ENP Newswire -
Release date- 14082014 -
Key financial and operational highlights for the period are:
Operating profit of
Statutory profit of
Operating earnings per security (EPS)1 of 34.8
Total distribution of
Strong financial position maintained - balance sheet gearing of 19.5%3 and interest coverage ratio (ICR) of 5.9x
Group's liquidity at
Positioned to deliver target long-term EPS growth of 6%, representing forecast FY15 operating EPS of
Target distribution payout ratio unchanged at 60%, resulting in a forecast FY15 distribution of
Total assets under management of
Robust property fundamentals across core investment portfolio, with occupancy maintained at 96%, and weighted average lease expiry of 4.9 years
Development work in progress at
Goodman's Group Chief Executive Officer, Mr
The full year statutory profit of
As an Australian-listed, leading industrial property operator and fund manager with active businesses in 16 countries, Goodman's full year result reflects the quality and diversity of our earnings and the momentum across our operating platform.
Importantly, we are leveraging our entrepreneurial expertise to create value and drive the long-term growth of our business, while maintaining prudent balance sheet metrics. Accordingly, Goodman is well positioned for FY15 and we are forecasting full year operating earnings per security of
Goodman has a distinct competitive advantage in the current operating environment, which continues to be shaped by the significant customer and investor demand for prime industrial assets and a number of structural changes that are redefining the industrial property sector.
The Group is benefitting from the global reach of its diversified international operating platform, which has contributed 56% of FY14 operating earnings and enables Goodman to meet the varied needs of its customers and selectively secure high quality investment opportunities for its capital partners. This has seen Goodman's development workbook increase to
In FY14, Goodman disposed of
Such investments include
The Group continues to realise higher and better use opportunities and is making good progress on its urban renewal strategy in
Goodman is focused on delivering consistent and sustainable growth, while maintaining its strong balance sheet position. In FY14,
'The strong demand for Goodman's product reflects the focus of global investor groups to partner with a best in class industrial property sector specialist, with the proven development capability and the right infrastructure and people in place to deliver quality, stable and well performing industrial assets.
The capital inflows experienced over the last 12 months position us well to continue funding our development activities and provide significant capacity for our managed funds to participate in development opportunities from the Group and broader market. Total assets under management have increased to
Goodman is committed to building on its position as an Australian listed, leading global industrial property group and fund manager through the prudent yet active execution of its stated business strategy. The Group will leverage its proven expertise and capability, diversified global operating platform, and quality customer and capital partner relationships, to pursue opportunities and realise initiatives to drive the long-term growth of its business in a measured and sustainable manner.
Goodman's customer focused approach ensures that its quality portfolio is managed and maintained to a high standard, and is reflected in the high occupancy and retention rates achieved. Its active asset management capability ensures that opportunities to reposition assets are continually assessed, with Goodman seeking to generate additional value by identifying higher and better use opportunities for its assets, including the trend to urbanisation and property renewal in its key markets.
The Group's operations achieved an operating EBIT of
This also reflected the earnings composition, which was in line with the Group's expectations. Investments contributed 54% of operating EBIT, with 30% from developments and 16% from management services.
Underlying property fundamentals were sound over the full year period. Overall occupancy was maintained at 96%, consistent with the same period last year and the weighted average lease expiry across the investment portfolio was 4.9 years.
Investment earnings reflect the selective rotation of property assets and co-investment initiatives undertaken during the year, ensuring Goodman is capitalising on the market demand for industrial property and recycling capital into new growth opportunities.
The Group's work in progress as at
Growth in development volume is a reflection of our development led investment strategy at this point in the cycle where competition for grade A assets is strong.
Development demand remains strong, particularly in
Developments without customer pre-commitments were undertaken in selected markets that exhibit low vacancy levels are proven quality logistics locations and where the demand for assets remains high. Goodman's confidence in these markets has been supported by the 96% pre-commitment levels on projects completed during the year.
'Our development business is performing very well driven by the high level of customer and investor demand for Goodman's product and we are well positioned to pursue the best quality opportunities being generated by the undersupply of prime quality industrial space and capitalise on the structural changes taking place across our sector globally.
'In this context, we allocated additional capital to a number of our operating markets where Goodman is executing a development led strategy, including
Third party assets under management increased to
The broad range of fund initiatives completed by Goodman in FY14 reflects the continued demand by global investor groups for core, stable, and well performing assets, together with their focus on partnering with specialist industrial property providers, including those with the capability to create new product. A key driver of Goodman's success is its ability to attract third party capital into its managed fund platform, combined with the alignment of investors' interests through the contemporary fund management structures which underpin its partnering approach.
'The significant capital inflows achieved across our managed fund platform during the year is testament to the extensive partnerships we continue to build with global investor groups and the quality of Goodman's investment offering. Our managed funds achieved in excess of a 12% total return on average in FY14, highlighting the disciplined execution of their investment strategies and focus on long-term value creation for our global investors.'
As investment markets strengthen, Goodman will continue to assess opportunities to dispose of assets where value has been maximised and look to reinvest through its development pipeline and specific on-market opportunities.
'Goodman's managed funds have significant momentum and investment capacity heading into FY15, provided by
Goodman maintained its sound financial position during FY14, which was actively demonstrated with the successful completion of balance sheet recycling opportunities and its selective approach to pre-sold developments. As a result, gearing was retained at a conservative 19.5%. Interest cover remains high at 5.9 times.
Available liquidity is currently
Goodman has continued to deliver on its stated strategy of diversifying its debt funding sources and demonstrated its ongoing access to global debt capital markets. During the full year,
Separately, Standard & Poor's revised the Group long-term corporate BBB credit rating outlook to 'positive' from 'stable', together with an upgrade to
Furthermore, the Group's Distribution Reinvestment Plan was active over the full year period, raising a total of
Goodman is well positioned to grow operating earnings in FY15 by leveraging its expertise and capability as an entrepreneurial industrial property group.
The ongoing investor demand for high quality industrial assets is driving significant capital flows and strengthening asset pricing globally. This will enable the Group to selectively rotate assets, including for urban renewal opportunities, and recycle capital into new developments to enhance investor returns and drive long-term value for the Group.
Goodman's development capability and managed fund platform is attractive to capital partners, providing access to new investment product not available to investors on-market. This delivered strong total fund returns in FY14, and with
Accordingly, Goodman is forecasting full year operating earnings per security of
Group Chief Executive Officer
Tel: + 612 9230 7400
Goodman's global property expertise, integrated own+develop+manage customer service offering and significant fund management platform ensures it creates innovative property solutions that meet the individual requirements of its customers, while seeking to deliver long-term returns for investors.
Operating profit and operating EPS comprise profit attributable to Securityholders, adjusted for property valuations, derivative and foreign currency mark to market and other non-cash or non-recurring items. Operating profit is used to present a clear view of the underlying profit from operations. It is used consistently and without bias year on year for comparability.
A reconciliation to statutory profit is provided in summary on page 10 of the ASX Results Presentation and in detail on page 5 of the Directors' Report as announced on ASX and available from the Investor Centre at www.goodman.com.
Calculated based on weighted average diluted securities of 1,729.0 million, including 8.0 million LTIP securities which have achieved the required performance hurdles and will vest equally in
Calculated as total interest bearing liabilities over total assets, both net of cash and fair values of cross currency swaps used to hedge liabilities denominated in currencies other than those to which the proceeds are applied equating to
Operating EBIT comprises statutory profit before interest and tax of
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