SCA Property Group
SCA Property Group (ASX: SCP) is engaged in the management of, and investment in shopping centres, which are located in Australia. It was officially listed on ASX in 2012. The company, via release dated 12th June 2019, announced the results of its property valuations as at June 2019, wherein SCP highlighted that the total value of investment properties was reduced by $6.1 million to $3,147.0 million on the back of valuation NOI (net operating income) growth 0.4%, offset by cap rate softening of 5 basis points to 6.48% at June 2019. However, there were 15 properties, which were independently valued, and the remaining 70 properties were internally valued.
The valuations of sub-regional centres declined by $5.5 million, with an upside of 0.4% in NOI along and capitalisation rates amounted to 6.75%, reflecting an increase of 11 basis points. This is considering a softening in demand for centres with greater exposure to discretionary retail categories. In addition, the independent valuations of investment properties witnessed a fall, given the higher proportion of sub-regionals being independently valued, which included a decline of $4.8 million in the value of its centres, which are located at Kwinana, Western Australia on the back of softening of the cap rate from 6.50% to 6.75%.
In another update, SCP announced the distribution payable amounting to 7.45 cents per SCP stapled unit for the period from 1st January 2019 to 30th June 2019, an increase of 4.9% when compared to the prior period of 1st January 2018 to 30th June 2018. The distribution of payments will be done by 30th August 2019. In H1 FY19, the company reported funds from operations totaling $65.9 million, a rise of 17.5% when compared to pcp.
The current ratio of the company amounted to 1.05x in H1 FY19 as compared to the industry median of 0.56x. This implies that the company is in a sound position to address its short-term obligations when compared with the broader industry. The asset to equity ratio stood at 1.64x in H1 FY19 compared to the industry median of 1.45x. However, the return on equity was 2.1%, while the industry median of ROE stood at 5.05%. (Source: Thomson Reuters)
At market close on 13th June 2019, the stock of SCP was trading at a price of $2.630 per share, down 0.379% during the day’s trade with a market capitalisation of $2.44 billion. Today, it reached day’s high at $2.640 and day’s low at $2.595, with a daily volume of 1,603,464. Its 52-week high price stands at $2.740 and 52-week low price at $2.320, with an average volume of 2,650,823 (yearly). Its absolute returns for the past one year, six months and three months are 8.64%, -1.12%, and 3.94%, respectively.
Viva Energy REIT
A real estate sector company, Viva Energy REIT (ASX: VVR) is engaged in investing in the service station properties. It was officially listed on ASX in 2016. The company updated the market via release dated 12th June 2019, about the distribution reinvestment plan for the half-year ended 30th June 2019. A distribution reinvestment plan is proposed by the company under which investors reinvests the cash dividends in additional shares of the underlying stock on the announced dividend payment date. In addition, the company will be paying 7.18 cents per security for the half year ended 30th June 2019. However, the eligible stapled security holder of the DRP will be offered to those who are registered with the New Zealand and Australia only address.
The company, in its AGM presentation, reported distributable earnings of 14.02 cents per security in FY18, a rise of 4.5% and is ahead of guidance when compared to FY2017, while net tangible asset experienced a rise of 3.8% to $2.20 per security.
In terms of acquisition strategy, the company will continue to consider acquisition and development opportunities in line with the following investment criteria.
- Investment should be of high quality and strategically located
- Portfolio to remain geographically diversified
- Investments with strong lease characteristics
- Investment to provide security holders with potential for capital growth over time.
For FY 2019, VVR will optimise its core business and will maintain a low management expense ratio. The company will manage its balance sheet to maintain diversified funding sources with the pro-forma gearing to 32.3% at this point in the cycle. The company’s distributable earnings per security growth guidance will be in the range of 3% to 3.75% from FY2018.
The net margin of the company amounted to 102.2% in FY18 when compared to the industry median of 89.0%, indicating that the company is effectively converting its top line into bottom line as compared to the broader industry. The company’s return on equity and current ratio for the period was 10.5% and 0.24x, respectively, when compared to the industry median of 11.1% and 0.47x. (Source: Thomson Reuters)
At market close on 13th June 2019, the stock of VVR was trading at a price of $2.710 per share, with a market capitalisation of $2.1 billion. Today, it reached day’s high at $2.730 and touched day’s low at $2.680, with a daily volume of 693,644. Its 52-week high price stands at $2.730 and 52-week low price at $2.060, with an average volume of 1,416,184 (yearly). Its absolute returns for the past one year, six months and three months are 30.29%, 20.98%, and 11.52%, respectively.
Vicinity Centres (ASX: VCX) is involved in the development and management of properties along with investments. It was officially listed on ASX in 2011. The company released its valuation for the six months ended 30th June 2019. The net valuation of the overall estimated portfolio witnessed a fall of 1.3%, as a consequence of declines in the pre-development centres and Western Australian portfolio. VCX reported a gain of 1.2% in the estimated net valuation of the flagship portfolio, which demonstrated the strength of premium destination assets under the VCX management.
The effect of a reduction in valuation on net tangible asset per security is projected to be 1.7% or 5 cents when compared to $2.96 reported at 31st December 2018. The reduction in valuation is forecasted to have 0.3% impact to gearing, which is predicted to be 27.2% as at 30th June 2019, reflecting an increase of 25.1% from 31st December 2018. With the strong growth in sales contributing to an expected increase of 1.6% in valuation, the Chadstone continues to build on its leadership position. The company’s DFO centres are expected to record solid valuation growth driven by successful product remixing.
The gross margin and net margin of the company stood at 72.5% and 35.6% in H1 FY19 when compared to the industry median of 74.1% and 89.9%, respectively, while the return on equity and current ratio for the period was 2.0% and 0.15x in H1 FY19 as compared to the broader industry median of 5.1% and 0.49x, respectively. (Source: Thomson Reuters)
At market close on 13th June 2019, the stock of VCX was trading at a price of $2.590 per share, down 0.766% during the day’s trade with a market capitalisation of $9.84 billion. Today, it reached day’s high at $2.610 and touched day’s low at $2.570, with a daily volume of 8,158,663. Its 52-week high price stands at $2.835 and 52-week low price at $2.415, with an average volume of 10,907,584 (yearly). Its absolute returns for the past one year, six months and three months are -0.76%, -5.43%, and 4.40%, respectively.
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