Eureka Group Holdings Limited (ASX:EGH) Announces 1H25 Results
Financial Performance
Eureka Group Holdings Limited (ASX:EGH) reported revenue of $22.6 million for the first half of 2025, an increase of 11% from $20.3 million in 1H24. Underlying EBITDA rose by 16% to $8.2 million, while underlying profit before tax increased by 25% to $5.4 million. Statutory net profit after tax remained stable at $6.4 million compared to $6.3 million in the previous period.
Portfolio and Acquisitions
The portfolio value saw an uplift of $4.6 million, supported by maintainable village earnings growth. Eureka has secured a pipeline of over $100 million in accretive acquisitions and commenced a capital recycling programme, including the disposal of a rental village in Mount Gambier, SA, with plans to recycle a further $25 to $30 million over the next 12 months.
Dividend Declaration
The Board has declared a final dividend of 0.73 cents per share, a 4.3% increase from the previous final dividend of 0.7 cents per share. The dividend will be payable on 18 March 2025 to shareholders on record as of 4 March 2025.
Future Outlook
Eureka maintains its guidance for fully deployed underlying EPS growth of at least 19% for FY24. However, due to minor transactional delays and other short-term measures, the underlying EBITDA and EPS growth for FY25 are expected to be approximately 5% lower than previously forecast. Revised FY25 guidance includes an underlying EBITDA growth of around 11% and underlying EPS growth of around 2.6% on FY24.
Executive Comments
Chief Executive Officer, Mr Simon Owen, stated, “Eureka is well positioned for a period of strong and sustainable growth underpinned by continuing demand for rental accommodation, heavily constrained new supply and a focus on delivering CPI+ rental growth. Eureka’s pipeline of acquisition opportunities under contract or assessment now exceeds $100 million and with our recent expansion into the all-age affordable rental market through the acquisition of the Kin Kora residential home village, the addressable market which we can focus upon is significantly larger. We expect to make further investments in the all-age affordable rental market in the coming months. We are well-positioned to transact quickly on the accretive opportunities that we identify as being suitable for Eureka’s portfolio. We will also continue to actively manage our existing portfolio and have planned divestments for a further $25-$30 million of non-core or regionally isolated assets over the coming year. These will be replaced with more suitable assets from a yield and operational efficiency perspective. The Group is experiencing some softness in occupancy in a small number of rental communities across regional Victoria, inland NSW and Tasmania. However, in Queensland, where the portfolio is strongly weighted, we continue to experience very strong demand for rental accommodation with occupancy in that state exceeding 99%. Operationally the business is performing well and a significant and immediately accretive acquisition pipeline is now in place. Eureka remains on track to complete multiple further acquisitions in FY25 and we expect the proceeds from the November 2024 capital raise, along with the proceeds from the $5.0 million disposal of the Mount Gambier community, to be fully invested in CY2025 based on current deal flow.”
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