Stocks Special Reports LICs Credit Technical Analysis Funds ETFs Tools SMSFs
Learn
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features Technical Analysis SMSFs Learn
About

News

Scentre Group's earnings meet expectations

Nicholas Grove  |  21 Feb 2017Text size  Decrease  Increase  |  

Page 1 of 1

Scentre Group's (ASX: SCG) funds from operations (FFO)--a preferred measure of operating performance among real estate investment trusts--rose 3.2 per cent to $1.238 billion in the year to 31 December 2016, representing 23.3 cents per security and in line with Morningstar's forecast.

The owner of Westfield shopping centres declared a distribution of 21.3 cents per security, up 2 per cent on the previous year, also in line with Morningstar's expectations.

Scentre's profit for the year was $2.991 billion, up 10.4 per cent on 2015 and including revaluations of $1.6 billion.

These revaluations reflect the strong net operating income growth throughout the portfolio, the value creation from the completion of major redevelopments and the continued improvement in capitalisation rates, the company said.

Scentre said it is in a strong financial position with total assets of $34.1 billion, gearing of 33.3 per cent and liquidity of $2.8 billion as at 31 December 2016.

"We are very pleased with these results, which are above guidance and reflect our strong operational performance across the portfolio," Scentre Group CEO Peter Allen said in a statement.

"During 2016 we completed major redevelopments with above-forecast yields and commenced $605 million of new developments as planned. 

"Our long-term strategy is to own the highest-quality shopping centre portfolio in Australia and New Zealand. We have now completed the divestment of nine shopping centres that did not meet this objective, which has refined our portfolio to meet the dynamic needs of both retailers and consumers."

For 2017, Scentre Group expects FFO growth of approximately 4.25 per cent and a 2 per cent increase in the distribution to 21.73 cents per security.

More from Morningstar

• 3 retail stocks you may want to reconsider

• Santos posts loss but sees better times ahead

 

Nicholas Grove is a Morningstar journalist.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.