Eureka Group (ASX: EGH) likely to benefit from acquisition-focused growth strategy

Highlights

• EGH has acquired a seniors’ rental village in Mount Barker, increasing its portfolio by 55 units to a total of 2,890.
• In FY24, EGH's revenue rose by 13% YoY to AUD 41.1 million, with a 20% YoY surge in underlying EBITDA to AUD 15.2 million.
• EGH plans to install solar power systems in at least 50% of its villages by 2025.

Eureka Group Holdings Limited (ASX:EGH) is an ASX-listed company that offers independent rental accommodation to independent retirees who are supported by the Australian Government pension. Recently, the company announced the completion of acquisition of a seniors’ rental village in Mount Barker, South Australia. This deal was first announced on 31 October 2024. This transaction marks the inaugural purchase, and it has been funded by the proceeds from its recent AUD 70.4 million capital raising. With this acquisition, the company’s portfolio has increased by 55 units, taking the total units under management to 2,890.

Financial performance in FY24

In the financial year 2024 (FY24), EGH’s revenue jumped 13% YoY to AUD 41.1 million, underlying EBITDA increased by 20% YoY to AUD 15.2 million and underlying profit before tax grew by 13% YoY to AUD 9.1 million. FY24 performance was supported by rental increases, sustained resident demand and targeted acquisitions.

The reported period saw substantial expansion with capital improvements, acquisitions, developments and revaluations, resulting in 31% YoY increase in assets under management.

Top 10 shareholders of EGH

The top 10 shareholders of EGH have around 77.18% of the shareholding. Filetron Pty Ltd. and Aspen Group Ltd have the highest stake in the firm with a shareholding of ~26.66% and ~17.83%, respectively.

Outlook

The company is focused on energy conservation by continuing the village solar programs and aims at installing solar power systems in minimum 50% of its villages by the end of 2025.

Furthermore, EGH intends to explore future funding options for development opportunities and forthcoming acquisitions.

Share performance of EGH

EGH shares closed at AUD 0.59 apiece on 3 December 2024. Over the past one year, EGH’s share price has increased by nearly 41.93%, while in the past three months it has dropped by 5.75%.

52-week high of EGH is AUD 0.70, recorded on 28 October 2024 and 52-week low is AUD 0.41, recorded on 13 December 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 03 December 2024. The reference data in this report has been partly sourced from EODHD/Others.

Disclaimer

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