Vicinity Half Yearly Results to Dec 2017


Vicinity Centres (Vicinity, ASX:VCX) released it half yearly results to the 31 December 2017,

KEY FINANCIAL AND OPERATING HIGHLIGHTS

  • Statutory net profit after tax of $755.9 million

  • Funds from operations (FFO) of $357.7 million or 9.1 cents on a per security basis. Adjusting for acquisitions and divestments, FFO was up 2.2% on a comparable basis

  • Distribution of 8.1 cents per security, representing a payout ratio of 95.0% of adjusted FFO (AFFO)

  • Net tangible assets per security (NTA) of $2.93, up 3.9% compared to 30 June 2017, underpinned by strong net property valuation gains of $408.5 million

  • Comparable net property income (NPI) growth of 1.0%.

  • Excluding pre-development centres, comparable NPI growth was 2.3%

  • Portfolio occupancy of 99.5%

  • Total return of 6.8% for the six months to 31-Dec-17 and 13.4% for the 12 months to 31-Dec-17

  • Value driven through on-market security buy-back program, with 2.2% of securities acquired at a 9.6% discount to December 2017 NTA

  • Entered contracts to acquire 50% interests in, and management of, three premium Sydney CBD assets for $556 million, in exchange for a 49% interest in Chatswood Chase Sydney for $562 million

  • Sold Toormina Gardens, NSW for $41.7 million, at a 2.0% premium to book value

  • Opened key stages of The Glen and Mandurah Forum developments

  • Specialty store moving annual turnover (MAT) growth of -0.7%; adjusting for tenant administrations and including Chadstone same-store sales, growth was 0.8%

  • Chadstone same-store specialty sales growth of 6.7% and MAT growth of 27%

  • Board approval to commence Chadstone hotel project, with AccorHotels Group appointed as operator

  • Vicinity rated as number one retail property company in Australia and the Asia Pacific region for sustainability by Global Real Estate Sustainability Benchmark (GRESB) in 2017

Vicinity’s FFO guidance for FY18 is 18.0 to 18.2 cents per security and assumes securities bought back to date, approximately $300 million of non-core asset divestments in FY18 and the rent lost while the major remixes at Chadstone and QueensPlaza are undertaken.

After adjusting for the impact of portfolio changes, guidance reflects comparable FFO per security growth of 2.3% to 3.4%. Vicinity's distribution guidance for FY18 is to payout 100% of AFFO.Maintenance capital expenditure and incentives in total for FY18 are forecast to be approximately $70 million to $80 million.

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