Aspen Group (ASX:APZ) revenue up 27% in Q1-FY22


  • Aspen is concluding FY21 with the AGM announcement today on ASX.
  • ASX:APZ shares an update on Q1-FY22.
  • APZ has recorded a 27% growth in Q1-FY22 despite COVID-19 disruptions.

Commercial property investment company Aspen group (ASX:APZ) has shared the Q1-FY22 update before AGM for FY21. It claims to have performed reasonably in Q1-FY22, given the operational challenges it faced. Total Revenue for APZ was up 27% from the previous comparable period. However, operating EPS was negatively impacted by the acquisition in September 2022.

More on Aspen’s Q1-FY22 performance

Aspen is a quality accommodation provider in residential, retirement and park communities. APZ's fully integrated platform helps with its operations, asset management, development, and capital management. In Q1-FY22, APZ managed to increase revenue despite a challenging operating environment-

  • APZ's rental and ancillary services revenue are up 4.7% due to higher contributions from Darwin freespirit resort (DFR) and APZ's latest acquisitions of Uniresort and Lewis Fields. However, it was offset by a material decline in Aspen Karratha Village (AKV) revenue post expiry of the Woodside lease.
  • Aspen's net operating income went down 5.6% in Q1-FY22 as the margin declined from 47 to 43%. Margin reduction was caused by a change in business mix and cessation of JobKeeper receipts.
  • However, APZ's net development & trading income was up 63% as it sold nine houses, majorly from its Perth house portfolio.
  • Still, the operating EPS of APZ in Q1-FY22 went down 4.8%, being impacted by the acquisition of Perth Apartment Portfolio (PAP) in September. The purchase did not contribute enough to earnings.

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How was previous year; FY21 for Aspen?

  • In FY21, Aspen produced underlying earnings of 7.73 cents per security, at a growth of 14% on FY20. It also distributed 6.60 cents per security, i.e., a 10% growth in dividends. The Net Asset Value for APZ also increased by 14%.
  • APZ thus registered a satisfactory performance during the FY21 achieved from a highly diversified portfolio of quality accommodation, firmly underpinned by household incomes, including government subsidies.
  • In FY21, revenue from short-stay guests at APZ's holiday parks was negatively impacted by travel restrictions. Still, it managed profitability. A 20% decline in the average room rate was offset by a similar increase in occupancy alongside reduced operating costs, which led to higher profitability.

Aspen’s outlook for full year FY22-

  • Aspen expects the profitability of its parks portfolio to improve in the next 12 months as vaccination rates increase and travel restrictions subside. APZ has high hopes for its assets near the NSW-Victoria border and Adelaide Caravan Park.
  • Its development and trading activity has increased materially over the past two years, and it predicts continuity in growth.

Bottom line

APZ's accumulated quality pipeline of approved low-cost, residential and retirement sites have positioned it well for growth. In addition, its diversified portfolio and cost management strategies have helped it remain resilient throughout the pandemic. 

On ASX today, APZ shares are trading flat at AU$1.550 per share.

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