Peet delivers record half-year as net profit doubles to $50.9 million
Peet Limited (ASX: PPC) has reported net operating profit of $50.9 million for the half-year ended 31 December 2025, representing a 102% increase on the prior corresponding period. The residential land developer has upgraded its full-year guidance to a range of $86-90 million, signalling anticipated earnings growth of 47-54% compared to FY25.
The result reflects Peet earnings growth FY26 driven by favourable market conditions in Western Australia, Queensland and South Australia, where housing supply constraints and elevated migration levels continue to support demand for titled residential lots. Operating earnings per share rose to 10.88 cents, also up 102% on 1H FY25, while the Board declared an interim dividend of 6.5 cents per share, fully franked, representing a 136% increase on the prior year.
The company’s EBITDA margin expanded to 34%, an improvement of eight percentage points on the prior corresponding period, while net tangible assets per share increased 5% to $1.44 since 30 June 2025. Peet (ASX: PPC) maintains gearing of 24.7%, within its target range of 20-30%, with more than $200 million in cash and undrawn facilities available to support ongoing project delivery and future growth opportunities.
Key financial metrics at a glance
| Metric | 1H FY26 | 1H FY25 | Change | Investment Note |
|---|---|---|---|---|
| Net Operating Profit | $50.9M | $25.2M | +102% | Validates portfolio positioning in strongest residential markets |
| Operating EPS | 10.88 cents | 5.38 cents | +102% | Per-share earnings growth matches absolute profit growth |
| EBITDA Margin | 34% | 26% | +8ppts | Margin expansion indicates pricing power and operational efficiency |
| Interim Dividend | 6.5 cents | 2.75 cents | +136% | Fully franked; record date 12 March 2026 |
| NTA per Share | $1.44 | $1.37 | +5% | Book value increase since 30 June 2025 |
| Gearing | 24.7% | 28.3% | -3.6ppts | Mid-point of 20-30% target range; balance sheet strength maintained |
What drives residential land developer profitability?
Residential land developers such as Peet (ASX: PPC) generate returns by transforming broadacre land into titled residential lots ready for house construction. Understanding this business model helps investors assess why 76% land bank activation and $776 million in contracts on hand signal strong forward revenue visibility.
The land development cycle operates through several distinct phases:
- Land Acquisition: Developers purchase large parcels of undeveloped land, typically on the urban fringe where prices per hectare are lower than established residential areas.
- Planning and Approvals: Securing development approvals from local authorities, including subdivision plans, environmental clearances, and infrastructure requirements.
- Infrastructure Development: Installing roads, drainage, utilities (water, electricity, telecommunications), and community facilities before individual lots can be sold.
- Lot Sales and Settlement: Marketing titled lots to homebuilders and individual buyers, with revenue recognised at settlement when legal ownership transfers.
- Project Completion: Final infrastructure handover to local councils and completion of community facilities.
Land bank activation refers to projects that have launched and commenced sales, with all lots in those projects considered available to the market. Higher activation rates indicate the developer has market-ready inventory to capitalise on current demand conditions without delays associated with planning approvals or infrastructure installation.
Key profitability metrics for land developers include EBITDA margin (which measures earnings before interest, tax, depreciation and amortisation as a percentage of revenue), gearing (the ratio of net debt to total assets, indicating financial leverage), and contracts on hand (the value of sold but unsettled lots, providing visibility over future cash inflows).
Operational performance signals sustained momentum
Peet (ASX: PPC) sold 1,773 lots and settled 1,496 lots during the half-year, with settlement activity concentrated in Queensland and South Australia contributing to improved cash inflows from operations. The company’s contracts on hand increased 27% since 30 June 2025 to $776 million, providing revenue visibility into FY27.
The significant increase in forward contracts positions the business to maintain earnings momentum, subject to settlement timing and market conditions. Land bank activation remained at 76%, ensuring a ready supply of titled lots available to meet current market demand without delays associated with project launches or planning approvals.
