PEET LIMITED — Annual Report 2005

Aug 30, 2005

Spring/Summer 2005

Profit growth 10%

Prospectus target exceeded

PEET

Peet & Company Ltd (ASX:PPC)has announced a net profit after tax of $31.6 million for the vear ended June 30, 2005, which is an increase of 10 per cent over the previous year and ahead of the Prospectus forecast.

In line with an increase in the tareet dividend payout ratio from 70-75%, a final dividend of 7 cents per share fully franked has been declared bringing the total dividend for the year to 12 cents per share which is ahead of the forecast full year dividend of 10.9 cents.

"The full year dividend plus the capital growth achieved in the share price since listing equates to a pre-tax return of some 60% to those shareholders who have been with the company since the IPO in August 2004," said Peet chairman, Tony Lennon.

"We are pleased with these results which reflect continued steady growth for the group since listing.'

Financial highlights

• Net profit after tax increased by 10% to $31.6 million (Prospectus forecast $31.1 million) compared to $28.7 million in the previous year.
• Earnings per share after tax increased $10%$ to $15.84$ .
• Full year fully franked dividend of 12 cents per share (Prospectus forecast
• 10.9 cents per share)
• Target of 10% growth in after tax net profit for 2006, based on current market conditions.

"Expansion and diversification of the group's business activities is on track with a range of new business initiatives, successful capital raisings and acquisitions during the 2005 financial year," said managing director Mr Warwick Hemsley.

"During the financial year the company sold more than 2,000 lots from its syndicated. joint venture and owned business grossing in excess of $300 million in sales from which the syndicate and joint venture projects divisions earned ongoing management and performance fees and the owned projects division earned development profits.

"The company experienced strong demand for residential land in Western Australia as a result of buoyant economic conditions. Market conditions in Oueensland and Victoria, while reasonable, have eased from previous levels and therefore contributed to a reduction in syndicated land sales revenue.'

The second half of the financial year saw the successful establishment of the Tarneit Rise and Point Cook Junction syndicates. Management and performance fees from The Ridge Estate in Baldivis, Western Australia, Tarneit Gardens and Cardinia Lakes estates in Victoria and Warner Lakes estate in Queensland commenced in the 2005 financial year.

With maturity of these new developments, the likely commencement of development and sales at Point Cook Junction in Melbourne's west, continued solid economic conditions in Western Australia and expected stable market conditions in Victoria and Queensland should result in improved performance from this division.

Results for the owned projects division increased 97% on the previous financial year, with development and sales beginning at Ashton Heights north of Perth and Greenvale Lakes Estate in Victoria.

The emerging joint venture division is expected to grow with existing projects including The Village at Wellard and the Quattro urban renewal project in Queens Park with the WA State Government.

The company continued its program of acquiring well located land parcels which has resulted in a net increase in the number of lots owned, managed or otherwise controlled. The additional lots comprise a combination of residential and potential industrial lots.

(Continued back page)

AICD address

"Immigration remains a key factor in the underlying strength of the Australian property market despite current slow-downs.

So said Warwick Hemsley, managing director of Peet & Company Ltd in a recent keynote address to the Australian Institute of Company Directors in Perth.

Mr Hemsley told the audience that he believed the Australian property market was about 18 months into a slowdown, depending on the State.

"However it won't be long before people are saying property is the way to go again."

"Over 100,000 people migrate to Australia every year, with about 35,000 forecast to head to Victoria alone in 2006."

In Western Australia, the booming mining industry is a key factor driving demand for property.

Figures for underlying demand estimate 160,000 dwelling commencements are needed in Australia annually from 2005 to 2010.

"The rate of dwelling commencements for 2004/5 was 155,900 so although the property market has come back from its 'highs' it is still sound, and doing particularly well in WA."

New executive team gets down to work

The appointment of a number of new key executives to the Peet & Company Ltd team will help drive the coordinated growth of the organisation.

Brendan Gore is the new Chief Financial Officer. Mr Gore was in a similar role with listed company Mermaid Marine Australia Ltd for the previous five years. He is a CPA with 14 years experience in senior corporate and commercial roles.

Stephen Kenney is the new general manager retirement housing. He will play a key role in the establishment of a retirement housing fund which would utilize potential sites within land estates currently owned/and or managed by Peet & Company Ltd in WA, Vic, Qld and NSW. Stephen holds civil engineering and MBA qualifications and has worked as general

manager for the St Ives Group as well as executive director of Care UK, Britain's largest provider of outsourced health and social services to the Government.

loanne Duck is the new national marketing manager. Ioanne was formerly senior marketing manager with the Westfield Group. In addition to her marketing degree, Joanne is completing an MBA at the University of WA.

Philip Ragan is manager of the recently launched Peet Income Property Fund. Philip was previously managing director of Guardian Funds Management Limited. He has been head of research for Salomon Smith Barney in Sydney and also spent eight years at Growth Equities Mutual working as a portfolio manager with property identities, Greg Paramor and Dick Lester.

