Accordia Golf Trust (S$0.565): Solid 3QFY16 DPU on favourable FX and weather conditions
Accordia Golf Trust’s 3QFY16 DPU jumped 19.3% y/y to 2.16¢, helped by a stronger JPY, while distributable income rose 12% to ¥2b. This took its 9MFY16 payout to 4.8¢.
Revenue climbed 4% to ¥14.9b as number of visitors to its golf courses increased 5.6% on favourable weather conditions, while operating expenses stayed flat, resulting in a 3.1ppt improvement in margin to 28.4%.
During the period, utilization rate of its 89 golf courses improved 3ppt q/q to 80.2%, while aggregate leverage held steady at 28.9%.
Looking ahead, management is sanguine on the trust’s outlook given the growing demand for golf, underpinned by rising number of retirees from the baby boomer generation, who have more money and time for the sport.
In addition, the booming inbound visitors to Japan are also expected to drive up the demand for golf. Japanese officials estimate that the number of foreign visitors jumped 47% to 19.7m in 2015.
The Japanese golf trust is currently trading at 0.63x P/B, and offers an estimated FY3/16 distribution yield of 9.8%.
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