Why Should You Pay Attention to ASX 200 Dividend Players in Real Estate: Mirvac share price

Summary

• The property market is trying hard to survive the turmoil caused by coronavirus; however, some economists say that the actual damage on property prices is yet to be seen in the future.
• Companies that offer dividends to its shareholders can provide inherent stability and reliability during the time of market turmoil.
• During FY20, Mirvac Group achieved solid results amid challenging conditions, and is well positioned amid the crisis.
• The Group declared a total 9.1 cents distribution for the financial year 2020, in line with trust operating cash flows.

Investors prefer high dividend blue-chip shares as these offer them stability and reliability. The companies that offer high dividends also provide a steady income to the investors. Mostly, the well-established dividend-paying shares have a tendency to increase their dividend payouts on an annual basis. Dividend paying companies have shown growth and development even during the recession period.

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During the COVID-19 pandemic, the property sector remained one of the most hard-hit sectors. Restrictions to slowdown the spread of virus, with measures like lockdown & social distancing, prohibited buyers from evaluating properties or taking part in auctions.

While it is becoming difficult for real estate industry to survive during the crisis, some economists say that the actual loss in the property prices is yet to surface in the upcoming time. Some banks are proposing a low-interest rate on home loans & property prices are also falling. Hence experts suggest that the market situation appears ideal for making the better deal.

Amid the current scenario, we will discuss ASX 200 listed dividend player- Mirvac Group.

Mirvac Group Reported Robust Results in Amid Market Turmoil

About the Company

ASX 200 listed leading, diversified real estate investment company Mirvac Group (ASX:MGR) is engaged in the business of property asset management, real estate investment & development and 3^rd party capital management activities. Through the end-to-end model, the Group creates, manages, and own better-quality assets in Australia.

On 20 August 2020, Mirvac Group disclosed its full-year FY20 results (year ended 30 June 2020)

During FY20, the Group achieved robust results amid challenging conditions, key highlights from the same are as follows-

• Operating profit of A$602 million was noted by Mirvac, down 5% on FY19, demonstrating 15.3 cents per stapled security (cpss) and DPS of 9.1 cpss.
• During the period, operating EBIT was reported at A$796 million, down by 6%.
• During the period, the Group achieved a three-year rolling return on invested capital of 8.9%.
• Mirvac Group expanded the Group development pipeline to A$23.8 billion across mixed-use, industrial, residential, office, residential and build to rent, offering upcoming value and optionality.
• In the fiscal year 2020, the Group released Planet Positive: Waste & Materials, mapping its journey to deliver zero waste to landfill by 2030.
• Mirvac Group initiated pre-leasing on its first BTR project, LIV Indigo at Sydney Olympic Park.
• The Group acquired two additional Melbourne based BTR projects, extending the pipeline to ~1.7k apartments through four projects.
• In its office portfolio, the Group maintained high occupancy to 98.3%, with a WALE of 6.4 years. Total office asset revaluations provided an uplift of nearly A$282 million (4%) over the previous book value.
• The residential portfolio delivered operating EBIT of A$225 million, rising by 12% on FY19.
• In retail, high occupancy of 98.3% was maintained, with nearly 92% of GLA open and trading, as on 30 June 2020.
• In its industrial portfolio, Mirvac Group maintained a high occupancy of 99.4%, with a WALE of 7.4 years.

Mirvac’s CEO & Managing Director, Susan Lloyd-Hurwitz, stated-

Key metrics of COVID-19 impacts-

• During FY20, the net impact on earnings reported at A$86 million, which includes-
  • A$48 million for provision of rental receivables and waivers,
  • A$23 million new business and residential project write-offs and other items, including lower NOI from Tuckerbox investment.
• The net impact on earnings because of postponements was reported at A$32 million, the other reasons were mainly residential settlements, and timing of residential development payments.

Dividend/Distribution update-

The Group paid 6.1 cents per stapled security (cpss) of interim distribution on 28 February 2020, and the final distribution of 3.0 cpss is payable on 14 September 2020. The total distribution for the financial year 2020 stands at 9.1 cents, in line with trust operating cash flows.

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FY21 Outlook

Mirvac stated that FY21 is anticipated to be a challenging year as the numerous economic and social outcomes of the COVID-19 pandemic impacts the broader property industry and Mirvac’s business.

Given the challenging situation, Mirvac does not have adequate certainty to provide any earnings guidance for FY21.

Subject to the unpredictable nature of these yet unidentified effects of ongoing turmoil, Mirvac shall target a distribution payout ratio of 65-75% of operating earnings for the fiscal year 2021. This distribution payout ratio is in accordance with its distribution policy to pay up to a maximum of 80% of operating earnings.

Stock Information- On 31 August 2020, MGR share price last traded at A$2.11 up by 0.957% from its previous close. With a market capitalisation of A$8.23 billion, MGR stock has 3.94 billion outstanding shares trading on the ASX.

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