Vicki Scott is the new HR and training manager. She has worked formerly as human resources manager with PCT Engineers in WA and as a HR practitioner with Woodside Energy Ltd. As welas her HR qualifications she holds an MBA

Lakelands wins top award

The 2500-lot masterplannedTestate, Lakelands, north of Mandurah, WA, has won a 2005 HIA - GreenSmart award for Development of the Year.

The award recognises residential estates which focus on providing a more sustainable environment.

"We are delighted that the estate has been recognised with this prestigious award. The strong interest in the estate by buyers indicates that people appreciate a more sustainable approach by land developers," said Warwick Hemsley, managing director of Peet and Company Ltd.

The natural features of the Lakelands Estate site include Black Swan Lake and the southern part of Paganoni Lake.

The estate has been carefully planned to protect and sustain the environment of lakes and wetlands, its swans and other wildlife through nature reserves and a program of rehabilitation.

Residents of the estate will enjoy a network of carefully planned and environmentally friendly boardwalks, paths, cycleways and walk trails which encourage more walking and biking. The street and land use pattern further enhances access by placing shops, bus stops and railway stations at key road intersections.

Situated about 45 minutes south of Perth and tenminutes north of Mandurah. Lakelands Estate is

New Baldivis project

Peet & Company Ltd has contracted to purchase a 17,04ha land parcel in the growth area of Baldivis southwest of Perth.

The purchase follows the very rapid takeup of sites in the current Peet estate, The Ridge in Baldivis.

"Peet continues to look for suitable land acquisitions across Australia as part of its ongoing program of sourcing and developing well located land parcels," said Anthony Lennon, national business development director.

The new elevated land parcel has potential for 200 lots and is close to a proposed town centre, a primary school, other land estates and transport routes.

adjacent to the planned freeway extensions and Mandurah railway. It is within easy reach of a range of attractive swimming beaches including the picturesque Madora Bay.

Facilities at the estate will include a proposed combined community centre and land information building, a public high school, primary schools, rail station and a major shopping centre when development is complete. The first stage of the Baptist College opened for the 2005 school year.

Company expands to include built-form

The expansion of Peet & Company Ltd activities from successful residential land development into a wider range of built form projects including retail, apartments, industrial and retirement is well underway.

Construction is soon to begin on architect-designed apartments in Joondalup, north of Perth. The Grand 56 apartments will offer high quality accommodation in an area which is popular for its mix of residential and commercial and wide array of facilities from educational to sporting and cultural.

In Victoria, the company is managing a new 'town centre' project, Point Cook Junction within the popular residential area, Innisfail Estate.

A vibrant mix of residential, commercial, retail and retirement developments is planned for this new centre which will become a hub for a fast-growing residential region with many quality land estates, west of Melbourne.

Peet is also expanding into industrial development with the purchase of a 24.3ha site in Trugamina, about 25km west of Melbourne.

Moves towards rezoning the land for industrial use are now underway. The site is located in an established industrial area with excellent road transport links. There is scope for designing and building industrial properties to tenants requirements as well as creating new industrial lots.

Mr Laurie McGill, National Operations Manager with Peet said the company was exploring a wide range of residential/retail/commercial projects across Australia.

New fund buys in WA

The Peet Income Property Fund, a new unlisted property fund recently launched by Company Ltd has Peet $&$ announced its latest acquisition, a fully leased industrial property in Western Australia.

The industrial office, warehouse and food processing facility in the popular industrial area of Canning Vale has been purchased by the Fund for $$3,25$ million,

The property at 30 Magnet Road shows a yield on purchase of 9.27 per cent. It is leased to Canon Foods Services Pty Ltd for 15 years with two further five year options and CPI increases each year, with an upwards only market review each five years.

The previous purchase of five commercial office properties in the Brisbane Technology Park for $19 million by the Fund had been announced earlier.

The Fund is forecast to provide distribution vields of 8.75 % per annum payable ouarterly and a tax deferred component in excess of 100% for the year until June 30, 2006.

The open ended structure of the Fund allows for the acquisition of further quality assets which will provide tax effective income distributions to unit holders as well as the potential for capital growth.

"We will seek to add further quality assets to the Fund as it grows in order to deliver regular income from sound properties in desirable markets. The management style of the fund is to purchase assets that will be held as long-term investments," said managing director of Peet & Co Ltd, Warwick Hemsley.

Copies of the Fund Product Disclosure Statement can be obtained from Philip Ragan PIPF Manager by email at philipr@peet.com.au.

Retirement plans

A detailed review of all Peet & Company Ltd land holdings across Australia has earmarked a range of sites suitable for developing retirement villages.

Stephen Kenny, general manager retirement housing, said that for those sites where work can begin reasonably ouickly, in-depth local research and initial planning and feasibility work has begun to ensure that the most appropriate retirement housing product will be developed for each location.

