REPORTING SEASON: GPT Group (GPT)
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Figure 1: GPT Group 12 month chart
Owner of office blocks, shopping centres & business parks, GPT Group (GPT), posted a 6.7% fall in 1H13 profit to $257m.
GPT, one of Australia’s biggest diversified property groups, partly blamed the lower earnings on difficult operating conditions.
The Fed’s expected tapering in QE has pushed US bond yields 1% higher since May 2013; making the REITs (Real Estate Investment Trusts) less attractive.
The weaker Australian dollar has also resulted in offshore selling in our REITs – to protect themselves from further falls in local currency.
From a capital management standpoint, GPT purchased 25.2m securities in 1H13 & has bought 6.1% of its issued shares since the buy-back commenced in 2011.
The buy-back program remains in place & GPT shares are up 27% since the start of 2011.
Looking ahead, GPT reiterated its CY13 guidance of at least 5% growth in EPS & an 80% payout ratio.
M&A activity in the sector is a possibility with a mixture of cheap debt & weak conditions acting as drivers.
GPT has a market cap of $6.48bn & has close to $15bn under management.