Stockland shares rise on guidance upgrade, Lendlease deal approval

The news: Property developer Stockland has upgraded its full-year guidance for funds from operations after receiving all regulatory approvals for the acquisition of 12 communities projects from Lendlease.

The numbers: The company now expects funds from operations per security to be in the range of 33 to 34 cents for FY25, up from the previous guidance of 32 to 33 cents.

The context: Stockland on Monday confirmed it has now received all regulatory approvals for the $1.06 billion acquisition of 12 residential master-planned communities by Stockland Supalai Residential Communities Partnership, first announced in December 2023. The increase in the FFO outlook incorporates the part-period earnings contribution from the acquisition, with a larger skew in MPC settlements to the second half of the fiscal year. The group also expects to see gearing increase from the 24.1% at 30 June but stay within the target range of 20%-30% for 31 December.

Stockland expects MPC settlement volumes of between 6,200 and 6,700 lots at an average operating profit margin in the low 20 per cent range, compared to its previous expectation of 5,300–5,700 lots.