FINBAR GROUP LIMITED — Interim / Quarterly Report 2021

Feb 23, 2021

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ASX RELEASE / MEDIA STATEMENT

February 24, 2021

For immediate release

Finbar reports half year profit of $4.023M

• Finbar confirms H1 FY21 net profit after tax of $4.023m

• Sales levels reaching five year record highs supporting new works and growth

• Construction of landmark Civic Heart project commenced in February 2021

• Finished the year with strong cash levels of $31.5m

• Continued strong cash flow expected from selldown of completed debt free stock

• Fully franked interim dividend of $0.02 per share

PERTH 24 FEBRUARY 2021: Western Australia’s leading apartment development company, Finbar Group Limited (ASX:FRI) (Finbar or the Company) has today announced a net profit after tax of $4.023 million for the first half of the 2021 financial year (H1 FY2021).

A detailed breakdown of earnings for the period shows that sales at the company’s remaining stock at Sabina (27%), Palmyra (14%), and recently completed Riverena (20%) projects were the largest financial contributors for the period.

The result marks the company’s 25th consecutive year of profit and comes on the back of significant market uncertainty as the COVID-19 pandemic continues to impact global markets and economies.

Finbar finished the reporting period with $31.5 million in cash and ongoing strong cash flow as the sell down debt free completed stock accelerates across its development portfolio.

The company’s rental assets - Pelago in the Pilbara and Fairlanes on Adelaide Terrace - contributed 7% of earnings for HY21 and strong rental demand in the Pilbara is seeing full occupancy and an increase in asset book values.

Construction has now commenced at the company’s landmark Civic Heart project in South Perth on the back of robust presales momentum, with construction at its AT238 project also being brought forward to commence next month (March 2021).

Construction at its Dianella project continues and is estimated to be completed in the first quarter of next financial year.

Commenting on the half-year financial results today, Finbar Managing Director, Darren Pateman, said that the results largely reflect the sell down on stock from previous reporting periods. Finbar was pleased to see market positivity and confidence growing into 2021 following the initial impact of the pandemic on financial markets. $34.6 million in sales occurred in January alone, historically a quiet sales month for the industry, and is the highest level recorded since 2006.

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He said the positive sales conditions had pulled forward construction dates at the company’s key projects, helping draw investors back into the market, albeit cautiously.

“We are seeing the gradual return of investors to the market, buoyed by the ongoing low interest rate environment and the record low vacancy rates currently being experienced across Perth and the Pilbara which is helping to strengthen yields.”

“These same rental pressures are also resulting in many tenants leaving the rental market to transition to ownership”.

Mr Pateman said that the government stimulus measures for projects where construction had not yet commenced had helped boost sales across some projects, however he called on the WA Government to reinstate rebates for projects already under construction which would give an incentive for companies to commence construction works at the earliest opportunity and help further drive the local economy.

“Despite global uncertainty and ongoing restricted domestic and international travel, the Western Australian COVID situation is very stable and our economy remains in good shape, underpinned by sustained strong commodity prices,” he said.

Mr Pateman said the group had recently secured the Chem Labs site from the State Government and detailed design works were well progressed.

He said that the company was in the fortunate position of having a strong pipeline of approved and new projects ready to go and we have a renewed confidence in the longer-term strength of the market.

“We are seeing very strong and competitive buyer demand, not just for Civic Heart, but across our property portfolio as the residential market continues to heat up.”

“Perth’s property market is really beginning to gather momentum after years of sluggish growth and low supply. Western Australians are returning to live in Perth from interstate and overseas, and there are growing numbers of buyers and investors who have been watching from the sidelines waiting for the signals that Perth is moving into the next cycle.”

Finbar currently has projects with an end value of $469 million under construction, a further $544 million of estimated end value with development approval, and an additional $335m of estimated end value in unapproved pipeline.

“Finbar remains ideally placed with our project land pipeline already secured, a growing pre-sales book, good cashflows from debt free stock supporting a significant increase in capital works spend currently taking place. This gives us confidence in seeing growth in profits as these projects reach completion and revenues are recognised.”

Full details regarding the confirmed dividend will follow by way of a separate announcement.

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For further information, please visit www.finbar.com.au or contact:

Darren Pateman Managing Director Finbar Group Limited Via Email: renee@finbar.com.au

Georgie Sweeting GT Communications Email: georgie@gtcommunications.com.au | Mobile: 0417 179 024

Finbar Group Limited, its controlled entities and its jointly controlled entities, is a property development company whose core business lies in the development of medium to high density residential apartments and commercial property within the Perth Metropolitan Area and the Pilbara within the State of Western Australia

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