Aspen Group Limited Reports Strong Demand Amid Housing Shortage, Launches Equity Raising

Highlights:

• Strong Housing Demand: Aspen Group Limited (ASX: APZ) reports minimal vacancies and rising rental prices across its long-stay properties, driven by a nationwide housing shortage.
• Equity Raising for Expansion: The company launched a $70 million Institutional Placement and a $4 million Security Purchase Plan (SPP) to strengthen its balance sheet and fund growth opportunities.
• Solid Financial Performance: Aspen achieved 22% annual growth in Underlying Operating EPS over five years and expects a further 10% per annum increase over the medium term.

Robust Housing Demand Drives Growth

Aspen Group Limited (ASX: APZ), a leading provider of affordable housing solutions across Australia, reported strong demand for its accommodation offerings as the nationwide housing shortage continues to intensify. At the time of writing, Aspen's properties maintain minimal vacancy rates, except for its CoVE Upper Mount Gravatt site. The company noted rising rental prices across its long-stay segments, while its short-stay market remains mixed, with robust corporate demand offsetting weaker tourist

bookings.

Aspen's development sales are also showing significant momentum, with the company on track to deliver over 200 dwellings and settle at least 110 sales in FY25. Looking ahead, Aspen aims to expand its annual sales to around 200 units across 10 active projects over the next two to three years.

Financial Performance and Growth Projections

Over the five years leading to FY24, Aspen achieved an impressive 22% annual growth in Underlying Operating EPS and a 15% annual increase in Net Asset Value per security. For the first ten months of

FY25, the company reported:

• Net Rental Income: $29.3 million (+13%)
• Development Profit EBITDA: $9.1 million (+42%)
• Underlying Operating Earnings: $27.5 million (+31%)
• Underlying Operating EPS: 13.7 cents (+17%)

Aspen's FY25 guidance remains unchanged, with expectations for an Underlying Operating EPS of 16.7 cents—a 21% increase compared to FY24—and a Dividend Per Security (DPS) of 10.0 cents, marking an 18% rise. The company also projects a minimum of 10% annual EPS growth over the medium term.

Equity Raising and Debt Facility Expansion

Aspen recently renegotiated its syndicated debt facility, boosting its limit by $50 million to $260 million, extending its term to September 2028, and reducing the drawn margin by 15 basis points to 185bps.

Additionally, the company launched an equity-raising initiative, including a $70 million Institutional Placement and a $4 million Security Purchase Plan (SPP), both priced at $2.90 per APZ security. The Institutional Placement, representing 12% of Aspen’s current securities, aims to bolster its balance sheet and fund growth opportunities.

The Joint Lead Managers for the placement are MST Financial Services and Aitken Mount Capital Partners. Eligible securityholders in Australia and New Zealand can participate in the SPP, subscribing for up to $30,000 in additional securities without brokerage fees.

With its strategic expansions and financial resilience, Aspen is well-positioned to capitalize on Australia's housing demand and execute its long-term growth plans.

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