The St. Joe Company Reports Fourth Quarter and Full Year 2023 Results and Declares a Quarterly Dividend of $0.12
- Revenue increased by 54% to $389.2 million in full year 2023 compared to 2022.
- Operating income rose by 48% to $90.7 million in full year 2023 compared to 2022.
- Net income attributable to the Company increased by 10% to $77.7 million in full year 2023 compared to 2022.
- The Company invested $217.8 million in its business in 2023.
- Joint ventures contributed $22.7 million in pre-tax income for the Company.
- Record residential homesite sales were achieved in 2023.
- Hospitality revenue reached a single-year record of $152.4 million in 2023.
- The Company's commitment to disciplined capital allocation and shareholder value creation is highlighted.
- None.
Insights
The reported increase in revenue and operating income for the full year 2023 is a strong indicator of the company's growth trajectory. A 54% surge in revenue, accompanied by a 48% rise in operating income, signifies robust demand for the company's offerings, particularly in real estate and hospitality segments. This performance is especially noteworthy given that it was achieved despite the new hotels and leasing properties not operating for the full year. The company's emphasis on recurring revenue streams appears to be paying off, as evidenced by the record revenue in hospitality and leasing.
However, the 10% increase in net income attributable to the company, while positive, is relatively modest compared to the revenue and operating income growth. This suggests that there might be increased costs associated with the rapid expansion, or other factors that are affecting the bottom line. The mention of significant investments in the business, to the tune of $217.8 million, also implies a strategic focus on long-term asset growth over short-term profitability. Investors might view this as a commitment to sustainable growth, although it's important to consider the implications of such heavy capital expenditure on future cash flows and debt levels.
The performance of The St. Joe Company is indicative of broader trends in the real estate and hospitality markets, particularly in Northwest Florida. The increase in real estate revenue by 60% and hospitality revenue by 57% reflects a strong market demand, likely driven by the influx of visitors and new residents, as mentioned by the CEO. The sustained growth in these segments underscores the region's appeal and the company's effective capitalization on this trend.
From a market perspective, the company's strategic investments in joint ventures and the reported record revenue from these unconsolidated entities are significant. Doubling of the revenue from unconsolidated joint ventures suggests successful leveraging of partnerships to expand the company's market presence without diluting control. The company's ability to generate substantial financial returns from these ventures is a positive sign for investors looking for companies with diversified revenue sources and strategic growth initiatives.
The reported increase in residential homesite sales and the record-setting pace indicates a thriving residential market segment for The St. Joe Company. The average sales price increase from approximately $98,000 in 2022 to approximately $107,000 in 2023, along with the volume increase, points to a healthy appreciation in property values and strong market demand. The investment of $74.4 million in the residential segment to meet homebuilders' demand underlines the company's commitment to capitalizing on this demand.
It's also worth noting the strategic positioning of the Latitude Margaritaville Watersound unconsolidated joint venture, which appears to be a significant contributor to the company's residential segment performance. The expectation of a sales value of approximately $451.0 million from homesites and homes under contract is an indicator of the company's strong future revenue potential in this area. Investors with an interest in real estate development would likely find these details compelling when considering the company's prospects for sustained growth and profitability in the real estate sector.
Highlights for the full year 2023 as compared to full year 2022:
-
Revenue increased by
54% to$389.2 million $252.3 million
-
Operating income increased by
48% to$90.7 million $61.4 million
-
Net income attributable to the Company increased by
10% to$77.7 million $70.9 million $16.2 million $7.3 million
Jorge Gonzalez, the Company’s President and Chief Executive Officer, said, “During 2023, we invested an additional
Mr. Gonzalez continued, “We have created meaningful profitability through joint ventures over the past several years. As of year-end 2023, we had
Mr. Gonzalez concluded, “I’m pleased with our overall performance and long-term potential. Demand across each of our segments remains strong, which we attribute to the continued influx of visitors and new residents from all over the country who are discovering the high quality of life offered in
Consolidated Fourth Quarter and Full Year 2023 Results
Total consolidated revenue for the fourth quarter of 2023 increased by
For the full year 2023, total consolidated revenue increased by
Over the past several years, the Company entered into joint ventures which are unconsolidated and accounted for using the equity method. For the three months ended December 31, 2023, these unconsolidated joint ventures had
Net income attributable to the Company for the fourth quarter of 2023 decreased to
For the full year 2023, the Company funded
On February 21, 2024, the Board of Directors declared a cash dividend of
Real Estate
For the fourth quarter of 2023, the Company sold 182 residential homesites and the unconsolidated Latitude Margaritaville Watersound joint venture transacted 139 homes for a total of 321 residential homesites and homes, as compared to 262 residential homesites and 116 homes in the unconsolidated Latitude Margaritaville Watersound joint venture for a total of 378 in the fourth quarter of 2022.
