12 August 2016

Accordia Golf Trust 1Q FY 16/17 DPU increased 3.4%

Accordia Golf Trust posted their 1Q FY 16/17 earning report in summary below
  • Available Distribution of 1.82 cents for 1Q FY 16/17
  • Operating profit of JPY 2,975 million and Total Distributable income available for distribution was JPY 1,526 million
  • Net Asset Value (NAV) rose to SGD $0.96 mainly due to Japanese Yen appreciation
  • Number of visitors to AGT's golf courses in 1Q FY 16/17 was 3.2% lower than the previous 1Q FY 15/16
Japan Economy Outlook
1. The number of golf plays in Japan is expected to continue as golf continues to be a healthy leisure activities for the seniors.
2. Year 2020 Tokyo Olympics is expected to increase popularity of golf in Japan including the younger generations.

Inbound tourism in Japan
1. Positive impact on demand for golf in the mid-to-long term.

Accordia Golf Trust has a very strong branding and is the largest golf operator in Japan. The operation team and management is very efficient in managing the golf course operation. Their strategy is to target middle class working people into playing golf in Accordia. They provide casual atmosphere with reasonable play fees. They had a large pool of loyal customers base that subscribed to their golf club membership.

This quarter result is not as good as the previous year due to heavy rains in June and also the earthquake in Kyushu. But however due to appreciation of Japanese Yen currency, the DPU increased by 3.4% helped to improve the returns for shareholders. With the Tokyo Olympics in Year 2020, I am sure the shareholders will be rewarded with the growth and stable income distribution by investing on them. The only downside for investing in golf business is, they are at the mercy of weather conditions.