Shares in this ASX REIT crash 15% on its half-year results

Lifestyle Communities Ltd (ASX: LIC) shares have plunged in morning trade on Thursday. At the time of writing, the shares have crashed 15.68% to $4.84 a piece. The drop follows the ASX REIT’s half-year results for FY26, which it posted ahead of the market open this morning.

The decline means the shares are now 6.20% lower year to date and 50.71% below where they traded one year ago.

What did Lifestyle Communities post in its H1 FY26 results?

Here’s what the ASX REIT posted for the half-year ended 31st December 2025:

• Statutory profit after tax down 30% to $15.8 million
• Operating profit after tax down 29% to $16.1 million
• Net debt of $323.6 million
• Dividends remain on pause

What happened in H1 FY26?

Lifestyle Communities reported statutory profit after tax of $15.8 million for the first half of FY26, down significantly (30%) from $22.7 million in the first half of FY25. The decline reflects lower new home settlements (128 in H1 FY26 versus 137 in H1 FY25), impacted by lower sales rates in earlier periods, reduced DMF revenue following a notice of listing from the Court of Appeal – Supreme Court of Victoria, and a greater portion of interest costs expensed against the land bank. 

The company also posted operating profit after tax of $16.1 million for the first half of FY26, also down considerably from H1 FY25.

Lifestyle Communities recorded double-digit growth in net sales from new homes from the prior periods, up 168% from H1 FY25 and up 12% from H2 FY25. The team also delivered the strongest established net sales result in recent periods, up 40%. 

There was steady growth in rental income from operating communities, up 11.9%, driven by new home settlements and CPI-linked rental increases.

Positive operating cash flows reached $41.2 million for the six-month period, up from negative $12.9 million this time last year. The company said the improvement is due to a reduction in development expenditure, which reflects disciplined management of build rates, and completion of civil and infrastructure works at communities in progress. 

Meanwhile, its net debt balance was down from $460.5 million in June 2025 to $323.6 million as of December 2025.

Management decided it would continue to pause dividends and retain the capital within the business until the market improves.

What’s the outlook for the ASX REIT for FY26?

Lifestyle Communities Chief Executive Officer, Henry Ruiz, said that while the Victorian property market showed some improvement during the period, it has shown recent signs of softening consumer sentiment.

He added, “In 2HFY26, shareholders can expect to see further de-leveraging of the balance sheet and full year positive operating cash flow. We will continue to be market led in our development and sales approach, noting that due to the lag between sales and settlements, lower prior period sales rates will temper future settlements.”

The post Shares in this ASX REIT crash 15% on its half-year results appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.