Aspen Group FY24 Results: Strong Performance and Positive Outlook for FY25
APZ (APZ) Share Update August 2024 Thursday 15th
Aspen Group Reports Strong FY24 Results and Upgrades FY25 Guidance
Aspen Group (ASX: APZ) has reported impressive financial results for FY24, showcasing significant growth across its platform. The company has also upgraded its earnings and distribution guidance for FY25, reflecting continued confidence in its strategic direction.
Instant Summary:
- Total portfolio rent increased by 15% to $317 per week per dwelling/site.
- Residential rent rose by 20% to $348 per week per dwelling.
- Lifestyle rent increased by 16% per land site.
- Property NOI margin improved by 2 percentage points to 50%.
- Lifestyle development profit doubled, with sales volume up 64% and average sales price up 14% to $418k.
- Developed stages of Residential land essentially sold out, with average sales price increasing by 13% to $200k.
- Net asset value increased by 11% to $2.23 per security.
- Underlying Operating Earnings up 15% to 13.81 cents per security.
- Distribution of 8.50 cents per security, with 89% tax deferred.
- Upgrade to FY25 guidance: Underlying Operating EBITDA of $40m, Underlying EPS of 15.2 cents, and DPS of 10.0 cents.
FY24 Financial Performance
Aspen Group has delivered a strong financial performance in FY24, with significant growth across various metrics. The total portfolio rent increased by 15% to $317 per week per dwelling/site, while residential rent rose by 20% to $348 per week per dwelling. Lifestyle rent also saw a 16% increase per land site.
The Property NOI margin improved by 2 percentage points to 50%, driven by better operational management and structural improvements in the portfolio. The company achieved record production, sales, and average prices for new developments. Lifestyle development profit doubled, with sales volume up 64% and average sales price up 14% to $418k, still well below local median house prices and some competing villages.
Asset Value and Earnings
Net asset value increased by 11% to $2.23 per security, reflecting the company's strong balance sheet and disciplined acquisitions and disposals. Underlying Operating Earnings rose by 15% to 13.81 cents per security, supported by a 27% increase in Net Rental Income to $30.8m and a 39% rise in Development Profit to $8.7m.
The company maintained a strong balance sheet with gearing of 26% and an interest cover ratio of 3.7x. Total Comprehensive Income before tax was $69.9m, up 12% on the previous corresponding period (pcp), while Statutory Net Profit was $48.4m.
Positive Outlook for FY25
Looking ahead, Aspen Group has upgraded its guidance for FY25, expecting continued strong performance. The company forecasts an Underlying Operating EBITDA of $40m, up 24% on FY24, and an Underlying EPS of 15.2 cents, up 10% on FY24. The Distribution Per Security (DPS) is projected to be 10.0 cents, an 18% increase on FY24.
The company has a low-cost pipeline of 1,152 approved sites already on the balance sheet, equating to 12x FY24 sales. Risks are mitigated through a diversified portfolio spread across nine active projects, ensuring resilience against geographic, regulatory, customer, and builder-related risks.
The strong FY24 results and upgraded guidance for FY25 are likely to positively impact Aspen Group's stock price. Investors may respond favorably to the significant growth in rents, development profits, and asset values. The company's disciplined approach to acquisitions and disposals, along with its strong balance sheet, further enhances investor confidence.
Investor Reaction:
Analysts are expected to react positively to Aspen Group's strong financial performance and upgraded guidance. The company's ability to maintain competitive rents and sales prices while achieving significant growth is likely to be well-received. However, some analysts may keep a cautious eye on the broader market conditions and potential risks associated with development projects.
Conclusion:
Investors should consider Aspen Group's strong FY24 performance and positive outlook for FY25 when making investment decisions. The company's strategic direction and disciplined approach to growth position it well for continued success. Stay informed on Aspen Group's developments and market trends to make informed investment choices.