Region Group reaffirms guidance after narrowing first-half loss

The news: Shopping centre owner Region Group is predicting a pick up in income growth in the second half after narrowing its losses in the first half of the financial year.

The numbers: The company reported a net loss of $35 million for the six months to 31 December, a 63% improvement from a year ago, when it recorded significant asset write downs due to a fall in valuations. Revenue for the period was up 1.3% to $190.1 million. It did not declare any interim distribution. Region shares were down 1.1% to $2.22 each on the ASX at 10:57am AEDT.

The context: Region CEO Anthony Mellowes said the first half results demonstrated the resilience and quality of the company’s core portfolio of convenience-based retail properties, with 84% of gross rent coming from anchor and non-discretionary specialty tenants. Region operates 93 shopping malls across the country that are mostly anchored by supermarkets. The landlord reaffirmed its full-year earnings guidance of 15.6 cents per security and a distribution of 13.7 cents per security as it forecast a pick up in income growth in the second half.