This article is from the Australian Property Journal archive
ASPEN Group has credited strong rental increases and a 47% growth in funds management for the company's continued solid performance in the last 12 months ended June 30.
Aspen has reported an underlying net profit after tax of $43.8 million for FY08, an increase of 30.8% when compared with $33.5 million in FY07.
The company’s AIFRS FY08 adjusted net profit after tax was $70.8 – down from $73.8 million as project revaluation gains recorded this year totalled $33.7 million compared last year’s gain of $46.1 million.
The FY08 result was backed by a 28.2% growth in total underlying operating revenue to $76.9 million from $60 million in the previous year. Underlying earnings per security was 17.01 cents up from 15.62 cents.
Aspen has declared a distribution of $15.50 cents for the year up from 12.75 cents.
Managing director Angelo Del Borrello said the results reflect a sound performance of Aspen’s property portfolio and continued growth within its funds management division.
“Aspen’s ability to maintain its track record of consistent earnings and distribution growth in a more challenging economic climate is sound endorsement of the robust nature of our business,”
Del Borrello said the company was able to capitalise on firm commercial property markets and as a result rental growth, excluding one off items was up 8% – benefiting from the exposure to the strong Perth and Adelaide CBD office markets.
The company’s funds management income jumped 47.1% to deliver at $35.8 million for the period. The division was boosted by the first full year contribution of its Aspen Development Fund No.1 which was established in May 2007, while the growing asset base of the
Group’s Aspen Parks and Aspen Diversified funds led to higher management fee income.
Aspen’s investment portfolio provided earnings of $5.3 million, a 69.6% increase over the previous corresponding period.
During the period, the company increased gearing by 6.4% from 31% in FY07 to 33% but at the same time gross assets under management jumped 18.2% to $1.44 billion from $1.22 billion. And as a result, net tangible assets per security rose by 6.8% to $1.41 from $1.32.
Del Borrello said the gearing level remains at the lower end of Aspen’s target range whilst achieving moderate growth in assets under management.
Approximately 54% of the group’s core debt is hedged, with an average weighted term of 2.6 years at an attractive rate, inclusive of margin, of 6.56%. The Group’s total weighted average cost of debt as at year end was 7.46%.
Del Borrello said Aspen Living continues to experience difficult trading conditions during the period with higher interest rates and weak residential markets across the board inhibiting lot sales.
But he added Aspen Living retains a strong pipeline of over 4000 urban zoned lots, and remains well positioned to benefit from a pick up in market conditions in what is typically a very cyclical business.
“As we enter FY09 signs are emerging of a lower interest rates environment, providing a more positive backdrop to reinvigorate lot sales once again,”
Going forward, he forecasts the company will maintain its current distribution rate into FY09.
“The challenges of the 2008 financial year have been well documented and the board shares the disappointment of all securityholders in the decline in the group’s security price which has been mirrored by the broader market.
“That said, the board remains very confident that the quality of the Aspen business model will underpin the continuation of the group’s impressive performance track record,” he concluded.
The good news lifted APZ shares 4 cents higher yesterday to close at $1.41.
Australian Property Journal
