Finexia Financial Group to expand Gold Coast accommodation portfolio

On the QT: Finexia Financial Group to expand Gold Coast accommodation portfolio

A company behind luxurious Gold Coast holiday apartments is expected to snap up another two buildings and a prominent businessman has scored big in Surfers Paradise.

First Published in the Gold Coast Bulletin  on December 17, 2023 - 8:00PM by Quentin Tod

A company that’s involved in childcare and the apartment game has emerged from the shadows to add some new lustre to the Gold Coast’s thin ranks on the ASX.

Finexia Financial Group is a funds manager that has made its home in an office block in Surfers Paradise once owned by an 80s and 90s go-getter, Japan’s Daikyo group.

The company, almost silently and while still a minnow in ASX terms, has become a major player in the holiday apartment market in the city.

It’s spent $55 million buying management rights and, with those buys, has added hundreds of apartments to its holiday offerings in the tourism capital.

By early in 2024, Finexia is expected to add another two buildings to a portfolio that already includes the likes of Belle Maison, Bel Air and Ocean Resort at Broadbeach and Artique in Surfers.

Much of the funding comes via a special purpose vehicle, the Stay Company Income Fund, which is half owned by Finexia and the balance by investors.

The holiday apartments, assembled in what it terms ‘a skilfully curated portfolio’, are marketed in-house under the StayCo brand.

The funding operations of Finexia include exposure, $70 million worth, to the childcare industry nationally via an income fund in which it has a 20 per cent holding.

The company has spotted a financing void for centre owners - bank funding or loan top-ups can be a tough ask - and has jumped in to fill that void.

Finexia’s roots trace back to 2014 and the acquisition of a Hong Kong company and a later backdoor listing on the ASX via company Natural Fuels.

Some of its major shareholders today are from Asia.

The growth of the company, which has a market value of $13 million, hasn’t been without challenges, especially those thrown up by Covid.

The pandemic was a blow to two of its key operating areas - the holiday apartment and childcare centre industries.

It had to tighten its belt but its approach, and the resulting operational discipline, paid off - the company turned in its first profit in three years in 2021-22.

The $3.29 million result equated to nearly 10c a share but that figure fell to 8c in the latest year on the back of a capital raising boosting share numbers.

That said, Finexia had some reward for shareholders in the form of its maiden dividend - a fully-franked 2c a share.

It also was able to boast of strong numbers in its StayCo business, thanks in part to the setting up of a StayCo online travel agency.

The group has signalled it’s set to enlarge its management-rights business, which already takes in a Noosa resort, with two new buys.

That business doesn’t just involve holiday letting but there’s income from the running and caretaking of whole towers.

Finexia is set to stick to its faith in the Gold Coast apartment market by adding another Broadbeach tower, and possibly one in Burleigh Heads, in moves that could be seen as fattening the golden goose.

The company says its StayCo average occupancy rates are 28 per cent higher than during Covid, which compares with the city average of a 17 per cent lift.

It also says StayCo’s average daily room rate has risen 20 per cent in the past year, outstripping the market’s average of 7 per cent.

Investors in the company’s funds, which of course include Finexia itself, have been getting an annual 12 per cent return on their StayCo investments, while the childcare-centre fund is paying 9.75 per cent.

Meanwhile, the company’s interests are far from purely in the accommodation and childcare industries.

It has a Sydney-based securities broking business which it is in the process expanding by adding the equities and trading team from Everblu Capital.