Stocks impacted by Bushfire - INA, FNP, APZ and VTH

Bushfires have ravaged large parts of Australia affecting the lives of humans and animals. The ongoing wildfire, which is spreading day by day and has not shown any signs of subsiding, has affected the business of many companies. In the below article, we will be looking at some of the companies whose business have been impacted by the bushfire.

Ingenia Communities Group (ASX:INA)

Ingenia Communities Group is the owner, operator and developer of quality, affordable Australian seniors living accommodation as well as holiday communities.

How Bushfire has impacted the company’s Communities?

The company, on 07 January 2020, notified the market participants about the recent bushfire and outlined the following:

• The company stated that no tourism parks of the group or those owned by the company’s managed funds have experienced significant fire damage.
• Nevertheless, two resident-owned homes of the company were destroyed at Ingenia Lifestyle Lake Conjola.
• In order to ensure the safety of residents and guests, the management teams have worked tirelessly throughout the three communities owned by the company and the five communities owned by the managed funds of the Group.
• With respect to the outlook, Ingenia stated that considering the dearth of services as well as doubt over the future situation, it is not yet known when the tourism parks would return to normal trading conditions.
• Tourism revenue throughout three South Coast tourism parks of the company is expected to be adversely impacted by around $2 million or even more.

The stock of INA was trading at $4.620 per share on 10 January 2020 (at 3:17 PM AEDT), an increase of 0.873%. The stock delivered returns of 11.51% and 40.93% in the span of three months and six months, respectively.

Freedom Foods Group Limited (ASX:FNP)

Freedom Foods Group Limited focuses on the production, sales, and marketing and distribution of specialty cereals, snacks, plant-based products, and dairy products.

No Direct Impact by Bushfire

• The company, through a release dated 08 January 2020, stated that recent Victorian and New South Wales bushfires had not directly impacted any of its dairy farms or site operations.
• All sites continue to remain fully operational and the supply of milk remains in a strong position.
• Freedom Foods experienced no interruption to daily deliveries, but it continues to monitor the situation. In addition, Australian Fresh Milk Holdings operations have not been impacted by the fire. The company has 10% shareholding in Australian Fresh Milk Holdings, which is a leading producer of dairy milk in Australia.

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In another update, the company notified the market that it had entered into a new ‘syndicated’ banking facility with its long term banking partners, HSBC and NAB, which led to the replacement of the current ‘club’ facility, which was due to expire in December 2020.

The stock of FNP was trading at $4.970 per share on 10 January 2020 (at 3:17 PM AEDT), an increase of 5.970%. The stock delivered negative returns of 8.40% and 3.70% in the span of three months and six months, respectively.

Aspen Group (ASX:APZ)

Aspen Group, listed on the ASX since 1991, makes investments in the affordable accommodation sector.

Revenue and NOI to be Impacted

• Aspen Group, via a release on 06 January 2020, stated that there was no damage to its properties due to the recent bushfire. Though, the business got considerably affected during this peak holiday season at Barlings Beach and Tween Waters, the company’s two NSW South Coast properties
• The company anticipates revenue and net operating income from the combined properties to be adversely impacted by a minimum of $500,000 due to the bushfire at this stage. It is difficult though to project the longer-term impacts taking into account the damage to the region, which includes loss of houses and businesses.
• Subject to review as well as an assessment of its claim by its insurers, the company retains insurance over its property assets and gross profits and might be able to successfully recover some of the losses.

In another update, the company announced that it would implement the Capital Reallocation Proposal which was approved by security holders at the 2019 annual general meeting. The company would implement a reallocation of capital from Aspen Property Trust to Aspen Group Limited of up to 31.000 cents per APT unit which amounted to around $30 million.

The stock of APZ was trading at $1.200 per share on 10 January 2020 (at 3:17 PM AEDT), in line with the previous day’s close. The stock delivered returns of 4.35% and 9.09% in the span of three months and six months, respectively.

Vitalharvest Freehold Trust (ASX:VTH)

Vitalharvest Freehold Trust, managed by goFARM Asset Management, is an Australia-based managed investment scheme. The company aims to offer unitholders exposure to real agricultural property assets whose earnings profile, as well as underlying value, are exposed to the growing global agricultural demand for nutritious, healthy food.

Effect of Bushfire

• The company recently announced that the bushfire, which is currently torching the southern NSW, has affected the Tumbarumba berry farm, which equates to around 6% of berry plantings of the company.
• In addition, assets such as packing equipment and vehicles, that are owned by the tenant, were also damaged.

The stock of VTH was trading at $0.765 per share on 10 January 2020 (at 3:17 PM AEDT), an increase of 1.325%. The stock delivered negative returns of 17.03% in the span of three months as well as six months.

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