Aspen Group Limited · ASX:APZ
Aspen — FY2023 Earnings Presentation
38 slides from Aspen's earnings presentation, Aug 17, 2023
Slide 1: Aspen Group FY23 Financial Results Presentation
Aspen Group FY23 Financial Results Presentation 17 August 2023 CoVE Cooks Hill
Slide 2: Contents
Contents 1 Aspen’s Business Model Page 3 2 FY23 Results Summary Page 6 3 FY24 Outlook and Guidance Page 15 Business and Property Portfolio Page 17 Appendices Earnings and Balance Sheet Summary Page 34 2
Slide 3: Aspen's Business Model
1 Aspen’s Business Model 3
Slide 4: Aspen's Mission and Integrated Operations, Development and Capital Management Platform
Aspen’s Mission and Integrated Operations, Development and Capital Management Platform Severe (and worsening) Housing Shortages for Portfolio Optimisation Aspen’s Core Customer Base Disciplined acquisitions highly suited to our core customer base Proportion of Rentals Offered at <$400pw in Australia
Slide 5: Some Reasons for Lack of Affordable Housing – Solutions are Scarce
Some Reasons for Lack of Affordable Housing – Solutions are Scarce Population Changing Demographics and Growth Preferences – mismatch between what’s been built v. what’s now in demand Scarcity of Land in Attractive Locations near Amenities and Jobs Developers paying too Lack of Infrastructure much f
Slide 6: FY23 Results Summary
2 FY23 Results Summary 6
Slide 7: FY23 Operating Earnings – Continued Growth Across the Group
FY23 Operating Earnings – Continued Growth Across the Group Aspen Group Operations Development Underlying Operating EPS and DPS (cents) 13.00 Rental Income1 Sales Revenue Total Revenue 12.00 $50.3m $20.1m $70.4m +53% $275pw per dwelling/site3 $239k per dwelling/site3 11.00 Property NOI Development P
Slide 8: FY23 Capital – Balance Sheet Strengthened
FY23 Capital – Balance Sheet Strengthened Aspen Group Operations Development Net Asset Value per Security 3,702 Dwellings/Sites 1,092 Sites $2.00 Total Assets $553 million $117k per dwelling/site $33k per site $1.75 4,794 Dwellings/Sites WACR1 6.5% ROIC2 18% $1.50 $1.25 Full Control – No JVs or Fund
Slide 9: Operations - Increasing Scale, Margins and Profitability while Reducing Risk
Operations - Increasing Scale, Margins and Profitability while Reducing Risk Operational Dwellings/Sites – Average # Average Weekly Revenue per Operational Operating Performance ($m) Dwelling/Site 4,000 $60 60% $320 Rents growing at all properties, however Structural expansion in margin due to impro
Slide 10: Aspen's Rents are Competitive and Well Supported by Incomes & Subsidies
Aspen’s Rents are Competitive and Well Supported by Incomes & Subsidies Residential Communities1 Lifestyle Communities Park Communities Diverse mix of “permanent” 30 June 23 tenants through to shorter stay Est. Average Market Rent2 Federal Budget FY24 tourists and workers $369pw Maximum CRA Rate up
Slide 11: Development – Increasing Accommodation and Annuity Income
Development – Increasing Accommodation and Annuity Income Development Sales - # Average Sales Price per Dwelling/Site Development Profit, Margin & ROIC 90 $400,000 Maintaining highly competitive price points $7.00 40% Margins and ROIC maintained at attractive levels 80 36 $350,000 $366k 35% $6.00 $3
Slide 12: Substantial Development Pipeline Secured at Low Cost
Substantial Development Pipeline Secured at Low Cost Development Sales and Pipeline - # Development Completions and Pipeline - # 1,000 900 Residential Portfolio 800 Park Portfolio 700 Redevelopment/Refurbishmen 600 CQ Residential t of Existing Dwellings to Rent CQ Park 500 Meadowbrooke LLC Sierra LL
Slide 13: Optimising Capital Usage and ROIC to Drive EPS, DPS and NAV Growth
Optimising Capital Usage and ROIC to Drive EPS, DPS and NAV Growth Residential Dwellings Recycling capital from properties with relatively high rent / price points to those more suited to our customer base with lower rents and higher expected returns Lifestyle Communities Eg. Selling houses Capital
