Goodman Group upgrades FY24 outlook

16 February 2024

Goodman Group released its results of $1.1 billion in operating profit, up 29% compared to the same period last year. As a result, earnings per security landed at 59.2 cents.

The Group is strategically positioned to benefit from the growth in essential infrastructure required to service the digital economy. The acceleration of new opportunities, including data centre projects, is a catalyst for the Group to optimise its overall return on assets. The business has performed strongly in the first half, and as a result, the Group expects to achieve full-year OEPS growth of 11% compared to the previous guidance of 9%.

Property investment earnings are up 7% to $278.2 million, and occupancy remains high at 98.4%4. Like-for-like net property income was 5.0%4. The cumulative growth in market rents in recent years has resulted in the portfolio being 25% under-rented on average6, providing support for growth in future cash flows, net property income growth, and valuations.

Development earnings were a strong contributor to the Group’s operating profit, increasing by 33.6% to $804.7 million (1H23: $602.4 million). The Group’s skilled site selection, growth in rents, risk management, and cost control, have resulted in continued strong development metrics and margins being maintained. Development completions are 97% leased, with 68% of the $3 billion of commencements pre-committed, and WIP is stable at $12.9 billion – all demonstrating the continued demand for our properties.

Group Chief Executive Officer, Greg Goodman said, “Our focus on providing the essential infrastructure for the digital economy is supporting the positive outlook for FY24. Data centres will be a key area of growth and the acceleration of data centre activity is a catalyst for the Group to consider multiple opportunities to enhance its returns. We continue to assess the Group’s capital allocation to both existing and potential opportunities to provide the best risk-adjusted returns. Key to this will be the active rotation of our capital to fund sustained earnings growth over the long term.”

The Group’s distribution per security will be at 15.0 cents for the first half of the financial year.