Ingenia Communities Group (ASX: INA) is the worst-performing ASX 200 share on the market today.
Ingenia shares opened at $3.72, down 19.5%, and quickly descended to an intraday low of $3.61. This represented a 21.85% drop. The stock has since recovered to $3.98, down 13.85% for the day.
This follows the release of the retirement and holiday communities developer's half-year FY23 results.
While the company reported a 24% increase in earnings before interest and taxes (EBIT), it downgraded its full-year EBIT growth guidance significantly from 30% to between 0% and 10%.
ASX 200 share in trading halt before results release
The ASX property share went into a trading halt at the company's request before the market open yesterday. That froze the ASX 200 share at Friday's closing price of $4.62.
Ingenia asked for the trading halt "in order to review recently updated home settlement forecasts and confirm its impact on earnings guidance, previously provided to the market".
The shares recommenced trading and crashed shortly after the results were released at 11.30am today.
Meantime, S&P/ASX 200 (ASX: XJO) shares are down a collective 0.2% as the market close nears.
What did the company report?
In its statement, the company said it had "growth levers in place" but production and settlement delays would impact its FY23 result, resulting in the downgrade to guidance.
Here are the highlights for the six months ending 31 December 2022:
- Revenue of $173.6 million, up 32% on the prior corresponding period (pcp) of 1H FY22
- EBIT of $42 million, up 24% pcp
- Underlying earnings per share (EPS) of 8.5 cents, up 5% pcp
- Statutory profit of $33.7 million, down 16% pcp
- 5.2 cents per share distribution (unfranked) to be paid on 23 March
What did management say?
Ingenia CEO, Simon Owen said continuing construction delays and the falling residential market were key challenges for 2H FY23.
Owen commented on the results and outlook, saying:
During the first half, revenue and EBIT increases on the prior year were delivered as we benefitted from
an expanded asset base as well as growth in rents across the residential portfolios and strong performance from the holidays business.We commenced our asset recycling program as we focussed on improving portfolio quality and internally funding growth.
However, extended construction timeframes and the subsequent impact on home settlements moderated first half earnings.
What's next for this ASX 200 share?
Owen said Ingenia's residential communities and holidays businesses "are performing well and
experiencing ongoing demand".
However, short-term challenges like ongoing labour shortages and construction delays, as well as rising inflation and interest rates, would lead to longer lead times with settlements.
Owen pointed to recent data showing days on market in regional areas had increased significantly from last year.
He said:
Whilst we are taking a prudent approach given the uncertainty, as we move into FY24, greater project
diversity and progress on our new projects will contribute to increased settlement volumes as we scale the development business.
Ingenia share price snapshot
The ASX 200 share is down 11.4% in the year to date and down 28.2% over the past 12 months.
Ingenia is underperforming its peers, with the S&P/ASX 200 A-REIT Index (ASX: XPJ) up 6.7% in the year to date and down 13% over the past 12 months.
This compares to a 6.5% year-to-date bump in the ASX 200 and a 1.4% rise over the past year.