Slide 14: Acquisitions FY24 YTD
Acquisitions FY24 YTD Highway 1 Tourist & Lifestyle Park 11.5 Ha adjoining Land - $1.2m Zoned Infrastructure 26 Treatts Rd, Lindfield NSW Retirement Rental Community - $3.4m / $200k per dwelling Normanville 10.6 Ha Land - $2.56m Zoned Tourism (mixed use allowed) Sierra Lifestyle Village, Wundowie WA
Slide 15: FY24 Outlook and Guidance
3 FY24 Outlook and Guidance 15
Slide 16: FY24 Outlook and Guidance
FY24 Outlook and Guidance Expected Conditions Aspen Drivers FY24 Guidance3 ✓ Demand for accommodation to keep growing - population growth and the ✓ Investing more in our platform, particularly high-quality operations and economy / employment holding up development managers closer to the properties U
Slide 17: Appendix A: Business and Property Portfolio
Appendix A Business and Property Portfolio 17
Slide 18: Aspen's Business Model
Aspen’s Business Model Aspen’s Mission Provide Quality Accommodation on Competitive Terms Sustainable Ecological Footprint Governance Customer-centric business model servicing the full spectrum of Australian households Aspen recycles/refurbishes old buildings Undersupply <$400 weekly rent and <$400k
Slide 19: Portfolio Summary – 30 June 2023
Portfolio Summary – 30 June 2023 Portfolio Aggregates Total General Traits of Aspen’s Properties Location1 Dwellings that Aspen Leases 1,670 Regional 31% Land Sites that Aspen Leases 1,912 ✓ Desirable locations – particularly Total Operational Dwellings/Sites 3,582 metropolitan and/or close to major
Slide 20: Geographic Diversity
Geographic Diversity Land Area Land Area WA Dwellings/Sites NT (Hectares) Dwellings/Sites (Hectares) 13 Mandurah 6.8 158 18 Darwin FreeSpirit 10.8 455 14 AKV 2.9 180 18 15 Perth House Portfolio 2.5 59 16 Perth Apartment Portfolio 4.7 515 17 Meadowbrooke Lifestyle Estate 9.1 184 Land Area Dwellings/
Slide 21: Residential Communities
Residential Communities $m unless stated Residential Communities FY23 FY22 Change # Dwellings (close) 992 999 (1%) # Operational 872 733 19% # Refurbishment Pipeline 120 266 (55%) Total Book Value $213 $174 23% WACR 4.6% 4.1% 50bps Implied Average Gross Rental Yield @ 65% Margin 7.1% 6.3% 80bps Oper
Slide 22: Residential Portfolio Summary
Residential Portfolio Summary Residential1 WA NSW QLD Perth Apartment Perth House Lindfield Burleigh Cooks Hill Uniresort Total Residential Portfolio6 Portfolio Apartments Heads Region Perth Metro Perth Metro Sydney Metro Newcastle Metro Brisbane Metro Gold Coast Metro Land Ownership Freehold Freeho
Slide 23: Lifestyle Communities
Lifestyle Communities $m unless stated Lifestyle Communities Aspen’s New House Sale Price v. Local Market Price ($k)1 FY23 FY22 Change $1,200 # Sites (close) 1,090 1,101 (1%) # Operational 561 561 0% # Development Pipeline 529 540 (2%) $1,000 Total Book Value $75m $67m 11% WACR 6.6% 6.5% 10bps Opera
Slide 24: Lifestyle Communities
Lifestyle Communities Lifestyle NSW WA VIC SA Four Sweetwater Mandurah Wodonga Alexandrina Meadowbrooke Lewis Fields Total Lifestyle Lanterns Grove Gardens Gardens Cove Region Sydney Metro Newcastle Region South Coast South Coast Albury-Wodonga Fleurieu Fleurieu Land Ownership Freehold Freehold Free
Slide 25: Park Communities
Park Communities $m unless stated Park Communities Park Communities NOI ($m) FY23 FY22 Change $16.0 # Dwellings / Sites (close) 2,395 2,192 9% $14.0 $12.0 # Operational 2,149 1,990 8% $10.0 # Development Pipeline 246 202 22% $8.0 Total Book Value $163 $139 17% $6.0 WACR 8.9% 9.2% (30bps) $4.0 Operat
Slide 26: Park Community Portfolio
Park Community Portfolio Park Communities NSW SA NT WA Barlings Koala Tween Highway Adelaide Coorong Darwin AKV Total Parks Group Portfolio4 Beach Shores Waters One CP Quays FSR Region South Coast Central Coast South Coast Adelaide Metro Adelaide Metro Fleurieu Darwin Metro Pilbara Land Ownership Fr