For the full year 2023, the Company sold 1,063 residential homesites and the unconsolidated Latitude Margaritaville Watersound joint venture transacted 641 homes. Together, the homesites and homes increased to the highest single year number in the Company’s history at 1,704 in 2023, as compared to prior single year record of 1,068 in 2022. The 1,068 sales for the full year 2022 consisted of 752 residential homesites and 316 homes in the unconsolidated Latitude Margaritaville Watersound joint venture. Although the mix of homesite sales from different communities impacted revenue comparability between the years, the average sales price increased from approximately
As of December 31, 2023, the Company had 1,486 residential homesites under contract, which are expected to result in revenue of approximately
The Latitude Margaritaville Watersound unconsolidated joint venture, planned for 3,500 residential homes, had 573 net sale contracts executed in 2023. Since the start of sales in 2021, there have been 1,613 home contracts. For the fourth quarter of 2023, there were 139 completed home sales bringing the community to 1,004 occupied homes. The 609 homes under contract as of December 31, 2023, with an average sales price of approximately
Hospitality
Hospitality revenue increased by
Hospitality revenue continues to benefit from the growth of the Watersound Club membership program, the purchase of The Pearl Hotel in December 2022 and the opening of five hotels throughout 2023, which added 646 hotel rooms. As of December 31, 2023, the Company had 3,317 club members, as compared to 2,604 club members as of December 31, 2022, an increase of 713 net new members, a Company single year record. As of December 31, 2023, the Company owned (individually by the Company or through consolidated and unconsolidated joint ventures) eleven hotels with 1,177 operational hotel rooms, as compared to six hotels with 531 hotel rooms as of December 31, 2022. 2024 will be the first full year of operations for these five new hotels completed in 2023. In addition, a new hotel, currently under construction through an unconsolidated joint venture, with 121 rooms, is planned to open in the first half of 2024. When complete, operational hotel rooms are expected to increase to 1,298 rooms.
Leasing
Leasing revenue from commercial, office, retail, multi-family, senior living, self-storage and other properties increased by
Rentable space as of December 31, 2023, consisted of approximately 1,082,000 square feet, of which approximately 1,029,000, or
Corporate and Other Operating Expenses
Full year 2023 corporate and other operating expenses decreased to
Additional Information and Where to Find It
Additional information with respect to the Company’s results for the fourth quarter and full year 2023 will be available in a Form 10-K that will be filed with the Securities and Exchange Commission (“SEC”) and can be found at www.joe.com and at the SEC’s website www.sec.gov. We recommend studying the Company’s latest Form 10-K and Form 10-Q before making an investment decision.
FINANCIAL DATA SCHEDULES
Financial data schedules in this press release include consolidated results, summary balance sheets, corporate and other operating expenses and the reconciliation of earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP financial measure, for the fourth quarter and full year 2023 and 2022, respectively.
FINANCIAL DATA Consolidated Results ($ in millions except share and per share amounts) |
||||||||
|
|
|
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|
Quarter Ended
|
Year Ended
|
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
Revenue |
|
|
|
|
||||
Real estate revenue |
|
|
|
|
|
|
|
|
Hospitality revenue |
35.4 |
|
22.3 |
|
152.4 |
|
97.2 |
|
Leasing revenue |
13.6 |
|
11.0 |
|
50.8 |
|
39.2 |
|
Total revenue |
86.7 |
|
61.6 |
|
389.2 |
|
252.3 |
|
Expenses |
|
|
|
|
||||
Cost of real estate revenue |
14.9 |
|
14.9 |
|
88.0 |
|
50.8 |
|
Cost of hospitality revenue |
29.8 |
|
19.3 |
|
122.2 |
|
77.5 |
|
Cost of leasing revenue |
7.1 |
|
5.0 |
|
25.8 |
|
17.6 |
|
Corporate and other operating expenses |
6.4 |
|
5.6 |
|
23.8 |
|
22.1 |
|
Depreciation, depletion and amortization |
11.2 |
|
6.6 |
|
38.7 |
|
22.9 |
|
Total expenses |
69.4 |
|
51.4 |
|
298.5 |
|
190.9 |
|
Operating income |
17.3 |
|
10.2 |
|
90.7 |
|
61.4 |
|
Investment income, net |
3.5 |
|
2.3 |
|
13.3 |
|
9.9 |
|
Interest expense |
(8.8 |
) |
(5.4 |
) |
(30.6 |
) |
(18.4 |
) |
Equity in income from unconsolidated joint ventures |
4.3 |
|
22.6 |
|
22.7 |
|
26.0 |
|
Other income, net |
-- |
|
7.7 |
|
3.9 |
|
15.7 |
|
Income before income taxes |
16.3 |
|
37.4 |
|
100.0 |
|
94.6 |
|
Income tax expense |
(4.3 |
) |
(9.8 |
) |
(26.0 |
) |
(24.4 |
) |
Net income |
12.0 |
|
27.6 |
|
74.0 |
|
70.2 |
|
Net loss attributable to non-controlling interest |
1.2 |
|
0.5 |
|
3.7 |
|
0.7 |
|
Net income attributable to the Company |
|
|
|
|
|
|
|
|
Basic net income per share attributable to the Company |
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
58,314,117 |
|
58,305,586 |
|
58,312,878 |
|
58,720,050 |
|
Summary Balance Sheet ($ in millions) |
||
|
|
|
|
December 31, 2023 |
December 31, 2022 |
Assets |
|
|
Investment in real estate, net |
|
|
