Goodman Group (ASX:GMG) confirms FY22 guidance; how are shares faring?

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Goodman Group (ASX:GMG) confirms FY22 guidance; how are shares faring?

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Goodman Group (ASX:GMG) confirms FY22 guidance; how are shares faring?
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  • Goodman Group on Monday confirmed its profit guidance for FY2022.

  • The company also confirmed full-year dividend of 30 cents a share.

  • Goodman has AU$13.4 billion of development work in progress (WIP) across 89 projects.

Goodman Group (ASX:GMG) on Monday released its update for the third quarter and confirmed profit guidance for FY2022. The ASX-listed company reaffirmed its earlier forecast for FY2022 operating earnings per share growth of 23% and full-year dividend of 30 cents a share.

Goodman Group is an Australian integrated commercial and industrial property group which owns, develops, and manages real estate. This includes warehouses, large-scale logistics facilities, businesses, and office parks, globally.

By 10:30 AM (AEST), Goodman’s stock was trading at AU$20.15, up 2.44%.

The stock is down over 25% on a year-to-date (YTD) basis. In the past one year, the stock has risen over 6%, while in the past month, it has dropped over 11%. In the past six months, the stock has plunged 16%.

Key highlights

Goodman has:

  • AU$13.4 billion of development work in progress (WIP) across 89 projects
  • 3.7% like-for-like net property income (NPI) growth in managed partnerships
  • 98.7% occupancy across the partnerships
  • Low gearing of 7.2% (as of 31 December 2021)
  • Liquidity of over AU$2 billion
  • AU$68.7 billion total assets under management (AUM)

Goodman’s warning on rising costs

The real estate major has issued warning that COVID-19 and geopolitical tensions are exerting pressure on supply chains, inflating costs, and escalating execution risks.

The company also said that its assets under management growth over the next few years would be mainly supported by a boost in development activities. These are likely to surpass AU$70 billion by 30 June 2022, according to Goodman Group.

The company also said that there was a huge demand for its properties.

“The execution of our strategy in urban infill markets is reflected in our significant and globally diversified development book, high occupancy of our development completions (99%), consistently high portfolio occupancy (99%) and continued strong average market rental growth,” the company noted.

What does Goodman Group’s management say?

Commenting on the development, Goodman Group’s CEO Greg Goodman said, “Goodman has had another strong quarter with our operating results reflecting the highly targeted location of our portfolio. This has continued to produce high occupancy, cashflows, and development activity.”

“The business environment is changing, with increased interest rates, inflation, geopolitical risks and the ongoing impacts of the pandemic, however, the long-term structural drivers of demand have not changed,” he added.

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