Strategic goals for its Retirement business and delivery of strong performance in FY18: Aveo Group’s (ASX: AOG) stock soared up 7.9% on August 15, 2018, prior to market close, as the group delivered 44% growth in the FY18 statutory profit after tax of $365.1 million. This is driven by a 40% profit rise from the Group’s retirement business along with the continuing revaluation uplifts in the retirement portfolio and the sale of the Gasworks complex at Newstead, Brisbane at a significant premium to its book value.
The underlying profit after tax and non?controlling interest is up 17% to $127.2 million driven by the delivery of 506 new units and Newstead achieving higher than expected development margins. Further, in FY 18, the funds from operations (FFO) are in line with settlements at $115.4 million ($163.9 million in FY17) and the company posted net tangible assets per stapled security of $3.92, which is up 16% from 30 June 2017.
Moreover, AOG as per strategic review considers that the market is significantly undervaluing AOG’s retirement business as the company’s stock currently trades at a 44% discount to NTA and is trading on a FY19 earnings yield of more than 9%. In addition, the company will undertake the review of the factors likely affecting the current discount to NTA. Additionally, in 2019, AOG reconfirmed EPS guidance of 20.4 cps and is targeting a full year distribution based on a payout range of 40% ? 60% of underlying profit. Meanwhile, AOG stock has fallen 18.15% in three months as on August 14, 2018 and is trading at a P/E of 4.53x.
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