Real Estate Stocks Amidst Housing Slump – DHG, GMG

  • Apr 22, 2019 AEST
  • Team Kalkine
Real Estate Stocks Amidst Housing Slump – DHG, GMG

Domain Holdings Australia Limited (ASX: DHG)

Domain Holdings Australia Limited (ASX: DHG) recently announced that one of its substantial holder FIL Limited and the entities reduced its stake from 8.54% to 6.94%.

In its earlier announcement, the company updated that 2,175,316 fully paid ordinary were kept under voluntary escrow. On 29th March 2019, these shares were released from voluntary escrow. These shares are related to the acquisition of Review Property and already trading on the ASX.

The company also informed to market in its update that Jason Pellegrino as on 1st March 2019, has acquired 1,515,789 unquoted options exercisable at $3.1606.

Looking at the financial performance in 1H FY19, DHG recorded revenue of $183.9 million, up 0.3%, with a net profit of $21.1 million, which was down 14.2% pcp. Net debt on the balance sheet stood at $121.1 million compared with net debt of $126.5 million at June 2018.

Few significant changes took place during the period, which includes the appointment of Managing Director and Chief Executive Officer. DHA raised its stake and acquired a further 34.7% in Homepass Pty Limited and became a subsidiary now. Fairfax Media Ltd merged with NEC under a scheme of arrangement. DHA through CREM acquired a 100% interest in Limited, an Australian commercial property portal. A 2.0 cents per share fully franked dividend has been declared by the Board that was paid on 7th March 2019. At the current market price of $2.940, the market capitalisation of the stock stands at $1.71 billion.

Goodman Group (ASX: GMG)

Goodman Group (ASX: GMG) in its recent update announced that David Collins has acquired 5,000 shares for the consideration of $66,999.12 via on-market trade. The company also announced that Ian Ferrier acquired 3,687 shares in for the consideration of $49,268.88 via on-market trade under Directors’ Securities Acquisition Plan.

Looking at the financial performance for H1 FY19, Goodman Group delivered an operating profit of $465 million, recording a pcp growth of 10.4% with operating earnings per share at 25.5 cents, an increase of 9.4% (pcp). Statutory profit of $929.2 million consists of GMG’s share of valuation gains, other non-cash or non-recurring items and derivative foreign currency M-T-M. Moving forward, the company has raised its projection for FY19 with EPS to 51.1 cents/share, an increase of 9.5% from FY18. Goodman Group maintains its projection for the full year with the distribution of 30.0 cents/share, an increase of 7% from FY18.

Across the management and development businesses, the results reflected the continued strong performance. Focus on infill markets with robust property fundamentals, has driven partnership returns and significant growth in assets under management, which are up 24% to $43 billion.

Total AUM for the group came in at $42.9 billion with external AUM increasing to $39.6 billion. Cash and available lines of credit available to company was $3.1 billion as on December 2018, which includes $2.1 billion in cash and $1.0 billion of available lines.

The management expects to achieve the target payout ratio by growing DPS at 7% in FY19 to 30 cps.

At the current market price of $12.710, the stock is trading at 15.510x of its earnings. The market capitalisation stands at $23.13 billion. The stock is trading near its 52-week high price of $13.670.


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