Centuria Capital (ASX:CNI) delivering on FY21 strategy

Centuria had a solid FY20 result despite difficult macro ecojnomic conditions. The highlight was a 52% increase in assets under management.

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ASX real estate investment trust or REIT represented by high rise city buildings photographed from below

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Centuria Capital Group (ASX: CNI) reported solid FY20 results in August, despite exposure to bushfires, floods and the impacts of COVID-19. Today it released its annual report demonstrating it was starting to deliver on its FY21 strategy. Centuria is a real estate funds management company that provides listed and unlisted investment options. During FY20, the company increased its assets under management (AUM) by an impressive 52% over FY19. It also managed to increase operating net profits after tax by 16.6%.

Highlights of FY20 results

One of the most significant points highlighted in Centuria’s FY20 results was the growth in the company’s AUM. This was partially due to the company’s acquisition of Augusta Capital Limited of New Zealand. Other asset acquisitions were in industrial and office properties. These included two Arnott’s distribution centre assets, and a Telstra Corporation Ltd (ASX: TLS) data centre on a buy and leaseback arrangement.  

Australia’s largest pure play listed office real estate investment trust (REIT) is the Centuria Office REIT (ASX: COF). During FY20, this fund expanded its portfolio with $637 million of acquisitions. In addition, government and ASX listed tenants provided approximately 80% of the portfolio’s income, supporting the FY20 results.

Likewise, the Centuria Industrial REIT (ASX: CIP) is Australia’s largest domestic, pure play listed industrial REIT. This fund expanded its portfolio with over $300 million of acquisitions in FY20. Approximately 52% of the portfolio’s income is from tenants directly linked to the production, packaging and distribution of consumer staples.

What’s next?

Centuria has set about commencing the new financial year strongly. Notable FY21 activity to date includes $0.7 billion in real estate acquisitions, launch of the Centuria Healthcare Property Fund, and the launch of the Augusta Property Fund with $55 million in seed assets. In addition, the company has provided FY21 operating earnings per share (EPS) guidance of 10.50 to 11.50 cents per share (cps) and distribution guidance of 8.50 cps. Centuria retains a strong operating balance sheet with cash on hand of $149.5 million as at 30 June 2020, some of which has since been used for the takeover bid for Augusta Capital Limited.

Joint CEO’s John McBain and Jason Huljich commented:

Additionally, we have implemented technology to future proof our business. We recently launched our “VISION 2020” property management and finance software platform providing an integrated solution that will provide efficiency and scalability for the future.

Centuria share price performance

The Centuria share price is up 4.95% in year-to-date trading, and is currently trading at a price-to-earnings (P/E) ratio of 19.17 on today’s earnings report. It has a current trailing 12-months dividend yield of 4.21%.  

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Motley Fool contributor Daryl Mather owns shares of Centuria Office REIT. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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