Goodman Group (GMG)

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13 August 2020

Results 

Full Year 2020

Full Year 2019

Change

Revenue ($m)

2,633

3,025

-13%

Operating EPS (cents)

 57.5

51.6

+11.4%

Operating Profit ($m)

1,060

942

+12.5%

Bloomberg Consensus ($m)

1,063

 

 

Net Profit ($m)

1,504

1,627

-7.6%

Bloomberg Consensus ($m)

1,207

 

 

Final Distribution ($)

 0.15

0.15

 unch

Goodman Group (GMG) games the pandemic 

What happened?

  • Goodman Group (GMG) owns, develops and manages industrial properties. It has a global footprint with operations in Australia, Europe, the UK, the US and New Zealand. Earnings are generated from property investments, in addition to management and development earnings.
  • Goodman reported a full year 12.5% increase in operating profit to $1,060.2 million, up from $942.3 million in the prior year (pcp). Statutory net profit after tax fell 7.6% to $1,504.1 million, a decrease of $123.8 million compared to pcp. 
  • A final distribution of 15 cents per security was declared, bringing the full year payment to 30 cents per security – which equates to 52% of operating profit. 

Why did it happen?

  • Property investment earnings rose 14.3% in the year to $425.2 million up from $372.1 million a year earlier and comprised 28% of total earnings. GMG highlighted that its customers, including e-commerce participants, remain focussed on investment in order to improve the efficiency of their supply chains, while data centre users are looking to expand their operations. GMG has seen increased demand from customers in the food, consumer goods and logistics sectors, particularly related to e-commerce operators and those transitioning to online.
  • There was an 8.8% increase in management earnings to $511.2 million, compared to $469.7 million in the pcp, which made up 34% of total operating earnings, with the main driver being a 12% increase in assets under management (AUM).  Development earnings rose 13.1% to $575.7 million up from $509.2 million in the pcp and reflected 38% of total operating earnings.

Where to now?

  • GMG said the COVID-19 pandemic hasn’t had a material financial impact on its operations and next year is expected to bring  favourable conditions for  industrial assets. Development demand continues to increase, giving the Group confidence to grow its work in progress (WIP) pipeline, with the revenue from these projects expected to emerge during FY21 and FY22.
  • The Group expects a FY21 operating profit of $1,165 million, which equates to operating earnings per security of 62.7 cents, up by 9% compared to FY20.

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