ASX:LEP

Stock Analysis Report

Executive Summary

ALE Property Group (ASX:LEP) is the owner of Australia's largest portfolio of freehold pub properties.

Rewards

Earnings are forecast to grow 8.71% per year

Risk Analysis

Dividend of 3.86% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

Profit margins (44.2%) are lower than last year



Snowflake Analysis

Concerning outlook with worrying balance sheet.

Share Price & News

How has ALE Property Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LEP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

LEP

-1.4%

AU REITs

-2.0%

AU Market


1 Year Return

9.3%

LEP

15.0%

AU REITs

16.7%

AU Market

Return vs Industry: LEP underperformed the Australian REITs industry which returned 15% over the past year.

Return vs Market: LEP underperformed the Australian Market which returned 16.7% over the past year.


Shareholder returns

LEPIndustryMarket
7 Day-2.0%-1.4%-2.0%
30 Day1.1%2.0%-0.7%
90 Day3.0%1.1%0.2%
1 Year14.0%9.3%20.7%15.0%22.5%16.7%
3 Year43.0%25.8%50.3%28.6%35.4%16.8%
5 Year107.8%66.0%95.4%51.4%60.6%24.4%

Price Volatility Vs. Market

How volatile is ALE Property Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ALE Property Group undervalued compared to its fair value and its price relative to the market?

39.79x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LEP (A$5.41) is trading above our estimate of fair value (A$4.57)

Significantly Below Fair Value: LEP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LEP is poor value based on its PE Ratio (39.8x) compared to the REITs industry average (16.1x).

PE vs Market: LEP is poor value based on its PE Ratio (39.8x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: LEP is poor value based on its PEG Ratio (4.6x)


Price to Book Ratio

PB vs Industry: LEP is overvalued based on its PB Ratio (1.7x) compared to the AU REITs industry average (1.2x).


Next Steps

Future Growth

How is ALE Property Group forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

8.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LEP's forecast earnings growth (8.7% per year) is above the savings rate (1.1%).

Earnings vs Market: LEP's earnings (8.7% per year) are forecast to grow slower than the Australian market (9.4% per year).

High Growth Earnings: LEP's earnings are forecast to grow, but not significantly.

Revenue vs Market: LEP's revenue (3% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: LEP's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LEP's Return on Equity is forecast to be low in 3 years time (5.5%).


Next Steps

Past Performance

How has ALE Property Group performed over the past 5 years?

-1.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LEP has a large one-off gain of A$26.2M impacting its June 30 2019 financial results.

Growing Profit Margin: LEP's current net profit margins (44.2%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: LEP's earnings have declined by -1.2% per year over the past 5 years.

Accelerating Growth: LEP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LEP had negative earnings growth (-64.5%) over the past year, making it difficult to compare to the REITs industry average (-16.4%).


Return on Equity

High ROE: LEP's Return on Equity (4.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ALE Property Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: LEP has a high level of physical assets or inventory.

Debt Coverage by Assets: LEP's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: LEP's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if LEP has a sufficient allowance for bad loans.

Low Risk Liabilities: LEP reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if LEP has an acceptable proportion of non-loan assets held.

Low Risk Deposits: LEP has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if LEP has an appropriate level of bad loans.


Next Steps

Dividend

What is ALE Property Group's current dividend yield, its reliability and sustainability?

3.86%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.4%markettop25%5.6%industryaverage4.4%forecastin3Years4.3%

Current dividend yield vs market & industry

Notable Dividend: LEP's dividend (3.86%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: LEP's dividend (3.86%) is low compared to the top 25% of dividend payers in the Australian market (5.59%).


Stability and Growth of Payments

Stable Dividend: LEP's dividend payments have been volatile in the past 10 years.

Growing Dividend: LEP's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (144.3%), LEP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LEP's dividends in 3 years are not forecast to be well covered by earnings (137% payout ratio).


