shift and stifle the economy. Unemployment continues to increase, and we maintain our view that the property market is unlikely to substantially turn around until after unemployment has peaked.
While we continue to remain in challenging times, we are confident in Winton's financial position and our strategy to weather the continued weakness in the economy and come out on the other side very well positioned to the future. Thank you for attending, and that brings our presentation to an end, but we're happy to move on to any questions if anybody has any.
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 a speakerphone, please pick up the handset to ask your question. Your first question comes from Nicholas Hill with Craigs I P. Nicholas Hill, your line is open. We will just move to.
Hello, Echo. Echo, can you hear me now? Apologies. Can you hear me?
Yep, I can hear you now.
Oh, brilliant. Sorry. Just a tech glitch there. A couple from me and good morning. With regards to the new facility at Sunfield, what exactly is this for?
We've completed the settlement of the final tranche of land purchase moneys that were payable to the vendor.
Thanks. And is there any update in terms of the private plan change for the 50-hectare zone future urban?
It's progressing through the council process, but we expect that to be overtaken by the fast-track process that's running in tandem.
Okay, thanks. And then the facility for the Cracker Bay office refurbishments, is this for the development spend? I noticed that you use half of the facility. And also, is this expected to be held on the balance sheet, or do you expect it to be extinguished by future unit sales?
It's a flexible facility, and we'll use the money for general purposes, and it will come and go over time.
Okay. I guess you also mentioned that you've deferred significant projects given where we are in the cycle. Is this referring only to Northbrook Wynyard Quarter, or are there other ones that you can mention?
I think we have the same feeling on Northbrook Launch Bay. Yeah, they're both significant projects. They both have a big construction spend, and you want to make sure that the commencement of those projects, when we're awarding contracts, we're at the very bottom of the construction cycle.
Okay, thanks. And with regards to just generally this new debt, do you see it in any way limiting your ability to take advantage of any countercyclical opportunities, such as through the MaxCap fund or elsewhere? Or alternatively, are there some private lenders in the market that may be willing to help out with such opportunities?
I mean, there's lots of private lenders in the market that are approaching us constantly with projects that they've lent against that are in trouble. We haven't been sufficiently taken with any of them to act as yet, but we don't think the debt has any impact. And so we've got headroom with the cash and plenty of debt headroom in the current facilities, so I think that only enhances our ability to capitalize if we see something we like.
Okay, thanks. And then just back to the Cracker Bay office refurbishment. So it's completed. Do you have any commentary on the leasing and when you expect or are hoping for the asset to become fully stabilized?
Yeah, I think probably early in the end of this year, early CY26, we think the office building will become fully stabilized.
Thanks. That's all from me. I'll let someone else have a go.
Thanks, Nick.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Rohan Koreman-Smit with Forsyth Barr.
Morning, guys.
Hello.
Back on the fast track. Can you just give us an expected timing? I think you've got, what, 30? They've got 30 working days to consider the proposal. So should we expect something from you in late March?
I mean, there's a very prescribed statutory timeframe for the analysis and approval process to run its course. There are some, well, sorry, there's really one mechanism for delaying that, and that's the appointment of a panel. So if you sort of extrapolate out the statutory timeframes and allow a bit of time for the appointment of a panel, we think it's more like sort of mid-year.
Okay. It's a bit longer than I'd been expecting. And then in terms of the process from there, how fast, I guess, can you mobilize on-site? What work needs to be done early? And do you have any color on the commercial portion of the land and whether you've been, I guess, sounding the market on that?
No, we want to wait till we have an approval in hand. I think given the process we've been through to date, that's a prudent approach for us to take. Nowithstanding, we have had some approaches from parties that have a firm interest in the commercial industrial land, but we're not really engaged until we have an approval in hand. In terms of the civil works, I mean, the civil works, we have seen big price drops, circa 15%-18% in the civil prices over the last two years. So we do want to get stuck in as fast as we can and take advantage of that low pricing. So I think it's fair to say that if we have an approval in hand, we're going to get going with the bulk of the stormwater infrastructure and the civil works in very short order.
Cool. Thank you. And then, I guess, the funding for that, it's probably more a question for Jean, but is it something that you'd look to, I guess, progress with these new or maybe slightly expanded debt facilities that you're taking on, or would you need, say, firm commitment on the industrial land to back any sort of increase in debt to?
No, we feel like we've got enough cash flow from other things and headroom in existing debt facilities to get going, and then we would look to augment that with some cash flow from the project itself.
Perfect. And just going to pre-sales, can you give us an idea of, I guess, progress on Wānaka or how much of the first 32 in stage one are sold in Arrowtown as well in terms of pre-sales momentum there? And maybe also whether you've seen any pre-sales drop off at Wynyard given the pause.
We're still in discussions with the buyers at Wynyard, and we'll report on that when we have a sort of a concluded position. The sales at Wānaka are in line with where we thought they'd be, so we expect a very good chunk of that to be occupied on completion. In Arrowtown, the sales have been good. The prices are very good, but we have quite a long waiting list of people that want to see us get going, and they're a bit. There's a long lead time there, so they just want to make sure that they're in check with that because it is a two-and-a-half-year wait for the product.
Do you have any given? I guess you'd talk about not wanting to progress with some major projects, but I noticed you've got land at Avon Loop or had land at Avon Loop on the market. Can you give us an update on maybe sales of surplus assets and other bits and pieces that you kind of could use to improve?
Yeah. I mean, there's not a lot of surplus assets. Most of the assets we have, we don't want to sell, but the Avon Loop's probably an exception in the sense that the plan change went through there. The height got improved. We didn't need as much land as we thought we did in the initial phases of design on that, so we have got a surplus lot there that we are looking to sell.
Perfect. And then final one, just on Ayrburn, you talked about improved operating efficiency and reduced overheads. Can you give us an idea of the quantum of improvement you're expecting in the second half? Granted, you've got more venues open and other bits and pieces which no doubt help leverage the overheads, but can you give us some idea of where you kind of see the commercial part of the business in the second half?
I mean, it's significant, but I'll leave Jean to talk to that detail if that's okay.
It's probably not something that we're prepared to disclose in terms of detail at the moment, Rohan. Thanks.
Oh, okay. So we'll have to wait to see how much better it gets in the second half in six months' time then. Thanks for taking my questions. I'll let someone else have a go.
No problem.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I'll now hand back to Mr. Meehan for closing remarks.
Okay, well, thank you everyone for joining the call, and we appreciate your time today and thank you again, Jean, and those that asked questions. Thank you very much.
That does conclude our conference for today. Thank you for participating. You may now disconnect.