Mirvac released Half Yearly Results to Dec 2017

Mirvac Group (Mirvac) [ASX: MGR] today released its interim results for the half year ended 31 December 2017, reaffirming operating EPS guidance for FY18 of between 15.3 cents and 15.6 cents per stapled security (representing growth of between 6 and 8 per cent), and distribution guidance of 11.0 cents per stapled security (representing growth of 6 per cent).

Key financial and operational highlights included:

• statutory profit of $465 million (31 December 2016: $508 million), due to lower property revaluation gains in the investment portfolio compared to the prior corresponding period, as well as the timing of residential lot settlements, which is in line with expectations;

• operating profit after tax of $215 million (31 December 2016: $230 million), representing 5.8 cents per stapled security ;

• half-year distribution of $186 million, representing 5.0 cents per stapled security;

• strong portfolio metrics maintained within the Investment portfolio, with high occupancy of 98.8 per cent and a weighted average lease expiry of 5.8 years;

• residential pre-sales increased to $2.9 billion (30 June 2017: $2.7 billion);

• 92 per cent of expected residential earnings (before interest and tax) secured for FY18; and

• achieved 1,164 residential lot settlements , and on track to settle approximately 3,400 residential lots in FY18. Defaults remained below 2 per cent, in line with historical averages

• net tangible assets (NTA) per stapled security increased to $2.20 (30 June 2017: $2.13);

• weighted average debt maturity increased to 6.8 years from 6.2 years (30 June 2017), following the issuance of US$400 million of Reg S European Medium Term Notes;

• gearing remained within the Group’s target range of 20.0 to 30.0 per cent at 23.8 per cent

OUTLOOK

Mirvac expect;

• Strong earnings visibility from diversified urban portfolio and asset creation capability Office and Industrial

• Strategic overweight to Sydney and Melbourne delivering results with strong rental growth and falling vacancy and incentives

• Accelerating NOI growth from modern office portfolio

• Significantly pre-let development pipeline will deliver significant NOI uplift, development profits and NTA growth Retail

• Challenging sector headwinds in Retail as expected

• Astute management, disciplined remixing and redevelopment will continue to deliver growth Residential

• Portfolio well positioned for cycle with embedded margins and capital efficiency

• Overweight Melbourne and Sydney masterplanned communities and medium density

• Strong brand, quality product and strategically located sites leveraging infrastructure and continued urbanisation

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