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Arena REIT (ASX:ARF) is a listed property group on ASX, which is into the business of real estate assets across Australia. The company owns, develops and manages specialized real estate assets. In the initial growing phase of learning and healthcare sector, the company has leased its social infrastructure to its diversified tenants.
The company today on 19 February 2019 has announced its results for the half-yearly period ended of 31 December 2018. The company has reported net operating profit of $18.3 million for the half-year ended 31 December 2018, which is an increase by 9.3% over the prior corresponding period. The net profit growth was primarily driven by the rental income growth from annual rent reviews and new rental income from acquisitions and development projects completed in FY18 and HY19.
The earnings per share (EPS) stood at 6.77 cents, an increase of 5.5% over the prior corresponding period. The company has paid a half-year dividend of 6.75 cents per security, up 5.5% on the prior corresponding period. The statutory net profit for the half-year was reported at $34.2 million, a decrease by 7.8% on the prior period, on the back of scale of revaluation gains ($18.6 million vs $21.3 million in prior period) primarily.
The total assets of the company increased by 5.2% to $763.7 million, driven by acquisitions, development capital expenditure and the positive revaluation of the portfolio. The revaluation uplift contributed to a $0.06 increase in Net Asset Value (NAV) per security to $2.03 at 31 December 2018.
Moreover, the annual rent reviews have been completed over 57% of portfolio income in HY19, with an average like-for-like rent increase of 3.1% over passing rent achieved. The average increase in market rent reviews in HY19 was 6.3%.
As of 31 December 2018, the companyâs gearing was 25.7%, increased from 24.7% at 30 June 2018 with undrawn debt capacity of $60 million to fund the development capex and new investments.
After the announcement of the HY19 result, the company today has reaffirmed its FY19 guidance for the dividend per share to be at 13.5 cents per security. This reflects growth of 5.5% over FY18, and compound annual growth in DPS since listing in June 2013 of 8.7% per annum.
On the price-performance front, the stock of Arena REIT last traded at $2.640 with a decrease of ~4% during the dayâs trade and with a market capitalisation of $747.87 million. The stock has generated a YTD return of 10.89% and posted returns of 24.43%, 20.61% and 10.44% over the last six months, three months and one-month period respectively. It has a 52-week high price of $2.770 and a 52-week low price of $2.120 with an average trading volume of ~235,024. The stock is trading at a PE multiple of 11.30x with an EPS of AUD 0.243 and with an annual dividend yield of 4.78%.
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