Organic Growth Underpins Centuria’s HY22 Results10 February 2022
Leading Australian real estate funds manager, Centuria Capital Group, today credited organic growth across its real estate acquisitions, revaluations and development pipeline for delivering strong 2022 Financial Year interim results.
During the period, Centuria benefitted from $2.5billion of gross real estate acquisition in HY22, split by $1.6billion of unlisted and $0.9billion listed real estate. In addition, the quality of its existing portfolio was highlighted by a $600million valuation uplift.
Significantly, Centuria’s development pipeline grew to $2.2 billion and continues to provide committed and future opportunities for the Group’s listed and unlisted real estate funds, delivering sustainable, modern assets.
Centuria’s platform expanded to $20.2billion, of which $19.3billion is invested in a diversified real estate portfolio, which increased 17% during HY22. Its unlisted real estate funds increased 15% to $12.6billion, and its ASX and NZX-listed REITs grew 22% to $6.7billion.
Jason Huljich, Centuria Joint CEO, said, “HY22’s performance is a clear example of utilising our in-house management expertise across Australasia and servicing our expanded investor distribution network to execute on several funds management initiatives. In the past twelve months we have doubled2 our assets under management to $20.2billion from $10.2billion at HY21.
“In fact, Centuria’s growth for the half exceeded what was our entire platform value around five years ago, illustrating the strength of the Group’s growth trajectory in a relatively short period.”
The Group’s consistent growth is demonstrated with a 45% compound annual growth rate (CAGR)8. Additionally, a 12-month Total Shareholder Return (TSR)9 of 37.9% was achieved, outperforming the S&P ASX200 A-REIT Index returns of 26.1% and the S&P ASX200 Index returns of 17.2%.
Centuria specialises in seven asset classes across Australia and New Zealand, including decentralised office, industrial, healthcare, daily needs and large format retail, agriculture and real estate finance.
John McBain, Centuria Joint CEO, added “This is Centuria’s first reporting period as an ASX-200 listed entity and we are pleased to deliver such strong results for our securityholders. The Group’s momentum is credited to significant organic growth as a result of strategic corporate mergers we executed in previous reporting periods, which provided access to new markets, broader distribution lists, and new asset classes.
“During the period, Centuria’s unlisted retail investors have continued to invest strongly and we have been active in placing new assets with our institutional mandate partners, making HY22 a very successful period.
“Our enlarged platform and corresponding strong performance enabled us to upgrade our operating earnings guidance and reiterate our distribution guidance, which is a resounding achievement despite the backdrop of the ongoing COVID-19 impacts. The ability to upgrade our earnings guidance also shows our confidence in the future potential for the Group to maintain its growth momentum.”
Centuria upgraded its FY22 Operating Earnings Per Security (OEPS) guidance to 14.5 cents per security (cps), representing a 9.85% increase on its initial FY22 guidance of 13.2cps and a 20.8% increase above FY21 OEPS of 12.0cps. It reaffirmed its FY22 distribution guidance of 11.0cps.
The Group’s total operating revenues rose to $139.4million (+26% from HY21) and Operating Profit After Tax rose to $58.7million10 (+73% from HY21). Operating recurring revenues of 87% remained in line as a percentage of total revenues (HY21:88%).
Management fees of $64.7million bolstered recurring revenues. Transaction fee income of $24.4million was up 400% on HY21, resulting from $3.5billion of total transaction activity. During the period, $4.7million of cash was collected from $19.1million of recognised performance fees. Latent underlying performance fees of $24.8million were recorded across Centuria’s unlisted real estate funds.
Centuria retained a strong balance sheet as at HY22 with $241million of cash and undrawn debt on hand, an operating gearing ratio of 8.3% and strong operating interest cover ratio of 9.4 times. Balance sheet flexibility broadened with the addition of a $100 million three-year revolver facility. Net asset value (NAV12) per security increased to $2.00 (HY21: $1.92). Centuria continues to use its balance sheet to support growth initiatives across its funds management platform.
HY22 FINANCIAL RESULTS
|Operating EPS6 “OEPS”||cps||7.4||6.2|
|Distribution per stapled security “DPS”||cps||5.5||4.5|
Entities Centuria has consolidated into its business all provided contributing profit and growth across the Group platform.