Charter Hall posts profit drop, expects distribution boost

The news: Property development and funds management company Charter Hall has recorded a significant drop in statutory full-year profit. It increased funds under management (FUM) despite downward valuations driven by high interest rates.

The numbers: Group FUM were up 9.4% to $87.4 billion, but the $196 million profit was a significant step down from FY22's $911.1 million. Charter recorded operating earnings of $441 million — down from $542.8 million in FY22 — representing post tax earnings per share of 93.3 cents and distributions of 42.5 cents per security, down from 188.4 cents in FY22. CHC shares were up 3.2% at $10.73 just after 12:50pm AEST.

The context: CHC said eight years of repeated divestments totalling more than $1 billion had been key to maintaining the lowest balance sheet gearing in the AREIT sector at 2.2%. It also cited more than $7 billion in debt facilities to fund its development pipeline and future growth. With no material changes in market conditions, Charter Hall expects to lift earnings per share to 75 cents with a 6% boost to distribution into FY24.