AX Real Estate plc - Interim Results

On 23 June 2022, AX Real Estate plc published its interim financial results covering the six-month period ended 30 April 2022. In this respect, it is important to highlight that the performance recorded in the first half of the current financial year is not comparable to the corresponding period in 2021 following the reorganisation of AX Group plc and the IPO of AX Real Estate plc in early 2022.

Performance Overview

Revenues amounted to €4.35 million largely reflecting the income from the lease of the company’s various property assets, mostly to AX Group plc. In this respect, AX Real Estate explained that 60% of the rental income emanated from its properties within the hospitality segment, 23% from the Simblija Care Home, whilst the remaining portion was derived from the lease of offices (8%), residential units (4%), and warehouses (5%). Meanwhile, AX Real Estate also generated €0.73 million in income from the sale of the remaining apartments at Targe Gap complex located in Mosta.

Operating expenses (net of other income) amounted to €0.99 million, thus resulting in an operating profit of €3.36 million which translates into an operating profit margin of 77.2%. After accounting for net finance costs of €1.57 million and a tax charge of €0.12 million, AX Real Estate reported a net profit of €1.67 million.

The Statement of Financial Position as at 30 April 2022 shows that total assets amounted to €274.3 million mostly represented by the value of investment property (€242.8 million), cash (€19.6 million), and trade and other receivables (€11.5 million). On the other hand, total liabilities amounted to €130.8 million mostly represented by debt (€104.9 million), deferred tax liabilities (€19.9 million), and trade and other payables (€5.77 million). Total equity stood at €143.5 million which, in turn, translates into a net asset value per share of €0.5232 (€0.5958 per share when adjusted for deferred tax liabilities).


The Directors of AX Real Estate declared a net interim dividend of €0.0125 per share which is in line with the dividend policy as stated in the IPO Prospectus. The dividend is payable on 15 July 2022 to all shareholders as at close of trading on 28 June 2022.

Current Developments & Outlook

In their commentary, the Directors provided an update on the two major projects that the company is currently pursuing – namely the refurbishment and extension of the Seashells Resort at Suncrest, as well as the development of the Verdala Hotel and the refurbishment of the adjacent Verdala Hotel Annex. In this respect, AX Real Estate noted that in February 2022, it obtained the full development permit for the redevelopment of the Suncrest lido. This was another important milestone for the company to ensure that the Suncrest extension and lido redevelopment are delivered within the stipulated time frames. In the meantime, works on the redevelopment of the Verdala site and the extension of the Suncrest Hotel in Qawra progressed according to the planned timeframes. As such, the new Suncrest Hotel is expected to reopen to the public in April 2023 with the new Verdala Hotel expected to start operating a year later.

Looking ahead, AX Real Estate noted that the positive economic recovery in the tourism industry augurs well for the future as the budgeted variable rent is expected to be achievable. Furthermore, despite the enduring global supply chain challenges, the AX Group has not experienced any major disruptions so far as sufficient resources are engaged to guarantee that orders are placed in time according to the programme of works. Nonetheless, cognisant of the inflationary pressures on raw materials, AX has been exploring construction methodologies to minimise the impact from cost overruns. Despite these initiatives, it is highly probable that under the current economic scenario, the capital expenditure on the Suncrest and Verdala projects will be negatively impacted.