Peet’s record year gives Ingenia deal a stronger earnings backdrop

Record earnings arrive alongside Ingenia transaction

Peet Limited (ASX:PPC) produced its strongest reported year just as shareholders face a decision over whether to join a larger living-sector platform. Operating and statutory profit attributable to Peet shareholders rose 77% to $103.4 million for FY26, while EBITDA increased 54% to $162.8 million and earnings per share reached 22.09 cents.

The result gives the proposed Ingenia Communities Group (ASX:INA) takeover a more substantial backdrop than a routine property-sector exit. Under the scheme, Peet shareholders would receive $0.68 in cash and 0.3367 Ingenia stapled securities for each Peet share, alongside the 6.5-cent final dividend for eligible holders. Peet puts the combined value at up to $2.1859 per share, although the securities component means the eventual value is not entirely fixed in cash.

Sales visibility strengthened across the land bank

Peet sold 2,996 equivalent lots during the year, up 8% on FY25, while settlements edged 1% higher to 2,665 lots. Contracts on hand rose 39% to $850.7 million at 30 June, giving the company a larger pool of contracted work entering FY27, subject to settlement timing and prevailing market conditions.

Western Australia and Queensland remained the main engines of demand, with South Australia also contributing price growth. The company’s national pipeline now comprises more than 26,400 lots with an estimated gross development value of $11.5 billion. About 80% of the development pipeline was activated at year-end, although the report cautions that housing affordability, interest rates, cost pressures and state-based market differences remain relevant risks.

Funds management supplied the sharper earnings lift

The most striking operational change came from Peet’s funds management projects. Sales rose 48% to 1,949 lots, settlements increased 21% to 1,619, and EBITDA jumped 85% to $79.2 million. That compares with a 28% increase in EBITDA to $77.6 million from company-owned development projects, despite lower development-project sales and settlements.

Funds management represented 37% of the group’s pipeline by lot count but contributed 56% of segment EBITDA before unallocated items. That mix helps explain why earnings expanded much faster than total settlement volumes, while also highlighting the importance of fees, co-investment returns and project timing to Peet’s reported performance.

Balance sheet improved before the proposed change of control

Net debt fell to $200.6 million from $242.4 million, gearing declined to 24.8% and interest cover improved to 7.6 times. Peet also repaid $75 million of its earlier notes during FY26. The board declared total fully franked dividends of 13 cents per share, up from 7.75 cents, and completed its on-market buy-back after acquiring almost 22 million shares over the life of the program.

Shareholders have already received the earlier record FY26 results, which reported the same 77% profit increase and 39% rise in contracts on hand, while the annual report now places those figures alongside the proposed transaction. The board says the Ingenia combination would create the largest pure-play ASX-listed living-sector platform, with greater scale and diversification; that is the board’s stated rationale, not a completed outcome.

Scheme approval remains the decisive catalyst

Peet’s board unanimously recommends the scheme in the absence of a superior proposal and provided the independent expert concludes, and continues to conclude, that it is in shareholders’ best interests. The transaction still requires shareholder, regulatory and court approvals, as well as other customary conditions. A draft scheme booklet had been lodged with ASIC for review earlier in October, according to recent company coverage.

For now, Peet says it will continue operating normally, with Aston Craigieburn and South Onkaparinga Heights already launched in July and Keysborough planned for FY27. The central question is whether shareholders ultimately value the certainty of the cash component and exposure to Ingenia more highly than the earnings momentum, strengthened balance sheet and large development pipeline Peet has demonstrated on a standalone basis.