Next Steps

Management

What is the CEO of ALE Property Group's salary, the management and board of directors tenure and is there insider trading?

9.3yrs

Average management tenure


CEO

Andrew F. Wilkinson 0

16.1yrs

Tenure

AU$591,556

Compensation

Mr. Andrew F. O. Wilkinson, B.Bus, CFTP, MAICD, serves as the Chief Executive Officer of Australian Leisure and Entertainment Property Management Limited and also has been its Managing Director since Novem ...


CEO Compensation Analysis

Compensation vs Market: Andrew F.'s total compensation ($USD405.40K) is below average for companies of similar size in the Australian market ($USD969.80K).

Compensation vs Earnings: Andrew F.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.3yrs

Average Tenure

Experienced Management: LEP's management team is seasoned and experienced (9.3 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

58yo

Average Age

Experienced Board: LEP's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$614,72030 Oct 19
UBS Asset Management
EntityCompany
Shares115,866
Max PriceAU$5.31
SellAU$29,13430 Oct 19
UBS Asset Management
EntityCompany
Shares5,496
Max PriceAU$5.30
BuyAU$3,733,21115 Oct 19
UBS Asset Management
EntityCompany
Shares709,635
Max PriceAU$5.26
SellAU$821,74515 Oct 19
UBS Asset Management
EntityCompany
Shares158,814
Max PriceAU$5.17
SellAU$167,82615 Jul 19
Andrew F. Wilkinson
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares33,365
Max PriceAU$5.03
BuyAU$167,82615 Jul 19
Andrew F. Wilkinson
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares33,365
Max PriceAU$5.03
BuyAU$12,675,57511 Jul 19
UBS Asset Management
EntityCompany
Shares2,631,365
Max PriceAU$4.85
SellAU$44,77811 Jul 19
UBS Asset Management
EntityCompany
Shares8,864
Max PriceAU$5.05

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Andrew F. Wilkinson

    MD, CEO & Director

    • Tenure: 16.1yrs
    • Compensation: AU$591.56k
  • Andrew Slade

    Capital Manager

    • Tenure: 0yrs
    • Compensation: AU$208.15k
  • Michael Clarke

    Finance Manager & Company Secretary

    • Tenure: 0yrs
    • Compensation: AU$353.53k
  • Don Shipway

    Asset Manager

    • Tenure: 9.3yrs
    • Compensation: AU$229.42k
  • Margaret Sullivan

    Compliance Manager

    • Tenure: 3.4yrs

Board Members

  • Bernard Stanton

    Director

    • Tenure: 0yrs
  • Nancy Milne (66yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$110.00k
  • Andrew F. Wilkinson

    MD, CEO & Director

    • Tenure: 16.1yrs
    • Compensation: AU$591.56k
  • Rob Mactier (55yo)

    Independent Chairman of the Board

    • Tenure: 2.6yrs
    • Compensation: AU$195.00k
  • Paul Say (58yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: AU$120.00k
  • Michael Triguboff

    Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$95.00k
  • Pippa Downes

    Independent Non-Executive Director

    • Tenure: 6.1yrs
    • Compensation: AU$115.00k

Company Information

ALE Property Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ALE Property Group
  • Ticker: LEP
  • Exchange: ASX
  • Founded: 2003
  • Industry: Specialized REITs
  • Sector: Real Estate
  • Market Cap: AU$1.085b
  • Shares outstanding: 195.77m
  • Website: https://www.alegroup.com.au

Location

  • ALE Property Group
  • Norwich House
  • Level 10
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LEPASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDNov 2003
LEPCHIA (Chi-X Australia)YesStapled SecuritiesAUAUDNov 2003

Biography

ALE Property Group (ASX:LEP) is the owner of Australia's largest portfolio of freehold pub properties. Established in November 2003, ALE owns a portfolio of around 86 pub properties across the five mainlan ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 10:33
End of Day Share Price2019/12/09 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.