Goodman Group (GMG) SNAPSHOT
Profile: Goodman Group (GMG) is a global property group which owns, develops and manages industrial real estate such as warehouses, business parks and logistics and industrial facilities. Its customers include businesses in sectors including logistics, automotive, retail and e-commerce. GMG’s investment management operations provide institutional investors, such as pension funds, sovereign wealth funds and asset managers, access to specialist investment management services as well as commercial and industrial assets.
History: GMG listed on the ASX in 1995 as the Goodman Hardie Industrial Property Trust with eight properties. In 2000, GMG merged with the Macquarie Industrial Trust and traded as the Macquarie Goodman Industrial Trust. In 2005, GMG changed its name to Macquarie Goodman Group following several mergers and acquisitions. In 2007, GMG rebranded globally as Goodman under a single brand.
Earnings composition: The Development segment generated $509m, or 38%, of GMG FY19 net revenue. The Property Investment division reported $372m, or 27%, of revenue and the Management division generated $470m, or 35%.
Most recent result – FY19: Operating profit was up 11% on the prior corresponding period (pcp) to $942m. Operating EBIT was up 15% on the pcp to $1,083m. Management earnings were up 48% on the pcp to $470m, driven by the strong performance of partnerships as well as AUM growth. Development earnings increased 4% to $509m. Property Investment earnings were down 3.3% on the pcp to $372m due to prior asset sales. Like-for-like net property income growth was 3.3%. Statutory profit was up 48% to $1,628m, which includes valuation gains (c.$872m) as well as non-cash items. A 15 cent distribution was previously declared, resulting in a full year distribution of 30 cents, up from 28 cents in FY19.
Company outlook: GMG expects FY20 EPS to increase 9% on the pcp to 56.3 cents per security (cps). Operating profit is forecast to increase 10.4% to $1,040m. GMG aims to hold the distribution per security at 30cps in FY20 and is targeting a payout ratio in the “low 50% range”. GMG expects Development work in progress (WIP) to exceed $5bn in FY20, up from $4.1bn as at FY19.
Important dates: Ex-dividend date was 27 June 2019. Payment date is 9 September 2019. AGM is scheduled for 20 November 2019.
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