Charter Hall Disclosed Half-Year Dividend Distribution With Revised Lower Payout Ratio

Charter Hall Disclosed Half-Year Dividend Distribution With Revised Lower Payout Ratio

Real Estate player, Charter Hall Group (ASX: CHC) announced the distribution of 16.5 cents per security payout for the half year ending 31 December 2018, representing an increase of 6% on 1H FY18 distribution per security of 15.6cps.

The report read that the distribution of 16.5 cents comprises of fully franked 8.2 cps dividend from Charter Hall Limited and 8.3 cps (fully franked) distribution from Charter Hall Property Trust. CHC told that the payment of this distribution would be made on or around 28 February 2019 to the shareholders present on the record date of 31 December 2018. Whereas, Securities trade ex-distribution date has been set to 28 December 2018.

Further, the Group has reduced its distribution payout ratio from 85- 95% of Operating Earnings per Security (OEPS) post-tax to 70-95% of OEPS post-tax. Charter Hall Funds Management Limited, as responsible entity for the Charter Hall Limited and the Charter Hall Property Trust, advised this change.

Charter Hall’s Managing Director and Group CEO, David Harrison said: “The Group’s focus remains on delivering sustainable growth for security holders and maintaining a flexible balance sheet. It believes this change in distribution policy allows Charter Hall to further reinvest in growing the business, providing higher returns to security holders.”

Charter Hall, however, reaffirmed the guidance of 8-10% growth in post-tax OEPS for current fiscal year over FY18. It includes the acquisition of Folkestone which is expected to be earnings accretive for Full Fiscal Year 2019.

In the Fiscal Year 2018, the Group reported post-tax operating earnings of $175.8 million, up 16.2% compared to the previous corresponding period. This is consistent with the group’s sustained long-term performance which over five years has seen Charter Hall delivering operating earnings per security post-tax growth (OEPS) of 10.5% per annum and distribution per security compound annual growth of 9.5% p.a.

As at the end of FY18, Charter Hall’s Fund Under Management stood at $23.3 billion, representing a growth of $13.3 billion during the year. The $23.2 billion property portfolio that the company invested in and managed comprised of 330 office, retail and industrial properties with nearly 2,500 tenant customers. It has been the record year for the company respect to equity inflows into its property funds management platform as wholesale, direct and listed equity inflows have all contributed including the 69% or $15.9 billion contributions by wholesale equity.

The company reported the growth of 11.7% in Property Investments which delivered a 12.3% total property investment return. Charter Hall’s NTA per security grew 6.1% despite the disinvestment of $1.0 billion during FY18.

On reducing the distribution payout ratio, the company got hit by bearish market sentiments as the stock price declined by 0.588% to $8.450 on 13 February 2019 (1:53 PM AEST).

CHC is currently trading at a Price to Earnings ratio of 15.830 x with a market capitalisation of $3.96 billion as at 13 February 2019. The stock has zoomed up by 54.55% over the past 12 months, including a surge of 19.38% in the past three months.


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