Lifestyle Communities shares fall as negative media coverage hits sales
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More news: Shares in Lifestyle Communities lowered on the ASX after the property developer flagged that recent negative media coverage has impacted its performance in the first four months of the financial year.
Lifestyle Communities shares were down 3.5% to $8.58 by 1:30pm AEDT, having shed more than 50% since January.
Lifestyle Communities sees cancellations spike after media reports
The news: Lifestyle Communities has told its shareholders that "there is no doubt our reputation has been damaged" by recent media coverage, after reports of unethical conduct at one of the property developer's projects impacted sales and cancellations during the start of the financial year.
The numbers: In the four months to 31 October, Lifestyle Communities reported 92 new home settlements compared to 64 in the previous corresponding period. It established 42 new home settlements, down from 51 this time last year.
It reported a spike in cancellations during July, the month the media reports emerged, with 34 reported compared to 19 in the previous month.
Lifestyles Communities said it expected first-half settlements to be in the range of 120 to 130, compared to 124 during the same period last year. First-half operating earnings after tax is expected to be between $19.5 million and $22 million, compared to $20.8 million a year ago.
The context: The group told its annual general meeting (AGM) the "vast majority" of its 5,500 homeowners have "expressed disappointment" at the way the business has been portrayed in the media.
It noted that the reports focused on exit fees without considering the lower entry price that the company's homeowners typically pay, or the other benefits on offer.
As part of its response to the media reports, the company appointed an independent expert to review the fairness of its sales processes and customer disclosures.
The report, which was received earlier this month, found that Lifestyle Communities' policies and marketing collateral are "in-line or ahead" of competitors for transparency and comprehensiveness.
Likewise, its fee structure, policies and agreements are in line with regulation.
Elsewhere, Lifestyle Communities said that the market environment remains challenging, impacted by interest rates and state taxes. Conditions are expected to remain challenging for the remainder of FY25, it said, while management is taking steps to adjust the cost base and reduce development spend to match reduced activity levels.
What they said: "It is clear the adverse media coverage has impacted our lead indicators, sales rates, and deposit cancellations," the company said.
"Lifestyle's key challenge from here is to convince new customers to look past the media coverage, and visit one of our communities to see the offer for themselves."
The source: ASX announcement
