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Highlights

  • Moelis analyst Murray Connellan assigns a Sell rating on Ingenia Communities Group with a price target of AUD 4.49, representing a 24.79% downside from the current share price.

  • Despite positive FY25 results, including statutory profit of AUD 128.4 million (up 816% YoY) and revenue growth of 8% to AUD 512 million, the analyst maintains a cautious outlook.

  • Ingenia has guided for EBIT growth of 10–15% in FY26 with targeted underlying EPS of 32.5–34.0 cents, supported by development momentum and balance sheet flexibility.

Moelis Australia Securities’ Murray Connellan has issued a Sell recommendation on Ingenia Communities Group (ASX:INA), setting a price target of AUD 4.49, which is 24.79% below the company’s latest trading price of AUD 5.92. The rating comes despite a rebound in statutory profit and ongoing development momentum.

Company Performance

For the year ended 30 June 2025, Ingenia reported statutory profit of AUD 128.4 million, an 816% increase compared with the prior year, which had been impacted by a goodwill write-down. Underlying profit rose 33% year-on-year to AUD 126.1 million, supported by continued growth in its development and rental businesses.

Revenue grew 8% to AUD 512 million, while EBIT increased 22% to AUD 164.1 million, landing at the upper end of guidance. Operating cash flow surged more than 75% to AUD 145.2 million, boosted by land lease home sales and reduced inventory spend.

Development activity remained a key driver, with 520 new home settlements, up 13% on FY24, and an average sales price of AUD 671,000, reflecting an 11% increase from the prior year. The company now has a pipeline of 5,024 development sites, positioning it for long-term growth.

Segmental Performance

The Lifestyle Rental portfolio delivered EBIT of AUD 46.2 million, benefitting from CPI-linked rent increases and growth in the rent base. The Holidays portfolio posted EBIT of AUD 57.8 million, up 2% year-on-year, while the Gardens portfolio saw valuation gains of AUD 4.3 million. Overall portfolio value stood at AUD 2.7 billion at year end.

Despite positive performance, the group reduced its distribution per security to 9.6 cents, compared with 11.3 cents in FY24, reflecting alignment with taxable income.

Balance Sheet and Capital Management

Ingenia closed FY25 with AUD 198 million in cash and undrawn debt, supported by prudent balance sheet management. Gearing was maintained below 30%, while interest cover ratio remained strong at 4.15x. The company secured an additional AUD 125 million in debt facilities, extending maturities to January 2027.

Outlook

Looking ahead, Ingenia has guided for FY26 EBIT of AUD 180.5–188.7 million, representing growth of 10–15%, and underlying EPS of 32.5–34.0 cents. However, management noted headwinds from regulatory rent changes, rising project sales costs, and inflationary pressures.