Abacus Profits from Commercial & Storage Sectors


Abacus announced its results for the half-year ended 31 December 2018 this week.

Financial results

  • Group statutory profit of $127.8 million in HY19, up 9%

  • Abacus underlying profit of $72.0 million, down 7%

  • Distribution per security (DPS) of 9.25 cents, up 2.8%

  • Abacus Funds from operations (FFO) of $65.3 million, down 18%

  • FFO per security of 11.3 cents, down 18%

  • Net tangible assets (NTA) per stapled security of $3.29, up 3.5%

  • Gearing at 22.8%, down 50 basis points on FY18

Commercial portfolio

  • $33.8 million FFO contribution, from Commercial portfolio valued at $1.365 billion

  • Like for like rental growth in Office up 9.2%, driven by eastern seaboard CBD

  • Acquisitions completed within the Commercial portfolio during the half including:

  • 50% interest in "Kingsgate", a quality fringe office asset in Brisbane OLD, in partnership with Heitman LLC

  • 50% interest in fringe office development site in Church Street, Richmond VIC, in partnership with Salta Properties.

Self Storage portfolio

  • $23.6 million FFO contribution, with Self Storage portfolio valued at $835 million

  • 16.1 % compound annual growth in Self Storage AUM, since HY14

  • Strong passing yield of 7.0% on established portfolio

Multi-pronged growth strategy in Self Storage with $153 million of acquisitions, developments and operating platform initiatives including acquisition of a minority 25% stake in Storage King, driving self storage profitability and synergistic benefits.

Valuations across the portfolio provided a boost to profits with a $60M (3.2%) gain in total asset value to $2,200M.

Abacus is positive on its outlook and market positioning in the Office and Self Storage sectors, expecting these activities to drive attractive risk adjusted returns for our stakeholders in the short to medium term. The Group remains cautious on the Residential and discretionary Retail sectors.

The Group's capital allocation priorities are confirmed as:

  • Increasing our investment in longer dated core plus and develop to core Office assets

  • Increasing our investment in Self Storage

  • Exploring capital partnering opportunities with experienced groups

Abacus confirms distribution guidance of 18.5 cents per security for FY19.

ABP Trading Chart vs ASX200 AREITs

Blue - ABP

Purple - ASX200 AREITs

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SYDNEY   NSW   1225

Tel: +61 412 173 476

Email: warwick@cmaust.com

ABN: 32 610 910 819

AFSL: 493605

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