Scentre posts in-line H1 result despite retail slowdown
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The news: Westfields owner Scentre Group met analysts' expectations for the first half of the 2024 financial year, despite a slowdown in consumer spending and an ongoing rise in interest expenses.
The numbers: Funds from operations (FFO) totalled $568.2 million, up 2.1% compared to the previous corresponding period, in-line with average analysts' forecasts. Distributions of $446 million, or 8.6 cents per share, grew 4.2%. Revenue added 2.1% year on year to $1.28 billion, as profit after tax jumped 170.3% to $403.9 million.
Scentre recorded an unrealised property valuation decrease of $120 million during the first half, with the group's portfolio now valued at $34.3 billion.
The group, which owns 42 Westfield destinations across Australia and New Zealand, said customer visits increased by 1.9%, or 6 million visits, to 320 million visits compared to the same period last year.
Scentre reaffirmed FFO guidance of between 21.75 to 22.25 cents per share for FY24, representing 3% to 5.4% growth for the year. Distributions are expected to be at least 17.20 cents per share, representing a minimum of 3.6% growth.
The context: Jarden analysts noted that Scentre's reaffirmed guidance "suggests some upside risk" to consensus expectations, despite a slowdown in consumer spending and an ongoing rise in interest expense. Leasing metrics continue to look solid despite a slowdown in retail sales growth and re-leasing spreads, they noted.
What they said: Scentre CEO Elliott Rusanow said: "Our portfolio includes 670 hectares of land holdings. These substantial land holdings, combined with our destinations' strategic locations, has the potential to provide significant long term growth opportunities for the group."
"We are now focusing on further understanding and unlocking these and other strategic growth opportunities," he said.
The source: ASX announcement
