Co-living specialist LHN posts 23.8% rise in full-year profit to $47.3 million

SINGAPORE - Singapore-listed LHN unveiled record earnings for the year ended September, thanks to strong contributions from its core businesses and fair-value gains.

In a filing late on Nov 25, the Coliwoo co-living operator said net profit rose 23.8 per cent to $47.3 million, on the back of a 29.2 per cent rise in revenue to $121 million.

Fair-value gains from investment properties accounted for $14.7 million of its bottom line, a reversal from a fair-value loss of $8.7 million in the previous financial year.

The company declared a dividend of two cents per share, comprising a final dividend of one cent and a special dividend of one cent. This brings its total dividend payout for the year to three cents, after taking in the interim payout of one cent.

Boosting the numbers were its co-living properties, which saw revenue growth of 82.9 per cent during the year to $53.6 million, from $29.3 million a year earlier.

Its space optimisation business continued to be the primary revenue driver, growing 37.7 per cent to $83.2 million.

LHN said that it now owns and manages a total of 2,895 co-living spaces, mostly in Singapore, with overall occupancy of its local properties at 97.5 per cent.

Mr Kelvin Lim, LHN’s executive chairman and group managing director, said his group’s strong growth in the 2024 financial year reaffirmed its strategic direction in refining its co-living offerings and capital recycling approach.

“As we move into FY2025, we remain committed to leveraging demand for sustainable, flexible living and work spaces while continuing our innovation and efficiency efforts in renewable energy and facilities management,” he said.

The company has many ongoing initiatives, which would continue to power its growth during the current financial year. They include the on-streaming of the group’s three properties in Arab Street in 2024, which could boost its FY2025 bottom line.

LHN has also put up three of its properties for sale for a combined $120 million as part of capital recycling efforts. The sale proceeds could be booked-in before the end of FY2025. 

In January 2024, the company signed a contract with the Ministry of Health to design, retrofit and operate two lodging facilities for healthcare professionals. With contracts of six and eight years respectively, these two properties will come online and contribute during FY2025, with occupancy at 100 per cent.

Meanwhile, the former Bukit Timah Fire Station, which it clinched in April 2024, is expected to be a game changer as a Coliwoo franchise housing co-living spaces, farm-to-table restaurants and pet-friendly facilities. With 60 co-living apartments and retail outlets, the project is expected to be open to the public by early 2025.

Over at 55 Tuas Avenue, LHN has put up its food-processing centre for sale. Proceeds could come in during FY2025.

Also, LHN’s recently acquired GSM building in Middle Road will be operational during the third quarter of 2025. Comprising 250 co-living spaces and more than 10,000 sq ft of commercial space, revenue from this will likely kick in only during FY2026. The company said this would align with its goal of adding some 800 keys a year to its portfolio.

All these come on top of its existing businesses, such as Work & Store, industrial space, facilities management and carparks, all of which have occupancies exceeding 96 per cent. The group operates 27,000 carpark spaces in Singapore and 1,000 spaces in Hong Kong, many with electric-vehicle charging stations.

Mr Linus Loo, head of research at Lim & Tan Securities, noted that LHN’s earnings outlook remained strong. 

“Based on their guidance and outlook, their core business is going gangbusters,” he said. “And if they maintain their three cents per year dividend payout, we are looking at a 7 per cent yield.”

In its earnings announcement, the company said it is well-positioned to capture robust market demand for co-living spaces with its growing number of keys under management. 

“Coupled with a balanced approach to capital recycling, the group is poised to deliver long-term sustainable value to shareholders,” LHN said. 

Its shares fell 6.7 per cent to 41.5 cents on Nov 26. LHN’s net asset value per share is currently 60 cents.