Charter Hall Group shares soar despite swinging to full-year loss
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The news: Shares in Charter Hall Group soared at market open on the ASX as its earnings were better than expected while it swung to a full-year loss for the 2024 financial year.
The numbers: Charter Hall shares were up 13.6% to $13.74 by 11:05am AEST, making it one of the best performing stocks across the ASX 200.
The property development and funds management company saw group funds under management (FUM) reduce by $6.5 billion to $80.9 billion.
Property FUM contracted by $6.3 billion to $65.5 billion driven by devaluations of $6.1 billion and divestments of $2.4 billion offset by acquisitions of $1.7 billion and capital expenditure and development spend of $500 million.
Charter Hall swung to a statutory loss after tax of $222.1 million from a $196.1 million profit a year earlier. Operating earnings per share (EPS) of 75.8 cents was down 18.8% year on year but compared favourably to consensus forecasts of 75.2 cents. Distribution per unit of 75.8 cents increased 6.05%, in-line with analysts' expectations.
The group guided operating EPS guidance of 79 cents per share in FY25, and distribution per unit guidance of 6% growth compared to FY24.
The context: Charter Hall's managing director and group CEO David Harrison noted that the group is "well positioned to take advantage of a lower interest rate environment" as the economy slows and inflation trends moderate.
He said that current market pricing is offering attractive long-term returns for stabilised core real estate products and value-add development and opportunistic strategies, and expects capital deployment will increase to take advantage of market conditions.
Jarden analysts said that "most metrics looked better than feared" and the Charter Hall was "managing this downturn well".
What they said: "We would argue much of this environment is reflected in the share price," Jarden analysts said. "[Charter Hall] has underperformed in the fund management peer group in the last 12 to 18 months, and a recovery in property sentiment and transaction markets should eventually lead to a significant [operating earnings per security] recovery and re-rating."
"The recovery will likely take time but we like the risk-reward on a 12-month plus timeframe but expect the share to remain volatile in the near term," they said.
The sources: ASX announcement, Jarden research
