Business Update and Equity Raising
| Stock | Aspen Group (APZ.ASX) |
|---|---|
| Release Time | 15 May 2025, 10:01 a.m. |
| Price Sensitive | Yes |
Aspen Group Announces Business Update and Equity Raising
- Strong demand for Aspen's accommodation, with minimal vacancy and increasing rents
- Continued growth in development sales with attractive margins and return on capital
- Equity raising to strengthen balance sheet and pursue growth opportunities
Aspen Group (ASX: APZ) has provided a business update and announced an equity raising. The company reports that demand for its accommodation remains strong, with minimal vacancy across its long-stay offering and increasing rents. Trading conditions for its short-stay offering continue to be mixed, with stronger corporate demand offsetting weaker tourist demand. Aspen's development sales are growing strongly, and the company is on track to produce over 200 dwellings and sites and settle at least 110 sales in FY25. Aspen is also deliberately increasing its completed Lifestyle house inventory to make it easier for customers to make buying decisions and for the company to manage sales rates in the future. The company expects to grow sales towards 200 per annum across 10 active projects over the next 2-3 years. Aspen's financial performance has been strong, with Underlying Operating EPS growth of 31% and Net Asset Value per security growth of 15% over the first 10 months of FY25. The company is raising additional equity through an Institutional Placement to raise $70 million and a Securityholder Purchase Plan to raise up to $4 million, both priced at $2.90 per security. The equity raising will strengthen Aspen's balance sheet and provide flexibility to pursue organic growth and new acquisition opportunities.
Aspen's FY25 guidance is unchanged, with Underlying Operating EPS expected to be 16.7 cents (up 21% on FY24) and DPS expected to be 10.0 cents (up 18% on FY24). The company continues to expect to grow Underlying EPS by at least 10% per annum over the medium term.
Aspen believes the equity raising will improve its growth prospects over the medium term and reduce risk. The company anticipates the securities issued under the Institutional Placement will represent 12% of its current securities on issue.