Aspen Group (APZ) H1 2025 earnings summary

Executive summary

• Achieved comprehensive income of AUD 0.21 annualized, representing a 20% return on book equity, consistent with the five-year average.

• Delivered strong HY25 results with 31% growth in underlying operating earnings and 40% increase in statutory net profit year-over-year.

• EPS for the HAF was AUD 0.081 per share, up 18% year-over-year, in line with historical growth rates.

• Recorded profit attributable to unit holders of $8.006 million for the half-year ended 31 December 2024, compared to $8.202 million for the prior corresponding period.

• Upgraded FY25 guidance, forecasting underlying EBITDA up 29%, EPS up 21%, and DPS up 18% compared to FY24.

Financial highlights

• HY25 underlying operating earnings rose to $16.14m, up 31% year-over-year; underlying EPS increased 18% to 8.07 cents.

• Net rental income grew 13% to $17.18m; development profit surged 68% to $5.45m.

• NAV per security (pre-DTL) increased 7% to $2.39; total property and inventory book value up 5% to $593m.

• Distribution of 5.00 cents per security declared for the half-year, up from 4.25 cents in the prior period.

• Gearing reduced to 21%, well below the long-term target of 30-40%.

Outlook and guidance

• Upgraded underlying EPS guidance to AUD 0.167 for FY, with underlying EBITDA of AUD 41.5 million and DPS of AUD 0.10.

• FY25 NRI forecast at $35m, with long-stay occupancy and rental growth expected to remain solid due to low vacancy and limited new supply.

• Targeting 110 settlements in FY25, 140 in FY26, and 170 in FY27; 2H settlements and contracts on hand represent 84% of 2H forecast development profit.

• Board expects distributions payable at 31 December 2024 to be funded from existing cash reserves or available financing facilities.

• Growth opportunities increasing, especially in developing new accommodation and acquiring properties below replacement cost.