How Did Aspen Group (ASX:APZ) Start FY27?

Sonal Goyal

08 October 2026 11:42 AM AEDT

How Did Aspen Group (ASX:APZ) Start FY27?

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Aspen Group (ASX:APZ) released its 1Q FY27 update on 5 October 2026. The company said first quarter financial results were above its expectations, particularly from the rental pool, and that it is on track to deliver at least 20% growth in underlying Earnings Per Share for FY27. The figures in the update are from unaudited management accounts.

WHAT ASPEN GROUP DOES

Aspen Group is a stapled entity comprising Aspen Group Limited and Aspen Property Trust. It provides housing that it describes as good quality and value-for-money, offering a variety of Lease types, including residential leases, retirement village leases and park agreements, with an increasing skew to residential leases over time.

The company describes its model as owner, operator, developer and Capital manager. It owns 100% of its properties and projects with no joint venture or fund interests, and it develops Lifestyle houses and residential land lots.

1Q FY27 RESULTS

Net rental income (NRI) was $12.7 million compared with $10.9 million in 1Q FY26, up 16%. Realised development profit was $7.9 million compared with $4.0 million. EBITDA was $17.8 million compared with $12.9 million, up 38%, and pre-tax earnings per share were 7.1 cents compared with 5.3 cents, up 34%.

In rentals, Revenue rose 10% to $21.7 million and the NRI Margin expanded to 58% from 55%. The company cited residential rent increases across Australia, with Cotality estimating average rental growth of 5.5% for the 12 months to September 2026. Its long stay accommodation is described as essentially full, with rents generally increasing 3% to 5% a year and about 10% below market on the company's estimates.

In development, there were 46 settlements compared with 30. The average price of a Lifestyle house was $520,000 compared with $476,000, development revenue was $22.1 million compared with $13.0 million, and the development profit margin was 36% compared with 31%. Development profit per house or lot rose to $168,000 from $135,000. At the end of the quarter there were 123 contracts on hand, and the 169 combined settlements and contracts comprise 91 Lifestyle houses against FY27 guidance of 150 and 78 residential land lots against guidance of 90. The company said this represents approximately 78% of FY27 development profit guidance, compared with about 68% at the time of its FY26 results.

GUIDANCE AND PORTFOLIO ACTIVITY

FY27 guidance was reiterated. Net rental income is expected to be $44 million compared with $42 million in FY26, realised development profit $33 million compared with $22 million, EBITDA $66 million compared with $54 million, pre-tax earnings per share 26.1 cents compared with 21.8 cents, and distributions per security 12.0 cents compared with 11.0 cents. The company said it reiterated guidance despite the first quarter being ahead of its expectations because it remains cautious given weakening economic conditions, particularly the timing of development settlements. It expects an effective tax rate of 10% to 15% of pre-tax underlying earnings in FY27 after exhausting historic tax losses in FY26.

On transactions, the Acquisition of the ECH portfolio settled in early September, the sale of Trigg apartments settled on 1 October, and the sale of Barlings Beach and Black Dolphin parks is expected to settle in mid-October. The company said the Residential build-to-rent component of the Australind project is on track for completion in the current half, with the Lifestyle component expected to commence in FY27, and that the upgrade of common facilities at CoVE Upper Mount Gravatt is complete, with occupancy above 90% after a 20% rent rebate ended on 1 September.

RISKS AND WHAT TO WATCH

The company stated that its guidance is subject to no material change in its operating environment. It referred to weakening economic conditions, which it said increase risks particularly around the timing of development settlements. There have been seven contract cancellations, or 9%, on residential land projects to date, of which six lots have been re-contracted, five at an average of 5% higher price and one at the same price.

Revenue was soft at two Adelaide parks. Only three completed Lifestyle houses and eleven completed residential land lots are available for sale across nine active projects.

NEXT MILESTONES

The sale of Barlings Beach and Black Dolphin parks is expected to settle in mid-October 2026. Titles for new land lots at Ravenswood are expected in November 2026, allowing settlements in the first half. The Residential component of the Australind project is expected to complete this half, and the Lifestyle component is expected to commence in FY27. The company also expects to continue assessing acquisition opportunities, which it said are increasing, while remaining highly selective.

FAQs

Q: What did Aspen Group (ASX:APZ) report for 1Q FY27?

A:Aspen reported net rental income of $12.7 million, realised development profit of $7.9 million, EBITDA of $17.8 million and pre-tax earnings per share of 7.1 cents, based on unaudited management accounts.

Q: Was FY27 guidance changed?

A:No. Aspen reiterated FY27 guidance, including EBITDA of $66 million, pre-tax earnings per share of 26.1 cents and distributions of 12.0 cents per security, subject to no material change in its operating environment.

Q: What development contracts does Aspen have?

A:At the end of the quarter Aspen had 46 settlements in the quarter and 123 contracts on hand, comprising a combined 91 Lifestyle houses and 78 residential land lots, which the company said represents approximately 78% of FY27 development profit guidance.

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