"Work is also being carried out to identify alternative retirement housing models, including smaller scale developments, which will appeal to a wider market and will be suitable for inclusion in other Peet land estates," Mr Kenney said.

Kenya startof city study

Travel to Kenya to study the effects of mass migration into cities is the aim of Meagan Merritt, the winner of an industry Young Professionals award, sponsored by the Victorian Planning and Environmental Law Association (VPELA) and Peet & Company Ltd.

The award is designed to assist a young professional member of VEPLA to undertake a study tour, independent research or course study which advances professional σſΞ knowledge and awareness in planning and environmental issues.

Meagan will study the effects on living standards of the mass migration of rural dwellers into cities as is occurring in Kenya. She hopes the experience will help her better understand how to plan for Melbourne's population increase of one million by 2030.

Meadan Memitt, whiner of the Young Professionals award receives her plaque from Anthony Lennon, a director of Peet & Company Ltd, an award sponsor.

安盛

Foulable covedal video will make Purns Beach Estate much sounds after

he first homesites have sold in a major new seaside residential development, Burns Beach Estate, 28 km north of the Perth CBD.

The masterplanned estate which boasts unparalleled ocean views from its enviable coastal position will eventually house up to 1.500 families.

Peet and Company Ltd is project managing the development on behalf of its owners, the

Burns Beach Property Trust which comprises about 500 WA individuals and families who have an interest in the land parcel acouired about 35 years ago.

Extensive public consultation was held to determine the best residential development to suit community needs and stringent environment planning is in place to protect the natural environment.

The owners of the land have ceded 144ha or almost half of the 291 ha privately owned land parcel in order to create a huge greenbelt link

with the Neerabup National Park and adjoining crown land.

The remaining 146ha of land has become Burns Beach Estate with big areas of public open space, a foreshore reserve with walking and cycling paths, a boulevard style entrance that leads to the coast and an attractive foreshore promenade.

The range of parks and public open space in the new estate will benefit residents in surrounding suburbs and provide valuable housing stocks in a northern corridor where demand is already very strong.

Long term investorsreap benefits

With the new Burns Beach Estate poised to become a popularW new seaside residential development north of Perth and Carramar Golf Course Estate being one of the best selling estates in Perth's northern corridor the spotlight is on two of the oldest land syndicates/trusts managed by Peet.

Burns Beach Property Trust which holds the prime coastal land now starting development north of Burns Beach Road has held this land from around 1970. The first distributions to this trust started in 1991.

Yatala Unit Trust which owns the land being developed as the award-winning Carramar Golf Course Estate was formed around 1976 with first distributions beginning in 1995, This estate has a further 750 lots to be developed and it is likely the unit holders will continue to receive dividends for the next 4 to 5 years.

Both tracts of land were marginal farmland/bushland at the time they were purchased for future development potential at prices which seem very small by today's standards.

Unit holders in both trusts have worked with Peet & Company executives over the years in the management and guidance of their land holdings through the various development steps.

The unit holders have benefited substantially from the growth in land values as Perth has grown and the potential of the properties for residential development has been realized.

Peet is seeking expressions of interest from investors who may be interested in syndicates which focus on longer-term land acquisitions (ie, seven or more years until development) begins) in areas around capital cities that are likely to have potential for the future.

Please contact your nearest Peet office for details.

Profit alread of target - (Continued from front page)

Additionally, the company acquired five modern commercial properties in the Brisbane Technology Park and an industrial property in Canning Vale, Western Australia. These properties now form part of the Peet Income Property Fund, a new unlisted property fund launched by the company in the last quarter of the 2005 financial year.

Mr Hemsley said that key positive contributors to the company's ongoing success were:

• * a strong balance sheet;
• low level of gearing:
• bank facilities of which a significant. amount remains unutilised:
• respected management capability;
• expected continued favourable economic conditions in Western Australia; and
• -expected stable market conditions in ---Victoria and Queensland.

"We remain well positioned to continue to grow our business through new land syndicates, more joint venture projects and expansion of the income property funds management business with many opportunities within our land bank for retail centres, medical centres, child-care centres and retirement housing opportunities.

"We are targeting net profit after tax growth of 10% for the year ending June 30, 2006. The target is based on a continuation of present underlying market conditions."

Published by Peet & Company Ltd (est. 1895), 200 St George's Terrace, Perth, WESTERN AUSTRALIA 6000, Tel. (08) 9420 1111 Level 1, 436 St Kilda Road, Melbourne, VICTORIA 3004. Tel. (03) 9868 5900 ■ 1 Eagle Street, Brisbane, QUEENSLAND 4000, Tel. (07) 3360 0250 www.peet.com.au Email peetco@peet.com.au

While every care is taken by the publisher and authors, no person or corporations should act on the basis of the information supplied without considering and, if necessary, taking appropriate protessional advice. No werrany of accuracy or retability is given or implied and we discleim all liability for any errors, ornission, loss or other consequences which may arise from the published material.