Aventus Group (ASX: AVN)

Aventus delivers solid results despite challenging times

Aventus Group (ASX: AVN) (Aventus) on 24 August 2020 announced its results for the full year ended 30 June 2020.

Resilient FY20 Performance 

• Solid rent collection of 87% through the COVID-19 Period 
• Support of $6 million provided by way of rent relief to impacted tenants 
• A high occupancy of 98% maintained, with minimal holdovers of approximately 2% 
• 100% of all retailers at Aventus centres, excluding Victoria, are open and trading 
• Diversified and robust tenancy mix, well placed to benefit from the recent household shift to working, learning and entertaining from home 
• Active leasing management with 90 leases negotiated across 80,600 sqm of GLA with positive leasing spreads and low incentives 
• High exposure to established national tenants, which comprise 87% of the portfolio by GLA 
• All leases in the portfolio include annual rent reviews, over 76% of leases contain fixed annual increases 
• Acquisition of the adjoining development site in Epping, Victoria for $11.5 million which provides an opportunity for master planning of a mixed use asset

 

(Chart source: TradingView)

Financial Highlights 

• Funds from Operations (FFO) of $100 million, an increase of 4.2% on FY19, or 18.2 cents per security 
• Statutory Profit of $57 million 
• Net Tangible Asset per security of $2.14 and Net Asset Value per security of $2.41 
• Distributions of 11.9 cents per security 
• Establishment of third party funds management platform with the successful launch of the Aventus Property Syndicate 1 (APS1) 
• Gearing reduced 2.7% to 36%, within self-imposed target range of 30% - 40% 
• Weighted average debt maturity of 3.1 years and weighted average cost of debt reduced to 3.1% 
• Interest Cover Ratio increased to 5.2x, an increase from 4.7x in FY19 and well above covenant requirement of 2.0x 
• Preserved $121 million in liquidity and no debt expiries until 2022 (Data Source – Company Reports)

 

Veye’s Take

Aventus negotiated 90 leases covering 80,600 sqm and managed to achieve a high occupancy rate of 98% across the portfolio. Further, these leases were achieved with positive leasing spreads and low incentives, and 36 were executed throughout the COVID-19 period. Traffic, excluding Victoria, had increased to above pre-COVID levels of +9% across the portfolio over the past three months from June, showing the sustained attraction of shopping in an Aventus centre. 100% of all retailers at Aventus centres, excluding Victoria, were open and trading. Aventus also acquired the adjoining 32,000 sqm development site in Epping, Victoria, for $11.5 million. The acquisition expands Aventus’ existing holding by 53% and the amalgamated site provides a significant opportunity for master planning of mixed-use development. The stock was trying to form inverse head & shoulder formation but could not complete it. Now after making a cup and handle formation it can have the potential to resume its upward journey and give good returns in the long term. Veye maintains a "Hold" on “Aventus Group” at the current price of $2.39