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Mirvac Group (ASX:MGR), a key player in the S&P/ASX 200 Index, is grappling with a significant drop in its share price following the release of its full-year results for FY 2024. After closing at AU$2.11 yesterday, Mirvac's share price plummeted to AU$1.84 during early Thursday trading, marking a 12.8% decline. Despite a slight rebound to AU$1.91 at the time of writing, shares remain down 9.3%. In comparison, the broader ASX 200 Index is down 0.6% during the same period.
Mirvac's financial performance for FY 2024 reveals a mixed picture. Key metrics include:
- Operating Profit After Tax: AU$552 million, a decrease of 5% from FY 2023.
- Operating Earnings Before Interest and Tax (EBIT): AU$860 million, up 12% from the previous year.
- Operating Earnings Per Share (EPS): 14.0 cents, down 5%.
- Statutory Loss: AU$805 million, compared to a loss of AU$165 million in FY 2023.
- Net Tangible Assets: Down 11% year-on-year.
- Full-Year Dividend Payout: 5 cents per share, unchanged from the prior year.
Strategic Moves and Achievements
In FY 2024, Mirvac executed several notable transactions:
- The company achieved approximately AU$1 billion in non-core asset sales, which management highlighted as a move to strengthen the balance sheet and improve financial flexibility.
- Mirvac secured Mitsui Fudosan as a long-term capital partner, taking a 67% interest in 55 Pitt Street, Sydney.
- The sale of the Aspect North and South Industrial precincts into the Mirvac Industrial Venture, alongside a 49% interest acquisition, was completed.
- Mirvac acquired a 47.5% interest in the AU$1 billion Serenitas platform, extending its footprint into the land lease communities sector.
- The company leased around 163,000 square meters of office, retail, and industrial space and settled 2,401 residential lots. The full-year dividend payout totaled AU$414 million, reflecting a payout ratio of 75%.
Outlook
The recent drop in Mirvac’s share price is largely attributed to weak earnings and dividend forecasts for FY 2025. The company anticipates a decline in operating earnings to between 12.0 and 12.3 cents per share, compared to 14.0 cents in FY 2024. Additionally, dividends are expected to fall to 9.0 cents per share from 10.5 cents.
Looking forward, Hanan acknowledged that market conditions will remain challenging but expressed confidence in the company's ability to recover. "We have operated through numerous property cycles over the past 52 years, and our success lies in our ability to navigate through the challenges and adapt to market conditions," he said.
