Centuria Capital (ASX:CNI) share price falls despite record acquisitions

The Centuria Capital share price is flat in morning trade following on the release of the Group’s half year results. We look at the details.

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The Centuria Capital Group (ASX: CNI) share price is flat in morning trade. At the time of writing, the Centuria share price is down 0.8% to $2.46. The fairly muted share price moves come after the release of the specialist real estate funds manager’s half-year 2021 financial results this morning.

What financial results did Centuria Capital report today?

In this morning’s release, Centuria Capital reported that strong results in the first half of the 2021 financial year. This enabled it to upgrade its distribution guidance. Previously at 9 cents per share, the distributions per security were upgraded to 10 cents per share.

Centuria will pay an interim dividend of 1.2 cents per share.

The company reported operating earnings per stapled security of 6.2 cents per share for the half-year, with distributions of 4.5 cents per share.

Assets under management (AUM) reached $10.2 billion, up 16%. That was driven by $1.5 billion in direct real estate acquisitions, totalling 24 assets. Centuria also reported a $1.6 billion development pipeline and a 12-month total security holder return of 22.0%.

Operating profit after tax for the half-year was $34 million. This was up compared to $33.4 million for the first half of the 2019 financial year. The company ended the half with $168 million cash on hand.

Comments from the CEO

Addressing the results John McBain, Centuria Joint CEO, said:

We’ve had a strong start to FY21, delivering on our corporate dual strategy of direct real estate and corporate acquisitions. Operating businesses we’ve acquired throughout the past three years, namely the 360 Capital industrial portfolio, Heathley Limited and Augusta Capital, are now contributing strongly to our AUM growth.

We credit this two-step growth approach to underpinning Centuria’s 33% compound annual growth rate (CAGR) in AUM throughout the past five years. The strategy has also resulted in our second guidance upgrade during FY21, from 8.5 cents to 9.0 cent and now 10.0 cents per stapled security. As the effects of COVID-19 unwind and greater certainty emerges, we have also reaffirmed FY21 earnings guidance.

Commenting on the record acquisitions for the half, Jason Huljich, Centuria Joint CEO said:

HY21 was a record half year period for acquisitions, which averaged about one transaction a week. Of the 24 assets secured, 47% were transacted on sale and leaseback terms and 57% on triple-net leases, the latter of which provides great value to our investors as these assets require minimal capital expenditure and maintenance costs.

The company launched 2 new unlisted funds during the half-year with 2 more unlisted fund launches currently in the works.

Centuria Capital share price snapshot

Centuria Capital’s share price has come back strongly since last autumns viral selloff and is now up 0.4% over the past 12 months. By comparison, the  S&P/ASX 200 Index (ASX: XJO) is down 2.6% over the last year.

So far in 2021, Centuria’s share price is down 4.6%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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