Slam dunk: Centuria (ASX:CNI) share price slips amid growth-filled half-year

Centuria was busy scoring acquisitions in the half-year, and it's paid off.

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Key points

  • The Centuria share price is moving to the downside after releasing its half-year results
  • Growth was recorded across all of the company's important metrics
  • The group continues to maintain focus on expanding its portfolio of real estate assets

The Centuria Capital Group (ASX: CNI) share price is slipping in morning trade on Wednesday. This follows the release of the property funds manager's half-year results.

In early morning trade, shares in the group are fetching $3.03 apiece, down 0.66% from their previous close.

Centuria share price scores with impressive half-year earnings

  • Group total operating revenue up 26% to $139.4 million
  • Operating profit after tax up 73% to $58.7 million
  • Statutory earnings per share (EPS) of 13.8 cents per security, up 84%
  • Reaffirmed FY22 distribution guidance of 11 cents per security
  • Cash and undrawn debt finished at $241 million
  • Net asset value of $2, up from $1.92 in the prior corresponding period
  • Distribution of 5.5 cents per stapled security (cps) for the half, compared to 4.5 cps in HY21

What happened during the half?

It was an extremely busy six-month period for the real estate funds manager. During HY22, the group undertook multiple property acquisitions. As a result, Centuria's real estate funds management platform increased 17% to $19.3 billion.

Additionally, unlisted and listed assets under management (AUM) organically grew by 15% and 22% respectively. This took the total value of these assets to $12.6 billion and $6.7 billion. Centuria fuelled this solid growth by acquiring $2.5 billion worth of real estate during the half, including:

  • $63 million for a commercial office building at 21-25 Nile Street, Port Adelaide
  • $83 million for a commercial office building at 25 Grenfell Street, Adelaide
  • $88 million for prime agriculture real estate at 264 and 318 Copelands Road, Warragul
  • NZ$291 million in aged care real estate across Australia and New Zealand

In particular, the Centuria share price rallied in response to the expansive asset acquisitions across the healthcare sector in December. In total, 38 aged care assets in New Zealand were purchased — all of which are operated by Heritage Lifecare.

What did management say?

Centuria Capital Group joint CEO Jason Huljich commented:

HY22's performance is a clear example of utilising our in-house management expertise across Australasia and servicing our expanded investor distribution network to execute on several funds management initiatives. Centuria's growth for the half has delivered more than the AUM of the entire Group's platform around 5 years ago. Our strategies for each of our real estate verticals complement our specialist approach to actively managing our real estate funds.

Meanwhile, Centuria's other joint CEO, John McBain, said:

It has been particularly pleasing to witness the consolidation of revenue streams from recently acquired business units in combination with a very strong contribution from organic property fund acquisitions, both listed and unlisted. Centuria's unlisted retail investors have continued to invest strongly and we have been active in placing new assets with our institutional mandate partners, making HY22 a very successful period.

What's next?

On the topic of future outlook, both joint CEO's reflected a drive to continue consolidating Centuria's leading position. To do this, the group plans to take advantage of its "significant deal flow". This may include the group's off-market opportunities and its active development pipeline.

In addition, Centuria noted an expectation to pull multiple growth levers on its real estate funds management platform. This will play an important role in generating future performance fees growth for the group.

Centuria share price snapshot

Lastly, it has been a challenging start to the year for the Centuria share price. So far in 2022, shares are down 13.4%, despite the group upgrading its earnings guidance in January.

Fortunately, on a one-year timeline, ASX-listed Centuria remains 22.2% ahead. Given the recent dent in the valuation, Centuria is now boasting a dividend yield of 3.6%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. 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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