Australia's Aveo Group Ltd. CEO Geoff Grady said the company is commencing a strategic review of its retirement business, which may end with a team-up with local or foreign capital partners.
The business, according to the real estate company, is significantly undervalued by the market, given that it currently trades at a 44% discount to its net asset value and on a fiscal 2019 earnings yield of over 9%.
The planned review will center on closing the value gap between the price of Aveo's securities on the Australian bourse and the underlying value of its retirement portfolio, which brought in total revenues of A$600.7 million in fiscal 2018.
An adviser to the strategic review is expected to be named Aug. 24.
In addition, Aveo affirmed its EPS guidance for the 2019 fiscal year at 20.4 Australian cents, compared to the 22.0 cents recorded for the 2018 fiscal year ended June 30. Also for the full year, the company expects to pay out 40% to 60% of its total underlying profit as distribution to security holders.