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Shopping Centres Australasia property group have announced a 37.4% profit fall for the financial year ending 30 June 2019. The share price is currently trading around $2.51, a fall of 1.37% in response.
SCP Property Group (ASX: SCP) operates over $3,147m in property assets including 85 company-owned shopping centres as well as 11 in unlisted funds. SCP has long term leases with both Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW), two of the retail sectors largest companies. SCP is currently operating on a P/E ratio in the mid-teens, at a market cap of $2,360m. The Company is also planning on paying a full-year dividend of 14.7 cents per share up 5.8% from last year, representing a payout ratio of 90%. This dividend payment is in line with market expectations.
SCP has reported earnings of $109.6m for FY19, a 37.4% decline on the same period last year. However, SCP has reported the earnings fall as a result of stamp duty and other one-off costs associated with its portfolio expansion. With earnings excluding non-cash and one-off items, Funds From Operations (FFO) at $141.8 Million up 24.1% compared to last year. This is a beat on market expectations of $136m. During 2019 SCP expanded their portfolio from $2,453.8m to $3,147.0m, representing acquisitions of $677.9m. The Company also has reported a 98.5% occupancy rate demonstrating the continual return SCP can expect from its asset base due to strong consumer sales.
Is SCP Property Group a good long-term investment?
The Company is looking to continually diversify their portfolio moving towards more resilient consumer markets including food, liquor, retail services, pharmacy and medical. During FY19 Food/Liquor reported 3.3% and Retail Services 4.0% sales growth. This growth in sales has shaped the Company’s guidance for 2020, announcing an expected distribution to be 15.1 cps, up 2.7% on FY19. Guidance is in line with market expectations of 15 cps.
Disclaimer:
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).
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