HomeCo Daily Needs REIT profit falls 20%, meets guidance
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The news: HomeCo Daily Needs REIT met its full-year guidance and forecasted growth in FY25, but increased finance costs drove a 20% drop in profit for the year.
The numbers: Revenue was up 1% year on year to $356.1 million. Funds from operations (FFO) edged up 0.6% to $178.1 million, or 8.6 cents per unit, which was in line with guidance. So too was distribution per unit, which at 8.3 cents was flat year on year.
However after tax profit sunk 20% to $82 million, which the company attributed primarily to a $12.3 million increase in finance costs and a $8.6 million decrease in equity accounted profits.
The group owned 48 daily needs assets across Australia by the end of the year, down from 52 a year earlier, with the combined asset value lowering 1.1% to $4.607 billion.
HomeCo set FY25 FFO guidance of 8.8 cents per unit, representing 2.3% growth versus FY24. FY25 distribution guidance of 8.5 cents per unit represents a 2.4% increase on FY24.
The context: HomeCo, which owns shopping centres across five Australian states, said the result reflects the company's "strategically located metropolitan assets" which have limited exposure to "cyclical and discretionary retail expenditure".
What they said: "The strong rental reversion we are achieving demonstrates the inherent value proposition of our real estate, which is predominantly leased to leading national and ASX listed tenants," said Sid Sharma, real estate managing director for HMC Capital, HomeCo's parent company.
"Strong net operating income across the portfolio continues to support asset values despite a modest easing in capitalisation rates, which drove positive net revaluations in the second half of FY24," he said.
The source: ASX announcement
