Scentre share price falls 3% following results update

The Scentre share price is down 3% following the company's half year, unaudited results update. We look at the details of the release.

Daniel Ewing

Born in Edinburgh, Scotland, Daniel moved to the Gold Coast, Australia at age 11. Nine years later he is in his third year of University at Monash in Melbourne. While starting out in a Science Degree, Daniel realised it wasn’t for him and promptly transferred to Commerce where he has developed a passion for the stock market. When not studying, Daniel can be most often found at the beach thanks to a passion for surfing.

Published August 6, 2020 11:17 am AEST

The Scentre Group (ASX: SCG) share price has fallen lower this morning as the company provided an update regarding its half year results due to be released on 25 August. Scentre also provided an update regarding remuneration in the release. At the time of writing, the Scentre share price is trading 3.54% lower at$1.91.

performance gauge with arrow pointing to poor — Image source: Getty Images

What does Scentre Group do?

Scentre Group owns and operates a living centre portfolio in Australia and New Zealand. Scentre has retail real estate assets under management valued at $56.0 billion and shopping centre ownership interests valued at $38.2 billion. The company is best known for holding up to 42 Westfield living centres. These centres offer the company strong franchise value and boast some of the world's leading retail brands.

The Scentre share price has understandably been very hard hit this year by COVID-19 related economic shutdowns. Shopping centre traffic numbers are down, which isn't good news for the REIT or its tenants. However, the Scentre share price is down 49% this year, so it looks like much of the disappointing news may have already been priced in.

The market update

The Scentre share fell lower this morning as the company provided details ahead of its half yearly results. The company noted that it expects net operating cash flow to be in excess of $250 million. However Scentre explains that this is only a preliminary estimate and so remains subject to an external audit review.

The half year report will also provide some clarity on the value of the company's property portfolio. Scentre stated that it expects the value to decline by around 10% from the last update on 31 December 2019. This write down is primarily due to the effects of the pandemic. Having said this, the company stated that its available liquidity is steady at $4.4 billion.

In regards to remuneration, the company stated that all board fees and remuneration for the executive team will revert to their previous levels. This means that the board and executives will receive higher levels of pay despite the pandemic continuing to affect operations and, as a result, the Scentre share price.

What now for the Scentre share price?

The Scentre share price is definitely one to watch going into earnings season. Furthermore, Scentre shareholders will be praying that the pandemic is over soon in order to see a strong return for retail.

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