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Goodman Group (ASX:GMG) is seeing its share price come under pressure on Thursday morning, with a decline of nearly 1.5% to AU$34.70. This drop follows the release of the company’s financial results for the fiscal year 2024 (FY 2024), which were announced before the market opened.
Financial Highlights from FY 2024
For the 12 months ending 30 June 2024, Goodman reported strong financial performance, although it was overshadowed by a statutory loss. Key highlights include:
- Portfolio Occupancy: 97.7%
- Like-for-Like Net Property Income (NPI) Growth: 4.9%
- Operating Profit: $2,049.4 million, reflecting a 15% increase
- Operating Earnings Per Share (EPS): 107.5 cents, up 14%
- Statutory Loss: $98.9 million
- Full-Year Distribution: 30 cents per share
Operational Success Amid Statutory Loss
Goodman’s FY 2024 results showcased a notable increase in operating profit, which grew by 15% to $2.05 billion. Operating EPS also rose by 14%, exceeding the company’s upgraded guidance of 13% growth and surpassing the initial 9% target for the year. This strong performance was attributed to robust demand for the company's warehouses and data centers, successful new developments, and a 4.9% rise in like-for-like property income.
However, Goodman faced a statutory loss of AU$98.9 million, driven by negative revaluation movements across the company and its partnerships. Despite this setback, the company maintained its distribution at 30 cents per share, consistent with the previous year.
CEO Commentary and Strategic Focus
Goodman’s CEO, Greg Goodman, expressed satisfaction with the company's performance, highlighting the critical role its warehouses and data centers play in supporting global economic flows. He noted, “The expansion of the digital economy continues at pace, driven by e-commerce, cloud computing, and advancements in technologies such as artificial intelligence and machine learning. This is creating significant opportunities for Goodman to develop the infrastructure our customers need.”
Goodman’s operational success was driven by its strategic focus on logistics and data center opportunities in key cities with high barriers to entry and limited supply. This strategic positioning has supported the company’s strong results despite global market uncertainties.
Conservative FY 2025 Guidance and Market Reaction
The decline in Goodman’s share price may be attributed to the company’s conservative guidance for FY 2025. Goodman is forecasting an operating EPS of 117.2 cents, representing a 9% increase from FY 2024. Given Goodman’s history of underpromising and overdelivering, there is potential for this guidance to be revised upwards as the year progresses.
The company also plans to maintain its distribution at 30 cents per share, reflecting its commitment to providing consistent returns to shareholders.
