Half Year 2024 Vicinity Centres Earnings Call Transcript
Key Points
- Vicinity Centres (ASX:VCX) delivered a net profit after tax of $223.5 million for the six months ended December 31, 2023.
- Retail sales for the first half remained positive, increasing 1.5%, with specialty store productivity up more than 11% since pre-pandemic.
- The company declared an interim distribution of $0.0585 per security, representing a payout ratio of 83.7% of AFFO.
- Vicinity Centres (ASX:VCX) has a strong balance sheet with conservative gearing at 26.3%, providing resilience against potential market volatility.
- The acquisition of the remaining 49% interest in Chatswood Chase and the ongoing redevelopment projects at Chadstone and Chatswood are expected to drive significant growth.
- Headline FFO was slightly below the prior year at $345.6 million, with a 3.2% decrease compared to the previous period.
- The company recorded a net property valuation loss of $143 million, driven by an 18 basis point softening of cap rates.
- Despite positive leasing spreads, the company has a cautious outlook for the second half of FY24 due to potential moderating retail sales.
- Higher interest expenses increased by 8.4%, primarily due to rising interest rates.
- The retail environment remains uncertain, with factors such as inflation, interest rates, and employment markets impacting future performance.
Thank you for standing by, and welcome to the Vicinity Centres FY24 interim results call (Operator Instructions) I would now like to hand the conference over to Peter Huddle, CEO and Managing Director. Please go ahead.
Good morning, and thank you for joining us for Vicinity Centres results call for the six months ended December 31, 2023. Joining me on today's call is Adrian Chye, our Chief Financial Officer. Before we begin, I'd like to acknowledge the traditional custodians of the lands on which we'd meet today and pay my respects to their elders past and present, I extend that respect to Aboriginal and Torres Strait Islander peoples on the call today.
I will start today's presentation on slide 5. We've had a strong start to the first half of FY24 with the hallmarks of today's results demonstrating execution and strategic progress and continuing the momentum
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