GPT Group shares climb as first-half result beats expectations
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More news: GPT Group shares gained on the ASX after the property investor's first-half earnings came in ahead of expectations and reaffirmed FY24 guidance.
GPT shares were up 2.7% to $4.81 by 1:50pm AEST.
Jarden analysts said GPT's first-half result was slightly ahead of expectations, but noted that a 4% drop in distribution per unit guidance highlights that underlying cash flow remains under pressure with rising tenant incentives.
They noted that operating performance in retail and logistics remains strong despite a slight increase in vacancy. Whilst office occupancy is stable, GPT continues to see high levels of incentives, they said.
What they said: "Funds under management are up strongly at $34.4 billion, which the group is arguably not getting enough credit for," the analysts said.
"GPT shares have performed well in the last three months but continue to lag peers over the last six and 12 months, which looks overdone to us. Key catalyst will be evidence the new management team can deliver superior and more consistent growth and returns."
GPT Group swings to half-year loss
The news: Property investor GPT Group has widened its half-year loss on the back of a devaluations in its office portfolio and higher financing costs.
The numbers: Net loss for the six months to June widened to $249.4 million from $1.1 million a year earlier. This was mainly due to a $566.8 million decline in its investment property valuation.
Funds from operations were $309.1 million or 16.14 per security, and GPT declared an interim distribution of 12 cents per security, down from 12.5 cents a year ago.
GPT shares were up 1% to $4.73 in early trading on the ASX.
The context: The weaker result comes amid a rapid increase in interest rates that has lifted GPT’s cost of debt, while the rise in bond yields resulted in further softening in the valuation of the group's property portfolio.
Funds from operations were largely stable as contributions from the retail and logistics segment offset lower income from the office segment.
What they said: "GPT’s first-half performance reflects the strength of the group’s diversified portfolio and our disciplined approach to capital management. We remain on track to deliver on 2024 full-year guidance provided earlier in the year," CEO Russell Proutt said.
The sources: ASX announcement, Jarden research