Key operational metrics for the half-year include:
- Lots sold: 1,773 (includes equivalent lots)
- Lots settled: 1,496 (includes equivalent lots)
- Contracts on hand: $776 million (up 27% since 30 June 2025)
- Land bank activation: 76%
- New projects scheduled: Three projects planned to commence in FY27
The high activation level supports ongoing production efficiency and provides a solid platform for continued delivery in the second half of FY26 and into FY27. With three new projects scheduled to commence in FY27, the company is positioned to maintain inventory levels as current projects near completion.
CEO Brett Fullarton on the result
Brett Fullarton, Chief Executive Officer
“Peet’s first half performance reflects the favourable market conditions being experienced across the Australian residential housing market and the continued solid momentum we are experiencing in key regions, notably WA and Queensland. The uplift in earnings highlights the strength of our position as we move into the second half of FY26. We have upgraded our FY26 NPAT guidance to a range of $86-90 million, which reflects a weighting in our full year performance towards the first half due to the timing of settlements. We have a high proportion of our projects activated, with three new projects scheduled to commence in FY27. With healthy demand, a well-balanced portfolio and a clear delivery focus, the Group is well placed to continue building on this performance.”
Balance sheet strength supports growth capacity
Peet (ASX: PPC) reduced gearing to 24.7% at 31 December 2025, positioning the company at the mid-point of its target range of 20-30%. The company maintains over $200 million in cash and undrawn facilities, providing capacity to fund ongoing projects and support future growth opportunities, including opportunistic land acquisitions in target markets.
The company benefited from reduced pricing on its syndicated debt facility following the addition of a third financier in August 2025, lowering the weighted average cash cost of debt to 7.7%. The refinancing represents a reduction in borrowing costs at a time when settlement activity and cash generation have strengthened across the portfolio.
Balance sheet highlights include:
- Gearing: 24.7% (within target range of 20-30%)
- Cash and undrawn facilities: Over $200 million
- Weighted average cash cost of debt: 7.7%
- Share buyback impact: Approximately 4% reduction in shares on issue
The on-market share buyback closed during 1H26, having reduced the shares on issue by approximately 4% while open. The capital management initiative demonstrates the Board’s confidence in the company’s earnings trajectory while returning capital to shareholders alongside the increased dividend.
Strong settlement activity, particularly in Queensland and South Australia, contributed to lower levels of bank debt and improved cash inflows from operations. The disciplined capital structure provides flexibility for land acquisition while maintaining shareholder returns through dividends and the completed buyback programme.
Market tailwinds and FY26 outlook
Peet earnings growth FY26 is supported by structural demand drivers that continue to underpin activity across the company’s key markets. Management has upgraded full-year guidance to $86-90 million net profit, representing anticipated earnings growth of 47-54% compared to FY25, subject to a continuation of current market conditions and the timing of settlements.
Key demand drivers supporting the outlook include:
- Elevated migration levels: Sustained population growth increases household formation and demand for new housing stock.
- Housing supply constraints: Limited new lot supply in established markets supports pricing and absorption rates for developers with activated inventory.
- Solid labour market conditions: Low unemployment rates support buyer confidence and purchasing capacity.
- Government support for first-home buyers: State and federal initiatives continue to underpin entry-level demand in target markets.
- Long-term interest rate positioning: Despite recent upward movement, rates remain favourable on a long-term basis compared to the pre-2020 period.
Regional market conditions vary, with demand in Western Australia, Queensland and South Australia remaining robust. Improving conditions in Victoria and the ACT/NSW markets provide opportunities for growth as those markets recover from softer conditions experienced in prior periods.
The full-year guidance reflects a weighting towards the first half due to the timing of settlements. Investors should note that settlement activity in land development is project-specific and can vary between reporting periods based on stage completion and title registration timing. The forward contracts position of $776 million provides visibility over settlement activity into FY27, though exact timing remains subject to administrative processes and buyer readiness.
Dividend details
The Board has declared an interim dividend of 6.5 cents per share, fully franked, in respect of the year ending 30 June 2026. This represents a 136% increase on the 1H FY25 interim dividend of 2.75 cents per share.
Dividend payment details:
- Amount: 6.5 cents per share, fully franked
- Record date: 12 March 2026
- Payment date: 26 March 2026
The dividend increase reflects the Board’s confidence in the company’s earnings trajectory and cash generation capacity, while maintaining gearing within the target range of 20-30%.
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