The Ingenia Communities Group (ASX: INA) share price is up over 2% on FY21 profit update and its FY22 outlook.
FY21 guidance exceeded
Ingenia said that its FY21 result will exceed guidance, resulting from strong performance across the operating business and the settlement of 380 new homes across Ingenia and its joint venture.
Management said it also expects a positive outlook for FY22 including additional acquisitions, growing sales and domestic tourism demand to be features. Acquisitions worth around $30 million will settle in July.
FY21 numbers
Ingenia said that its FY21 result still remains subject to finalisation of accounts and an audit process.
EBIT (EBIT explained) is expected to be up around 30% on FY20 EBIT of $71.9 million. Ingenia’s previous EBIT guidance was a growth of 15% to 20%.
Underlying profit/earnings per share (EPS) is expected to be around 5% above FY20 underlying EPS. Ingenia’s previously expected guidance was a 1-2 cents per share decline on FY20.
Ingenia’s holiday parks have done well with demand from domestic travel, with revenue of over $50 million for the year which is higher than FY20.
The company completed more than $190 million of acquisitions in FY21, it deployed the $178 million of equity raised at the end of FY20. Settlement of five holiday parks will happen over July 2021.
Ingenia will release its full report on 18 August 2021.
New COVID-19 restrictions creating new uncertainty
The recent restrictions for greater Sydney have “materially” impacted bookings across Ingenia’s NSW holiday parks with high cancellations.
Ingenia said that Queenslanders travelling within their state has lessened cancellations at its Queensland parks, including Cairns Coconut and Noosa.
The company said that it expects demand to rebound as restrictions ease, however there is uncertainty around the timing and length of restrictions and this is the key to determine holiday performance over FY22.
Management comments
Ingenia Communities Group CEO Simon Owen said: “Ingenia enters FY22 with a positive outlook – our residential communities are delivering stable revenues and we are seeing ongoing demand for domestic travel which is benefitting our holiday parks. In addition, we have new developments commencing which will assist us to meet the growth in demand we are seeing in our key markets. With strong deposits and contracts in place, additional balance sheet capacity and a solid acquisitions pipeline we are continuing to focus on expanding our footprint and rental base to deliver future growth.”
Summary thoughts on Ingenia and the share price
Ingenia has done well so far with the increase in domestic travel due to COVID. It also has reasonable tailwinds with its retirement living segment of its business.
Looking ahead, there is renewed uncertainty for Ingenia’s holiday park revenue with COVID restrictions continuing to be a headwind.
Ingenia investors were seemingly pleased with the update as the share price was up over 4% in early reaction earlier today. It’s up 2% at the time of writing.
