Ingenia tops earnings guidance, prepares to exit funds business
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The news: Shares in Ingenia Communities Group surged in morning trade after the holiday parks and retirement villages owner topped its earnings guidance for the 2024 financial year.
The numbers: Ingenia shares were up 7.1% to $5.44 by 11am AEST, having added more than 30% over the last 12 months.
Ingenia reported full-year EBIT of $125.7 million, up 17% on FY23 and above its guidance range of 10% to 15% EBIT growth. Underlying earnings per share (EPS) of 23.3 cents was 14% year on year and above guidance of 20.8 cents to 22.3 cents.
Statutory profit of $14 million was down 78% on the prior year, reflecting a $96.6 million goodwill impairment relating to its 2021 Seachange acquisition, partially offset by valuation gains across the group's holidays and gardens portfolios.
Group revenue grew 20% to $472.3 million while operating cash flow of $82.2 million was flat year on year, with ongoing investment in inventory as settlements increased and new projects commenced.
The group secured 462 new home settlements in FY24, up 24% on FY23, with average home sales price also increasing.
Ingenia declared a final distribution of 6.1 cents per share, with a full year distribution of 11.3 cents per share representing a 3% rise on FY23. The group is targeting EPS of 24.4 cents to 25.6 cents in FY25 and EBIT growth of 10% to 15% on FY24.
The context: Ingenia, which has more than 9,000 rent-generating sites, said the FY24 result was underpinned by the acceleration in new home settlements and growth in recurring income from its lifestyle, rental and holidays portfolios.
Progress was also made on cost reduction, business simplification and efficiency initiatives, it said, as the business pivots to focus on execution and realisation of embedded value. As part of this, Ingenia said it will exit the funds business in FY25.
What they said: Ingenia CEO and managing director John Carfi said: "While we were pleased to increase settlements, development returns for some projects remain below target".
"I have spent considerable time in this area of the business, we are progressing a range of initiatives that will ensure we move towards targeted returns over the medium term, building development into the growth engine of this business," he said.
The source: ASX announcement
