The news: Shares of Lifestyle Communities dropped sharply, despite a positive response from analysts regarding the company’s first-half results released after Monday’s market close.
The numbers: By 1:40 PM AEDT, shares fell 8% to $9.03, marking a total decline of over 40% in the past year. The company reported an operating profit after tax of $22.7 million for the first half, which is 9.5% higher than last year and 8% more than expected.
This positive performance was due to more new home settlements than anticipated, with 137 homes settled, exceeding the 120-130 range mentioned at the annual meeting last November.
In terms of sales, the average monthly net sales rate was 9.2 from August to December, but it rose to 14 from January to February. UBS analysts believe that to reach the target of 300 settlements in FY26, the company will need to boost sales to about 25 per month.
The context: David Blight, executive chair of Lifestyle Communities, attributed the positive results to hard work during a tough period, especially after negative media reports in July. The company faced backlash from 80 residents at a northwest Melbourne site, who raised ethical concerns.
Additionally, Lifestyle Communities revealed that Henry Ruiz will become the new CEO on March 5. Ruiz has extensive experience, having spent 15 years in leadership roles at REA Group. He will take over from co-founder James Kelly, who retired in December.
Citi analysts were optimistic about the stock’s future following the results. They highlighted plans to reduce debt by selling land and cutting development spending by pausing some projects. Changes in cost structure are also expected to help reduce expenses moving forward.
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