AX Real Estate plc - Updated Financial Analysis Summary

On 19 April 2024, AX Real Estate plc (AXRE) published an updated Financial Analysis Summary. The following are the main highlights of the expected financial performance and financial position of AXRE for the financial years ending 31 October 2024 and 2025:

  • Revenues are expected to surge by 30.2% to €15.9 million in FY2023/24 principally reflecting the full-year rental income from the redeveloped AX ODYCY. Nonetheless, the forecasted figure is 11.2% lower than the revenue figure of €17.9 million that was projected in last year’s forecast for FY2023/24. In the following year, revenue is projected to rise by a further 8.6% to €17.3 million, which however is also 9.2% lower than last year’s projected revenue of €19 million for FY2024/25. The downward revisions reflect the delay in the completion of the Verdala Wellness Hotel and lower amounts of variable rent from hotel properties in view of a reduction in expected profitability.
  • AXRE explained that the Verdala Wellness Hotel is expected to be inaugurated in 2025 and the total expenditure for the Verdala Wellness Hotel is now expected to be around €19 million compared to the earlier projection of circa €11.5 million.
  • EBITDA is forecasted to surge by 39.5% to €14.8 million in the current financial year ending 31 October 2024 and projected to rise by a further 9.1% to €16.1 million in the following year. Nonetheless, in view of the downward revisions in revenue, the projected EBITDA figures are 12% and 10% below the projected figures published last year.
  • Finance costs are expected to amount to €6.2 million in FY2023/24 and €6.5 million in the following year. However, in view of the expected increase in EBITDA, the interest cover is anticipated to improve to between 2.4 and 2.5 times, compared to 2.04 times as at the financial year ended 31 October 2023.
  • The forecasted Statement of Financial Position shows that total borrowings are expected to reach €161 million by 31 October 2025, representing a gearing ratio of 54.4%, compared to 50.7% as at the end of October 2023. Likewise, the debt to asset ratio is forecasted to increase to 0.49 times from 0.45 times as at the last financial year.