Vicinity Centres Declares FY19 Interim Results

Vicinity Centres (ASX:VCX) is into retail asset and property management services. The Company offers a retail property investment and services organisation involved in the ownership, management, and development of retail properties. The Company operates shopping centres across Australia.

The company has through a release on the exchange posted its interim results for the HY ended 31 December 2018. The Net profit from ordinary activities for the six months ended 31 December 2018 was $235.3 million which is substantially less than the $755.9 million in the previous corresponding period (pcp). The decrease in profit was primarily due to non-cash revaluation decrements on directly owned properties and net foreign exchange movements on interest-bearing liabilities.Â

The Funds from operations (FFO) was 9.06 cents per security, which was down 0.9% on account of the impact of the divestment of 16 higher yielding, non-core assets over the span of last 18 months. NTA (Net Tangible Asset) remained relatively stable at $2.96 per security (30 June 2018: $2.97), and gearing declined by 130 bps to 25.1% following the divestment of 12 non-core assets.

The Group has a robust position statement, with a diverse range of funding sources. With $1.5 billion of debt facilities established or extended during the period, FY19 and FY20 expiries have been notably reduced, and debt duration has been maintained at greater than four years.

Asset sales to date have reduced gearing to 25.1% at 31 December 2018, being at the lower end of the 25%-35% target range. This combined with Vicinity’s investment grade credit ratings (Moody’s A2/Stable, S&P A/Stable), means the balance sheet is in a strong position for substantial reinvestment into the retail development pipeline and other value-accretive opportunities.

Following the extension of Vicinity’s on-market securities buy-back program in July 2018, 40.3 million securities (1.0% of issued capital) were repurchased in the period for $106.2 million, at an 11.1% discount to the 31 December 2018 net tangible assets per security (NTA).

On the 13th of December 2018, the Board declared a distribution for the half year ended 31 December 2018 of 7.95 cents per VCX stapled security, which equates to a total half-year distribution payable to security holders of $304.6 million. The half-year distribution is expected to be paid on 4 March 2019. As regards the Outlook, the management expects the FFO for the year ending 30 June 2019 to remain unchanged at 18.0 to 18.2 cents per stapled security.

Now, let us have a quick look at the company’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $2.55, trading down by 0.778% during the day’s trade with a market capitalisation of ~$ 9.85 Bn. The counter opened the day at $2.520, reached the day’s high of $2.590 and touched the day’s low of $ 2.520 with a daily volume of 2,923,006. The stock has provided a Year Till Date returns of 1.98% & also posted returns of -6.55%, -4.10% & -3.02% over the last six months, three & one-months period respectively. It has a 52-week high price of $ 2.835 and touched 52 weeks low of $2.360, with an average volume of 10,635,457 approximately.

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