Why the GPT (ASX:GPT) share price is sliding today

The GPT Group (ASX: GPT) share price is slipping in negative territory after announcing a earnings and guidance update for FY21.

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The GPT Group (ASX: GPT) share price is slipping into negative territory today after the company announced an update on its earnings and distribution guidance for FY21.

At the time of writing, GPT shares are backtracking 1.3% to $4.75.

Founded in 1971, GPT is a property investment company. The group owns and manages a diversified portfolio of Australian retail, office and logistics property assets.

GPT also manages three funds, the GPT Wholesale Office Fund (GWOF), the GPT Wholesale Shopping Centre Fund (GWSCF) and the GPT Metro Office Fund (GMF).

What did GPT announce?

In today's release, GPT advised that it expects to deliver an increase in both funds from operations (FFO) and distribution per security (DPS) metrics for FY21. It stated that FFO per security is set to grow 8%, with DPS soaring 12% when compared to FY20.

The guidance statement from the company's assessment that the current economic climate continues to recover. GPT noted that any significant disruptions from COVID-19 could derail its projections for the remainder of the year.

What did the CEO say?

GPT CEO Bob Johnston touched on the company's recovery and outlook, saying:

It is pleasing to see Australia's economy continuing to benefit from the post COVID-19 recovery and the disruption to our operations is abating. While risks remain, including the speed of recovery of our Melbourne Central Shopping Centre and further COVID-19 related disruptions, trading conditions over the first quarter have provided us with sufficient confidence to announce earnings and distribution guidance for the 2021 full year.

The group's high-quality portfolio has proved resilient throughout the pandemic. Consumer confidence continues to be strong driving foot traffic at our shopping centres, office utilisation is steadily increasing and demand for logistics assets remains strong reflecting the increased economic activity.

GPT share price snapshot

Over the past 12 months, the GPT share price has gained around 15%, with year-to-date sitting up roughly 5%. The company's shares reached a 52-week high of $4.94 in mid-November 2020, before treading lower and again moving higher.

Based on valuation grounds, GPT commands a market capitalisation of about $9.2 billion, with almost 2 billion shares outstanding.

Motley Fool contributor Aaron Teboneras 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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