Ageing Population related companies

Hi Jacky,

A lot of questions in here, we could write a whole morning report and not cover them all, hence please excuse brevity of each answer. Firstly, the ageing population is not a new investment angle and over the last few years we feel it’s actually weighed on portfolio returns as investors felt it was the easy thematic to make money by that brings with it competition and tighter margins:

• Eureka Group (EGH) – A $230n company which offers rental units designed for independent seniors, apparently ensuring affordability and a comfortable living environment. For the first half of FY25 its NPAT of $6.4mn, was stable compared to $6.3mn in 1H24, it looks ok in 55c region as it looks to grow by strategic acquisition, but we see no compelling reason to be buyer.
• Lifestyle Communities (LIC) – this $500mn business focuses on development, ownership, and management of affordable independent living communities for individuals aged 50 and over. However, it endured a shocking few years with its share price crashing over 80%. This week it tumbled 40% after a Victorian ruling which found its Deferred Management Fee (DMF) clause was void and unenforceable – LIC are happy to take $ on the way in but residents aren’t happy with the murky fees when it comes time to sell – MM has no interest in this LIC. We don’t like companies that do not discolose fee structures in a clear and transparent way, arguably aiming to make $ from residents when they could be at their most vulnerable.
• Propel Funerals (PFP) – This $635mn funeral operator has fallen ~30% from this year’s high after providing guidance well below expectations in May. PFP is still profitable but competes in a relatively niche but increasingly competitive sector: funeral, cremation, and related services. Invocare is its main competition through White Lady Funerals, Simplicity Funerals, and Le Pine. Also, new on-line disruptors like Bare Cremation and EziFunerals offer cheaper, direct-to-consumer services which are also weighing on margins. PFP is too hard for us right now.
• Ingenia Communities (INA) – a great example of the strong getting stronger with this $2.1bn diversified real estate investment trust which specialises in residential communities for over 55’s and holiday accommodation retirement living business trading higher over the last few years. Bloomberg has its Est. EPS at 0.30x while Refinitiv who provides the data feed for the MM Site has it at 0.03x, in this case we side with Blomberg. INA is the pick of a bad bunch, but we don’t see significant upside above $5 with its yield only ~2.2%.
• Gemlife Communities (GLF) – this new $1.5bn communities’ business is a developer and operator of luxury lifestyle communities tailored for Australians aged 50 and over. These communities, known as land lease communities, offer a modern alternative to traditional retirement villages. Residents purchase the homes but lease the land on which they sit, reducing upfront costs and ongoing expenses. This is wait and see for MM, it’s only been trading for a few weeks.

We’ll look to de a report on the sector in the coming weeks.

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Lifestyle Communities (LIC)

LAST UPDATED 09/07/2025 16:18

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Lifestyle Communities (LIC)

LAST UPDATED 09/07/2025 16:18