Mirvac Group (ASX:MGR): Why is this real estate giant gaining since last one year?

Image Source: © Solarseven | Megapixl.com

Highlights

  • Despite the COVID-19 impacts, Mirvac delivered a solid financial performance in 2022 first half.
  • The Group witnessed a 44% increase in its net profit on pcp.
  • The scrip has gained 3.28% in the last 12 months.

Real estate giant, Mirvac Group (ASX:MGR), has been garnering a lot of attention lately. While the scrip has gained 1% over the last week, it closed 1.588% lower at AU$2.480 per share on Tuesday.

Despite uncertain market conditions in the sector, the real estate company’s net profit increased 44% in 1H22. Further, a company’s stock price performance depends on its financial performance. Hence, MGR’s good 1H22 performance might be the reason why the stock has been gaining investors’ attention today.

Mirvac financial performance – 

As per MGR’s 2022 first half results announced in February, the real estate company reported a 9% increase in its operating profit at AU$297 million, on pcp. This also represents 7.5 cents per stapled security.

Moreover, MGR also reported AU$26 billion of total assets under management in its 1H22 report.

MGR’s integrated investment portfolio (concentrated in retail), which was significantly impacted by the extended lockdowns during the first half, was also offset by MGR’s robust performance in its development business.

Key highlights –

  • MGR’s operating earnings before interest and tax (EBIT) increased by 8% from 1H22, which stood at AU$391 million.
  • Earnings per share witnessed a 9% increase on pcp at 7.5 cents. 
  • The Group maintained a strong balance sheet with an operating cash flow of AU$413 million, up 7% on pcp.

The company has delivered on its strategy despite its commercial and residential development lockdowns. 

Image source –  © Gorilas78 | Megapixl.com

Commercial development 

During 1H22, MGR created a value of AU$121 million supported by AU$48 million of revaluation uplift & AU$73 million of commercial development EBIT. 

Related read - Why are Northern Star (ASX:NST) & Mirvac (ASX:MGR) in news today?

Residential development 

MGR’s pre-sales increased to AU$1.5 billion in the period. At the same time, the Group further launched several new apartments. 

Outlook 

With MGR’s solid balance sheet, high residential pre-sales and robust commercial development, the Group retained its FY22 guidance of at least 15.0 cents per stapled security. 

MGR share price performance

The stock has gained 3.28% in the last 12 months; however, it dropped 16% on YTD this year. Meanwhile, it has delivered an 11% return to its shareholders over five years.


 


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