Why is the Lifestyle Communities (ASX:LIC) share price pushing higher?

Lifestyle Communities Limited (ASX: LIC) shares are on the rise today as the company released its half-year results and investor presentation. At the time of writing, the Lifestyle Communities share price is trading 3.86% higher at $14.26.

How did Lifestyle Communities perform?

The Lifestyle Communities share price is responding positively after the company reported making solid progress during the first half of FY21. This was despite the ongoing impacts of COVID-19 and Melbourne’s stage 4 lockdowns impacting operations for most of the period.

Nonetheless, Lifestyle Communities achieved a net profit after tax (NPAT) of $14.1 million for the first half of the year. This compared to the $15.1 million achieved in the same period last year. Lower new home settlements relative to last year was the primary driver for the variance. However, the impact was partially offset by an 8% increase in income from site rentals, which were up from $11.4 million to $12.3 million due to the increased number of homes under management.

Furthermore, construction has continued throughout the period. Six communities are currently under development to meet the anticipated increased demand post-pandemic.

On this front, the company stated it was pleased with the acquisition of its new site in Rockbank during the period. Rockbank sits in Melbourne’s fast-growing North West corridor and has helped to reaffirm the company’s goal of delivering 900 to 1,100 settlements over the next three years.

Management comments

Lifestyle Communities Managing Director Mr James Kelly welcomed the news saying:

Given the circumstances we faced during the period, I am pleased with these results. We adjusted our sales process to focus more on sharing information and building knowledge. As a result of this, customers are advanced on understanding the benefits of the Lifestyle model now that restrictions have eased and we are once again able to meet customers face to face. This, combined with an increase in completed and available homes sees us well placed to meet the demands of customers ready to move after restrictions eased.

About the Lifestyle Communities share price

The Lifestyle Communities share price is one of the very few real estate investment trusts (REITs) listed on the ASX that has performed strongly over the last year. In fact, during 2020, it was the strongest performer within the S&P/ASX 200 Real Estate Index (ASX: XRE).

So far this year, Lifestyle Communities shares are trading around 12% higher, easily outpacing the All Ordinaries Index (ASX: XAO)’s return of 2.7%.

On a final note, Lifestyle Communities shareholders will be entitled to an interim fully franked dividend of 3 cents per share. This is consistent with the payment for the same period last year.

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Motley Fool contributor Daniel Ewing 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 Bruce Jackson.

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