Goodman Group announced yesterday (August 19, 2010) its full year results for the financial year ended June 30, 2010.
Key financial and operational highlights for the period are:
- Operating profit after tax of US$310 million
- Fully diluted operating earnings per security (EPS) of 5.25 cents
- Distribution per security (DPS) of 3.4 cents
- Statutory accounting loss of US $562.6 million, approximately 90% of which was incurred in the first half, reflecting property and equity investment revaluations and other non-operating items
- Strong financial position with balance sheet gearing now at 24.9% and interest coverage ratio (ICR) of 3.8x providing strong covenant headroom
- Net tangible assets ratio (NTA) of US $0.47 per security
- Group's liquidity has increased to US$1.7 billion at the date of this release, with all debt maturities covered to 1H FY2013
- Forecast FY11 operating profit after tax within a range of US $370 to US $380 million, which equates to fully diluted operating EPS of 5.3. to 5.5 cents.
- Stable core investment portfolio, with occupancy at 93%, up 1% since December 2009 on a like for like basis, at a weighted average lease expiry of 5.5 years
- US $1.3 billion of new third party equity raised from institutional investors across our managed funds platform
- US $1.2 billion of new developments have commenced at an average yield on cost of 9.4%, substantially pre-committed and matched to third party capital
- Group controlled development pipeline in excess of US $10 billion across all markets, with forecast GLA of over 7 million m².
Goodman Group Chief Executive Officer, Mr Greg Goodman said, "Today's result highlights the operating momentum that has been building across our business during the year and has continued into FY2011, despite a challenging global environment. Importantly, we have completed a number of initiatives at the Group level and in our managed funds during the year that have secured a strong platform for growth. This has ensured we are currently well positioned and, equally for when market conditions improve across our key markets.
"During the year we introduced a number of new global investor groups, Canadian Pension Plan Investment Board (CPPIB), CB Richard Ellis Realty Trust (CBRERT) and China Investment Corporation (CIC), which have enabled Goodman to realize a range of strategic opportunities. Our managed funds platform also continued to gain support from institutional fund investors with US $1.3 billion of new third party equity raised for our Australian, UK, Continental Europe and China platforms.
"The reactivation of our US $10 billion development pipeline has been undertaken on a prudent basis. We have commenced US $1.2 billion of new projects during the year and these have been primarily matched with third party capital."
Strategy and outlook
Goodman expects a continuation of the subdued global market conditions, contributing to a low growth environment, with ongoing limited access to capital and reduced competition. This in turn is expected to generate a smaller number of opportunities but of higher quality across the industrial property sector. Goodman is well positioned to capitalize on these opportunities given its specialist industrial focus; proven capability; leading global operating platform; extensive relationships with customers and investment partners; and strong balance sheet.
Goodman is committed to the strategy enunciated at the time of the recapitalization, while also recognizing that the outlook requires the Group to adopt a prudent yet active approach in delivering this strategy. The Group's key areas of focus are:
- Maintaining a high quality, diversified industrial property portfolio as its primary source of earnings;
- Enhancing value through its active asset management expertise;
- The prudent rollout of the Group's US $10 billion development pipeline;
- Expanding relationships with majo