Perth-based property firm Aspen Group Ltd has announced a 248 per cent net profit increase to $34.5 million, after attaining significant revaluation gains from its balance sheet portfolio.
Perth-based property firm Aspen Group Ltd has announced a 248 per cent net profit increase to $34.5 million, after attaining significant revaluation gains from its balance sheet portfolio.
The strong earnings performance resulted in Aspen delivering a 20 per cent increase in distributions per security to its investors. The 10 cents per security distribution was wholly from the Aspen Property Trust, and was comfortably within the underlying EPS result of 12.81 cents.
Acquisitions in the company's managed funds totalled over $140 million during the 2005-06 financial year, with Aspen's diversified property fund growing significantly in its first 12 months.
With the current gearing position of the Group now at 32 per cent, Aspen is looking to capitalise further in 2007 on this efficient and effective use of the Group's strong financial platform.
ASPEN GROUP ANNOUNCES STRONG FULL YEAR RESULT
AIFRS Earnings Results
- Net profit increase of 248% to $34.5 million
- Earnings Per Security increase of 105.8% to 23.92 cents
Underlying Operating Earnings Results
- Total revenue increase of 76% to $35.98 million
- Net profit increase of 148% to $18.5 million
- EPS increase of 46.4% to 12.81 cents
- Increase in distributions per security of 20% to 10 cents
- Net tangible assets increase 34.6% to $1.09 per security
- EPS exceed Distributions by 2.81 cents per security
Other Key Results
- Significant revaluation gains from balance sheet portfolio
- Gearing reduced from 59% to 32% post June 06 capital raising
- Funds Management income increased by 246% to $13.8 million following growth in funds management business
- Capital raised $112 million
- Acquisition of Dunsborough Lakes Golf Course Estate and successful syndication to sophisticated investors
Aspen Group today announced another year of significant growth in earnings and assets under management. The net profit result of $34.5 million was up 248% on the previous period, which included revaluation adjustments to its property portfolio, and up 148% on the underlying operational earnings to $18.46 million.
The result means that Aspen has delivered a CAGR for EPS and DPS of 20.1% and 21.3% respectively since Aspen's inception in 2002.
The increase in underlying EPS of 46.4% to 12.81 cents was largely attributed to strong earnings growth in its now established funds management business, as well as continuing strong rental income performance derived from its property portfolio.
The strong earnings performance resulted in Aspen delivering a 20% increase in distributions per security to its investors. The 10 cents per security distribution was wholly from the Aspen Property Trust, and was comfortably within the underlying EPS result of 12.81 cents.
In 2006 Aspen Group continued to receive excellent investor support from both institutional and retail investors. Aspen undertook three institutional placements during the year with the purposes of funding the expansion of its funds management business, acquisition of investment properties and maintaining the Group's low gearing level.
With a long term full hedged gearing position of 32%, Aspen Group's Managing Director, Mr Angelo Del Borrello, commented that the business was extremely well positioned to capitalise on future growth opportunities.
"With a conservatively geared and hedged balance sheet and significant deal flow opportunities, the Group is very well positioned to continue our impressive earnings and total shareholder return growth".
In March, following a period of sustained growth in the Aspen share price and market capitalisation, Aspen Group announced it's inclusion in the ASX All Ordinaries Index, which consists of the largest 500 companies listed in Australia by market capitalisation.
Aspen's active management style has resulted in reduced vacancy levels across the portfolio compared to the prior year. The improved tenancy profiles and commercial exposure to the buoyant Western Australian market, have contributed to revaluation gains of almost $30 million before tax reported for the year.
Mr Del Borrello noted that the gains reflect well on Aspen's in-house ability to add value to a multi tenanted property though active property management.
As a result of these revaluations and equity placements undertaken, the Net Tangible Asset backing of the Group's securities increased 34.6% to $1.09 subsequent to the most recent capital raising.
Aspen's predominantly open ended fund style continues to produce strong results, with acquisitions into these funds totalling in excess of $140 million during the period. Aspen parks continues to be a major participant in the caravan park sector, and has grown the fund to $100 million and 14 parks.
Launched in June 2005, Aspen's Diversified Property Fund has also grown significantly in its first 12 months, and currently has assets of approximately $140 million across three states.
Another significant development has been Aspen Group entering into the syndicated land subdivision sector, through the acquisition of the Dunsborough Lakes estate in South Western Australia. This exciting land subdivision project was acquired for $93.7m in January 2006. Aspen has taken a 20% cornerstone position and the performance of the fund thus far has substantially exceeded all performance targets.
Another positive result during the period was the rezoning of Aspen Living Villages No 2 fund in Karratha Western Australia.
"Underpinning all the funds management growth has been the strength of the Aspen Group balance sheet, which has enabled the acquisition of several assets to be secured prior to wholesale syndication or retail fund raising" , said Mr Del Borrello.
With the current gearing position of the Group now at 32%, Aspen is looking to capitalise further in 2007 on this efficient and effective use of the Group's strong financial platform.
The past 12 months has seen Aspen continue its impressive profit and distribution performance. With a fully hedged gearing level of 32%, Aspen's sound financial platform provides the Group with the capacity to continue to successfully apply its business model to deliver strong future earnings and asset growth.
