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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.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Steven Daghlian, Market Analyst,