Peet (ASX:PPC) reported what management described as a “pretty strong” set of first-half FY2026 results, supported by higher sales and settlements volumes, expanding margins, and a larger contracts-on-hand position heading into the second half.
First-half FY2026 financial highlights
Chief Executive Officer Brett Fullarton said the company delivered net profit after tax (NPAT) of AUD 50.9 million for the first half, up “just over 100%” on the prior corresponding period. Fullarton also highlighted an EBITDA margin of 34%, compared with 26% in the first half last year.
Market conditions and strategic focus
Fullarton said the business continues to operate in a sector with “very favorable momentum,” pointing to strong population growth and constrained housing supply. He noted Western Australia, Victoria, and Queensland as the fastest-growing states, while also calling out Queensland and Western Australia as experiencing the fastest net interstate migration.
Despite a recent interest rate rise, Fullarton said Peet has not seen a slowdown in demand and believes customers are still enjoying a “reasonably favorable borrowing environment.” He also said the company continues to see strong interest from Australian and international capital seeking exposure to the Australian residential sector.
On strategy, Fullarton reiterated the company’s focus on owning and/or managing large master-planned communities. He said townhouses and low-rise apartment projects would continue to be pursued “opportunistically” depending on geography, capital requirements, and forecast returns. He also emphasized a geographically diverse, “long dated” land bank and a development cycle that management described as being in “serious harvest mode.”
Land bank and ESG highlights
Peet’s land bank totals nearly 28,000 lots, including almost 17,000 lots that are 100% owned and on the company’s balance sheet, and almost 11,000 lots held in various funds management structures. Fullarton described the portfolio as spread nationally across 43 projects, with notable exposure to Western Australia and Queensland.
From an ESG perspective, Fullarton cited two awards received during the half:
- Fort Largs in Adelaide was awarded Best Master Plan Community and Project of the Year by UDIA in South Australia.
- Brabham in Perth received the Excellence in Sustainability Award from UDIA in Western Australia.
Profit drivers, cash flow, and balance sheet
Fullarton attributed improved profitability to stronger sales and settlements volumes. He said sales growth was driven “specifically” by Western Australia, while settlement increases were driven across Western Australia, Queensland, and South Australia. The volume increase lifted revenue and flowed through to a stronger EBIT outcome, with NPAT rising disproportionately due to margin improvement.
Book net tangible assets (NTA) were AUD 1.44. Fullarton noted the company’s assets are held at cost and that the book value does not reflect “the true market value” of assets on the balance sheet or co-investments held within funds management structures.
On cash flow, the company reported a AUD 238 million cash inflow tied to improved activity. Fullarton said development expenditure was lower than the prior corresponding period (from AUD 131.7 million down to AUD 121.9 million) due to the development cycle within the portfolio. He also highlighted a “material improvement” in cash flow distributions and dividends from associates and joint ventures, reflecting returns from co-investments in funds management vehicles. Operating cash flow before acquisitions was “just under” AUD 71 million.
Land acquisition payments in the half were limited to term payments on the University of Canberra project, according to Fullarton.
Balance sheet metrics included total assets of “a little over” AUD 1 billion. Net debt declined from AUD 243.6 million at June last year to AUD 216.2 million, a reduction of about AUD 27 million, with gearing at 24.7%—within the company’s target range. Fullarton also said Peet had more than AUD 200 million of cash and debt facility headroom at the end of the half.
Dividend, segment mix, and outlook
Management declared an interim dividend of AUD 0.065 per share, fully franked. Fullarton said this was at the high end of the company’s payout policy range of 50% to 60%, and that management viewed it as appropriate given earnings performance, the balance sheet position, and expectations for the remainder of FY2026 and into FY2027.
In terms of earnings mix, Fullarton said 55% of first-half earnings came from the development portfolio (100% owned, on-balance sheet projects) and 45% from funds management. He compared that with FY2025, when the mix was 49% balance sheet and 51% funds management, and said the change reflected settlement timing within balance sheet projects.
Geographically, Western Australia and Queensland were the largest contributors in the half, with the two states accounting for 81% of EBITDA (compared with 75% combined in FY2025). South Australia contributed 12%, while Victoria and the ACT/Canberra region were described as smaller contributors in the half but potential upside as those markets improve.
Contracts on hand increased from AUD 612 million at 30 June 2025 to AUD 776 million at 31 December 2025, reflecting strong conditions particularly in Western Australia, Queensland, and South Australia, Fullarton said.
For guidance, Fullarton said FY2026 will be a record year but noted a “slight first half skew” due to timing, as the team brought forward activity into December that otherwise may have occurred in January and February. The company upgraded FY2026 NPAT guidance to AUD 86 million to AUD 90 million, from the AUD 74 million to AUD 78 million range announced in November. Fullarton attributed the upgrade primarily to strong performance in Western Australia and Queensland, and said the company expects earnings in FY2027 to be better than FY2026.
No questions were asked during the call’s Q&A portion.
About Peet (ASX:PPC)
Peet Limited acquires, develops, and markets residential land in Australia. It operates through Funds Management, Company-Owned Projects, and Joint Arrangements segments. The company provides underwriting, capital raising, and asset identification services; acquires parcels of land primarily for residential development purpose; produces non-residential blocks of land; and undertakes the development of land through joint arrangements with government, statutory authorities, and private landowners. Peet Limited was founded in 1895 and is based in Perth, Australia.
