Aspen Group Reports Strong 3Q FY26 Results, On Track to Meet FY26 and FY27 Guidance

Financial Performance Highlights for 9 Months to March 2026

Aspen Group (ASX:APZ) has reported a strong operational and financial performance for the nine months ending 31 March 2026. The company’s net rental income (NRI) increased by 20% year-on-year to $31.4 million, supported by steady rent growth and high occupancy across its residential and lifestyle accommodation portfolio. Development profit more than doubled to $19 million, representing 88% of the full-year guidance, with margins holding steady at 33%. EBITDA rose 45% to $43.1 million, while pre-tax earnings increased 67% to $40 million. Pre-tax earnings per security also improved by 47% to 17.6 cents, moving closer to the FY26 guidance of 21.5 cents.

Rental Portfolio and Market Position

The company’s long-term residential accommodation remains essentially fully occupied, with average annual rent increases of around 5%. Aspen estimates its Perth residential rents are currently 10-15% below market rates, and some properties, such as CoVE Upper Mount Gravatt, are temporarily discounted due to refurbishment. The Lifestyle segment continues to grow rapidly through new developments and contracted rent escalations of 3.5% per annum. Notably, the conversion of transportable units at Australind into self-contained two-bedroom houses is progressing well, with leasing expected to commence in May and a waiting list already in place.

Short-stay revenue and profitability are strong overall, although performance varies across the Parks portfolio. Darwin Freespirit Resort has seen net rental income well ahead of the prior corresponding period (pcp), partly due to accommodating flood-displaced customers during its low season. Booked revenue for the upcoming peak season is up about 70% year-on-year, providing some resilience against potential cancellations linked to higher diesel prices and economic softness. Aspen Karratha Village also reports strong occupancy and rental income, expected to remain full for several months. Other parks are flat on pcp, reflecting refurbishment disruptions earlier in the year. Easter school holiday trade is tracking in line with last year.

Development Pipeline and Market Outlook

Aspen holds 42 Lifestyle contracts and 2 Residential land contracts, representing 20% of FY27 settlement guidance of 220. The company recently launched new stages at Mount Barker and plans to launch Ravenswood shortly, together offering 90 residential land lots. Development profit margins have expanded over the past year, providing some buffer against potential residential market slowdowns and cost pressures from geopolitical factors such as the Iran war and rising oil prices. Aspen notes minimal cost risk for current production stages due to largely completed works and fixed-price contracts.

The company also received approval for a new stage of 62 Lifestyle houses at Paralowie and has ten other development applications lodged. Aspen’s view is that any significant disruption in the building industry could exacerbate the undersupply of affordable housing, potentially increasing rents and prices further. The company expects ongoing demand for accommodation offering lower price points and better value.

Balance Sheet Strength and Growth Capacity

Aspen’s balance sheet remains robust, with gearing at a conservative 18% and an interest cover ratio approaching 6 times. The company’s debt is supported by diversified rental income streams and low corporate overheads. Aspen does not rely on development profit realisation to comply with debt covenants, retaining flexibility to rent or sell newly developed dwellings and land to optimise returns. This financial position provides ample capacity to fund organic growth and pursue acquisition opportunities.

This update follows Aspen’s earlier half-year result in December 2025, which showed a 15% rise in statutory profit and a 51% increase in underlying earnings, driven by rental portfolio expansion and accelerated development settlements. That result also included an increased interim distribution, reflecting the company’s ongoing growth trajectory and operational momentum boosts profit 15% and raises interim distribution.

Outlook and Guidance

Aspen remains on track to meet its FY26 and FY27 earnings guidance, subject to no material changes in the operating environment. The company expects continued strong growth across its rental and development businesses over the medium to long term, supported by an acute undersupply of affordable housing and resilient demand dynamics.