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INGENIA STAPLED share price trades flat after reporting 51% profit surge

Affordable retirement accommodation provider INGENIA STAPLED (ASX: INA) has failed to excite the market today despite reporting a 51% surge in underlying profit.

After a big rally in INGENIA’s share price in recent years, over the past 12 months the stock has struggled to keep up the momentum and is trading flat year-on-year at 46.5 cents.

Today’s results, while good, have not sent investors clamouring into the stock which may suggest that the share price ran too far, too fast and is now suffering from indigestion as earnings growth catches up with prior share price growth.

Here are the highlights from INGENIA’s full year results announcement:

  • Revenue up 66% to $76 million
  • Underlying profit up 51% to $17.5 million
  • Underlying earnings per share up 17% to 2.1 cents
  • Full year distribution per security up 17% to 1.36 cents
  • A final distribution of 0.7 cents per share has been declared by the board. The shares are scheduled to trade ex-dividend on August 28, with payment due on September 16
  • Net asset value per security up 10% to 38.9 cents
  • Loan to value ratio improved to 22.6%
  • A total of 100 sales during 2015 including 56 settlements

Outlook:

INGENIA has cleverly positioned itself to benefit from Australia’s aging population and the need many retirees will have for affordable housing solutions. The group owns an impressive land bank of property assets and currently has a development pipeline of 1,500 potential home sites with an estimated end sales value exceeding $350 million.

Management has provided a forecast for 120 sales in the current year with the group already having reservations and contracts worth over $11.3 million in place.

Management also noted that “the Group expects to grow returns in FY16 through an expanded rental base and increasing contribution from development earnings.”

As the largest owner/operator of seniors’ rental accommodation in Australia and with a growing portfolio of Lifestyle Parks, the long-term outlook for INGENIA’s business is certainly positive. With the stock price taking a breather in the past 12 months, now could be an opportune time for investors to assess the company more closely.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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