Slide 27: Development – New Dwellings and Sites
Development – New Dwellings and Sites $m unless stated Total Development Residential Communities Lifestyle Communities Park Communities FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change # Development Pipeline (close) 1,092 1,096 0% 317 354 (10%) 529 540 (2%) 246 202 22% # Sales 84
Slide 28: Portfolio – 30 June 2023
Portfolio – 30 June 2023 Land Development Inventory SA SA Portfolio excl. Total Land Total Portfolio Land Development Mount Barker CQ Residential Development FY23 FY23 Region Adelaide Hills Fleurieu Land Ownership Freehold Freehold Resident Tenure N/A N/A Total Land Area (HA) 140 8.8 26.6 35.4 175 O
Slide 29: Acquisitions FY24 YTD
Acquisitions FY24 YTD Settlements FY24 YTD Contracted FY24 YTD NSW WA SA SA 26 Treatts Rd Sierra Village HWY1 Land Normanville Land Total Region Sydney Metro Darling Ranges Adelaide Metro Fleurieu Peninsula Land Ownership Freehold Freehold Freehold Freehold Land Lease / Resident Tenure Rental Vacant
Slide 30: Recent Acquisitions – Lindfield Apartments
Recent Acquisitions – Lindfield Apartments ▪ Acquired from Uniting Church in mid July 2023 ▪ Over-55s Community with mixture of Residential and subsidised Retirement leases ▪ 15kms (25 minute drive) north of Sydney CBD ▪ 0.31 hectares ▪ Heritage house plus 16 apartments ▪ Strategy: - Improved scale
Slide 31: Recent Acquisitions – Sierra Village WA
Recent Acquisitions – Sierra Village WA ▪ Acquired from a Trustee in early August 2023 Sierra Lifestyle Village ▪ 60kms (1 hour drive) north-west of Perth CBD ▪ 39 hectares adjoining the El Caballo Golf Course ▪ Sierra Lifestyle Community with 178 approved LL sites Sierra Village, Wundowie - 38 new
Slide 32: Recent Acquisition – Highway 1 Expansion Land
Recent Acquisition – Highway 1 Expansion Land ▪ Vendor is SA Water Corporation – conditional contracts exchanged, settlement expected in 1H FY23 ▪ Increases Highway 1 scale to 21 hectares with the additional 11.5 hectares to be merged at settlement ▪ 23kms (25 minute drive) north of Adelaide CBD ▪ N
Slide 33: Recent Acquisition – Normanville SA Land
Recent Acquisition – Normanville SA Land ▪ Acquired from family who have owned the property for decades ▪ 76kms (1 hour 15 minute drive) south of Adelaide CBD ▪ 10.6 hectares with access to the beach ▪ Zoned for Tourism (mixed use allowed) ▪ Adjoins existing mixed use park and holiday villa communit
Slide 34: Appendix B: Earnings and Balance Sheet Summary
Appendix B Earnings and Balance Sheet Summary Adelaide Caravan Park, SA – refurbished cabin interior 34
Slide 35: Statutory Profit and Underlying Operating Earnings
Statutory Profit and Underlying Operating Earnings FY23 FY22 FY23 FY22 Summary Change Operations & Development Change $m $m $m $m Statutory Profit 54.40 75.38 (28%) Operations Statutory Profit per Security (cents) 31.22 55.16 (43%) Rental & ancillary services revenue 50.26 35.27 43% Direct property
Slide 36: Reconciliation of Statutory Profit to Underlying Operating Earnings
Reconciliation of Statutory Profit to Underlying Operating Earnings FY23 FY22 $m $m Statutory Net Profit after Tax 54.40 75.38 Operating Earnings excludes value creation through redevelopment / refurbishment of properties to rent (not sold) – this is captured in NAV Adjustments: Depreciation & amort
Slide 37: Summary Balance Sheet and Capital Management
Summary Balance Sheet and Capital Management 30 June 23 30 June 22 Key Metrics Change $m $m Total Assets 553.2 452.5 22% - Investment Properties 490.4 412.6 19% - House and Land Development Inventories 21.7 15.8 37% Net Debt 130.0 117.5 11% - Cash 8.9 10.7 (17%) Gearing and LTV reduced – under the c
Slide 38: Disclaimer
Disclaimer This presentation has been prepared by Aspen Group Limited on behalf of Aspen Group Limited and Aspen Property Trust (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any s