Summary
- Charter Hall Group (ASX:CHC) has concluded its 2020 AGM with updated earnings guidance.
- Chairman David Clarke and CEO David Harrison took the stage, highlighting business challenges and opportunities.
- CHC has inked a strategic partnership with global real estate investor PGGM.
Charter Hall Group (ASX:CHC) is grabbing the headlines across media houses after it upgraded its FY2021 earnings guidance, calling FY20 as its best year despite the whole COVID-19 scenario into the play.
Group Chairman David Clarke and CEO David Harrison took the platform at the annual general meeting (AGM) of the group to present the business challenges and potential while notifying the shareholders about updated earnings guidance.
Updated FY21 Earnings Guidance and Robust FY20 Financials
The group upgraded its FY2021 earnings guidance from 51 cents a share (after tax) to 53 cents a share (after tax) while keeping the distribution per share guidance unchanged at 6 per cent growth over FY2020.
Commenting on the financial lines, David Harrison suggested that despite the COVID-19 backdrop, FY20 has been the best year ever for earnings growth with a record year of FUM growth.
The operating earnings per share of the group surged by 46.2 per cent in FY2020 against the previous financial year. Furthermore, Mr Harrison cited that the growing income streams drove the performance of the funds, leading to a splash in equity investment. The equity investment reached $5.1 billion during FY2020.
The operating earnings post tax reached $323 million or 69.3 cents a share while funds under management (FUM) increased by $10.1 billion or 33.2 per cent against a year earlier. At the end of the period, FUM reached $40.5 billion with further growth of $2.9 million so far in FY2021, leading to a total FUM of $43.4 billion (as on 11 November 2020).
How Did The Group Make it?
Taking the stage, David Clarke mentioned that while the COVID-19 pandemic had a profound effect on the property industry, the working in partnership-dominated approach sailed the group across all challenges.
Calling CHC a resilient business that is well-positioned to withstand the COVID storm on the back of its strategic pillars of Access, Deploy, Manage and Invest, Mr Clarke mentioned that the business has benefited from increased investor equity flows.
The increased investor equity flows primarily landed into the industrial and logistics funds, leading to a strong endorsement from capital partners for the Long WALE strategies.
The Chairman notified the shareholders that the outbreak boosted leaseback and sale transactions with corporates, while the approach towards finding the mutually beneficial outcomes served the Company well.
Furthermore, focus of the group on partnership with the Government and leading domestic and multinational companies resulted in a robust property portfolio across all sectors.
The group bolstered the balance sheet of its managed funds through reduced gearing, extending debt facility terms and recycling non-core asset sale proceeds into higher quality assets.
Partnership with PGGM – A Global Real Estate Investor
Taking immense pleasure in notifying the shareholders, Mr Harrison disclosed the newly built partnership with Dutch pension fund PGGM, a global real estate investor. PGGM would now invest with the group in a diversified portfolio of manufacturing, logistics, industrial, and last-mile distribution properties in Australia.
The initial partnership portfolio has already secured ~ $300 million of assets with PCGM holding an 88 per cent equity interest.
CHC traded at $14.160 on 13 November 2020 (AEDT 2:42 PM), up 1.287% from its last close.
