REPORTING SEASON: Goodman Group (GMG)
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Figure 1: Goodman Group 12 month chart
Goodman Group (GMG) profit surges thanks to property revaluations
– Goodman Group (GMG) has posted an 84% surge in annual profit to $1,208m – driven most by $710m of favourable asset revaluations. The global property group’s operating profit (which strips out revaluations and one-offs) was $653.5m; a more modest 8.7% rise and in-line with consensus.
– GMG enjoyed slightly higher profits across its three business units – Investment, Development and Management. More than half its earnings were generated from Investment, 35% from Development and 17% from Fund Management.
– GMG is continuing progress with its ‘urban renewal strategy’ – essentially working on rezoning its industrial property portfolio and selling to residential property stgelopers – with more than 35,000 apartments in the pipeline domestically. Its Management unit posted a 7% rise in earnings to $125.2m with AUM (Assets Under Management) rising by 12.5% to $25.2bn. As far as the Development business is concerned, GMG posted a 19% rise in ‘work in progress’ to $3.1bn.
– An 11.1c/share final distribution was previously declared, payable to investors on 26 August. The ex-dividend date was on 26 June, meaning investors purchasing shares today are no longer eligible to receive the final distribution.
– Looking ahead, GMG said it’s expecting earnings growth of 6% in FY16, while further reducing debt. GMG shares rose following the result and are outperforming the broader Australian market.