In terms of financial impact, the class action risk is noise. AOG is insured for legal costs and part of any settlement.
The sale of Gasworkds 1 will see AOG's NTA lift to A$3.48, meaning the group is now trading at a 26% discount to its NTA. And there is further upside to this NTA over time and therefore the current discount looks increasingly unsustainable.
This sale releases substantial capital for AOG to redeploy into its development pipeline (there is another A$220m of capital investment required to development and sell down 500 units in FY18). It also makes the group's balance sheet position rock solid, at a time when it is trading at a substantial discount to NTA. Trading on an FY18F PE of 12.7x (well below aged care/retirement peers).
AOG Price at posting:
$2.67 Sentiment: None Disclosure: Held
