The Scentre Group (ASX: SCG) share price is relatively flat today after the company released its results for the first half of the 2019 financial year (1H19). SCG shares are trading for $3.82 this morning after closing yesterday at $3.85.
What did Scentre have to report?
Here are some of the highlights from Scentre's results.
- Funds from operations (FFO) came in at $676.2 million or 12.75 cents per share – a rise of 3% from the prior corresponding period (pcp)
- Income came in at $994.6 million – up from $947.4 million in the pcp and a rise of 5%
- Earnings (EBIT) at $952.1 million – up from $905.3 million in pcp and a rise of 5.2%
- Project income after tax of $29 million – down from $29.5 million in pcp and a fall of 1.69%
- Total assets of $40.05 billion and total liabilities of $15.33 billion, leaving net assets at $23.8 billion – a rise of 0.68% over pcp
- Distribution per security of 11.3 cents, up from 11.08 cents in pcp and a rise of 2%
- Portfolio lease (occupancy) rate of 99.3%.
Scentre also reported that total in-store sales for the half increased by 1.5%. Retail Services, Supermarket and Discount Department Store sales were the standout performers for the half, with growth of 7.7%, 6% and 5% respectively, while Department Stores and Jewellery stores were the primary detractors, with falls of 5.1% and 4.7%.
Geographically, New South Wales and South Australia were the strongest performing states, with in-store sales growth rates of 2.4% and 3.1% respectively, while the ACT and Queensland reported sales declines of 3.7% and 0.3% respectively.
Outlook for Scentre
In response to the changing landscape for retailers, Scentre continues to focus on combining 'experiences' (including dining, cinemas, fitness, and educational services) with sales of goods in its centres – currently at a 42%/58% split respectively as a proportion of total stores. The company is expecting FFO per security to grow by approximately 3% in its outlook for 2H19 and a distribution of 11.3 cents per share – taking total dividends for 2019 to 22.6 cents per share (a rise of 2%). Scentre is also expecting net operating income growth of 2–2.5%
On the results, Scentre CEO Peter Allen stated:
We are excited about the future of our business and our ability to generate long-term sustainable growth. We will continue to invest in deepening our understanding of the customer and maintain our relentless focus on what they want as we deliver on our purpose – creating extraordinary places, connecting and enriching communities.
