Scentre (ASX:SCG) share price leaps higher on 28% profits boost

The retail property giant released its half-year results this morning.

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The Scentre Group (ASX: SCG) share price is off to a strong start on Tuesday, up 4% in early trade.

This comes as the ASX 200 retail property group released its half-year financial results for the 6 months to 30 June earlier today.

Scentre share price lifts off on half-year results

Here are the highlights:

  • Operating Profit increased 28.0% from the prior corresponding period (pcp) to $460.1 million (8.88 cents per security)
  • Funds From Operations (FFO) increased 28.4% from the pcp to $463.4 million (8.94 cents per security)
  • Statutory Profit of $400.4 million
  • Dividend of 7 cents per share (no dividend was declared in the pcp)

What happened during the reporting period for Scentre Group?

During the 6 month period, Scentre reached annual sales through its platform of $23.4 billion, despite numerous lockdowns across Australia's major cities.

Scentre's share price could also be getting a lift after the company reported that demand for space in its Westfield Living Centres continued to be strong.

It completed 1,515 lease deals over the 6 month reporting period, signing on 619 new merchants. 98.5% of Scentre's portfolio was leased as at 30 June.

The company will pay the dividend (a total payout of $362.9 million) to eligible shareholders on 31 August.

What did management say

Commenting on the half-year results, Scentre Group's CEO Peter Allen said:

We have delivered strong operating performance even with a number of government restrictions in place. In those locations impacted less by lockdowns, we have seen trading conditions better than those experienced in the first half of 2019.

We collected $1.2 billion of gross rent during the first half of 2021, representing an increase of 37% or $325 million compared to the first half of 2020. Visitation rapidly rebounded when restrictions were eased. Customers want to return to our Westfield Living Centres as what we offer is integral to their lives.

Addressing the viral elephant in the room, Allen added:

All Westfield Living Centres have remained open during the period, operating with COVID Safe protocols and in line with the latest health and government advice. We are facilitating community access to COVID-19 vaccinations across all of our Westfield centres.

What's next for Scentre Group?

Looking ahead, Scentre said it's on track to launch its "aggregated click and collect platform" in the second half of 2021.

It expects to complete work for Cbus on the construction of a residential and office tower in Sydney in 2023.

Scentre's $55 million entertainment, leisure and dining precinct development at Westfield Mt Druitt is expected to open in the first quarter of 2022.

The company said it has available liquidity of $5.7 billion, which is enough to cover all its debt maturities to early 2024. Scentre Group maintains "A" grade credit ratings with S&P, Fitch and Moody's.

Management is aiming for a 14 cent per share full-year dividend payout for 2021, noting this is based on government virus restrictions "substantially" easing by the end of October.

The Scentre share price is down 5% over the past 6 months.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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