Investment in unconsolidated joint ventures |
66.4 |
50.0 |
Cash and cash equivalents |
86.1 |
37.7 |
Investments – debt securities |
-- |
40.6 |
Other assets |
82.2 |
61.7 |
Property and equipment, net |
66.0 |
39.6 |
Investments held by special purpose entities |
204.2 |
204.9 |
Total assets |
|
|
|
|
|
Liabilities and Equity |
|
|
Debt, net |
|
|
Accounts payable and other liabilities |
58.6 |
94.3 |
Deferred revenue |
62.8 |
38.9 |
Deferred tax liabilities, net |
71.8 |
82.7 |
Senior Notes held by special purpose entity |
178.2 |
177.9 |
Total liabilities |
825.0 |
779.7 |
Total equity |
698.5 |
651.1 |
Total liabilities and equity |
|
|
Corporate and Other Operating Expenses ($ in millions) |
||||
|
Quarter Ended
|
Year Ended
|
||
|
2023 |
2022 |
2023 |
2022 |
Employee costs |
|
|
|
|
Property taxes and insurance |
1.8 |
1.3 |
6.4 |
5.5 |
Professional fees |
1.2 |
1.0 |
4.0 |
3.7 |
Marketing and owner association costs |
0.3 |
0.3 |
1.0 |
1.1 |
Occupancy, repairs and maintenance |
0.1 |
0.2 |
0.4 |
0.7 |
Other miscellaneous |
0.4 |
0.3 |
1.6 |
1.5 |
Total corporate and other operating expenses |
|
|
|
|
Reconciliation of Non-GAAP Financial Measures (Unaudited) ($ in millions) |
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Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure, which management believes assists investors by providing insight into operating performance of the Company across periods on a consistent basis and, when viewed in combination with the Company results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting the Company. However, EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP. EBITDA is calculated by adjusting “Interest expense”, “Investment income, net”, “Income tax expense”, “Depreciation, depletion and amortization” to “Net income attributable to the Company”. |
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|
Quarter Ended |
Year Ended |
||
|
December 31, |
December 31, |
||
|
2023 |
2022 |
2023 |
2022 |
Net income attributable to the Company |
|
|
|
|
Plus: Interest expense |
8.8 |
5.4 |
30.6 |
18.4 |
Less: Investment income, net |
(3.5) |
(2.3) |
(13.3) |
(9.9) |
Plus: Income tax expense |
4.3 |
9.8 |
26.0 |
24.4 |
Plus: Depreciation, depletion and amortization |
11.2 |
6.6 |
38.7 |
22.9 |
EBITDA |
|
|
|
|
Important Notice Regarding Forward-Looking Statements
Certain statements contained in this press release, as well as other information provided from time to time by the Company or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “guidance,” “anticipate,” “estimate,” “expect,” “forecast,” “project,” “plan,” “intend,” “believe,” “confident,” “may,” “should,” “can have,” “likely,” “future” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Examples of forward-looking statements in this press release include statements regarding our growth prospects; expansion of operational assets such as increases in hotel rooms; plans to maintain an efficient cost structure; our capital allocation initiatives, including the payment of our quarterly dividend; plans regarding our joint venture developments; and the timing of current developments and new projects in 2024 and beyond. These statements involve risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements.
The Company wishes to caution readers that, although we believe any forward-looking statements are based on reasonable assumptions, certain important factors may have affected and could in the future affect the Company’s actual financial results and could cause the Company’s actual financial results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company, including: our ability to successfully implement our strategic objectives; new or increased competition across our business units; any decline in general economic conditions, particularly in our primary markets; interest rate fluctuations; supply chain disruptions; inflation; financial institution disruptions; geopolitical conflicts (such as the conflict between
Any forward-looking statement made by us in this press release speaks only as of the date on which it is made, and we do not undertake to update these statements other than as required by law.
About The St. Joe Company
The St. Joe Company is a real estate development, asset management and operating company with real estate assets and operations in
© 2024, The St. Joe Company. “St. Joe®”, “JOE®”, the “Taking Flight” Design®, “St. Joe (and Taking Flight Design)®”, and other amenity names used herein are the registered service marks of The St. Joe Company or its affiliates or others.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221446919/en/
Marek Bakun
Chief Financial Officer
1-866-417-7132
Marek.bakun@joe.com
Source: The St. Joe Company
FAQ
What was the revenue increase percentage for The St. Joe Company in full year 2023 compared to 2022?
How much did the operating income rise by in full year 2023 compared to 2022?
What was the percentage increase in net income attributable to the Company in full year 2023 compared to 2022?
How much did The St. Joe Company invest in its business in 2023?
What was the contribution of joint ventures to the Company's pre-tax income in 2023?
Did The St. Joe Company achieve a record in residential homesite sales in 2023?
