AX Group plc - Updated Financial Analysis Summary

On 28 April 2023, AX Group plc published an updated Financial Analysis Summary. The following are the main highlights of the expected financial performance and financial position of AX Group plc for the financial year ending 31 October 2023:

• Revenues are anticipated to surge by 43.1% to €55 million driven by the growth of the hospitality segment, leading to higher income from the hotels located in Sliema and Valletta, as well as the boost in revenue from the Qawra Hotels following the opening of the redeveloped AX ODYCY (previously known as Seashells Resort at Suncrest) in May 2023.
• Net operating expenses are expected to increase by 39.1% to €43.4 million reflecting the higher level of business. As a result, EBITDA is anticipated to rise by 60% to €11.6 million compared to €7.22 million in the 2021/22 financial year. The interest cover is expected to rise to 2.1 times from 1.7 times in FY2021/22.
• After accounting for depreciation charges of €8.50 million, net finance costs of €5.63 million, a marginal profit from associates of €0.65 million, and a tax expense of €0.77 million, AX Group is forecasting a net loss of €2.7 million compared to a loss of €0.25 million in the financial year ended 31 October 2022, which was positively impacted by fair value gains of investment property.
• Total borrowings are expected to surge by 59% (or €71 million) to €191.3 million on account of the substantial ongoing investments in the Qawra Project as well as the Verdala Project at Rabat. As a result, the gearing ratio is anticipated to climb to 44% (31 October 2022: 32.6%) and the net debt to EBITDA multiple is forecasted to increase to 15.7 times compared to 14.7 times in the previous financial year.