Mirvac (ASX:MGR) share price higher after overcoming Omicron to deliver solid earnings growth

Here's how Mirvac performed during the first half…

| More on:
Two businessmen look out at the city from the top of a tall building.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Mirvac had a successful half despite facing a number of challenges relating to COVID
  • The property company delivered earnings and distribution growth during the six months
  • Management has reiterated its guidance for FY 2022

The Mirvac Group (ASX: MGR) share price is on the move on Thursday morning following the release of its half year results.

At the time of writing, the property company's shares are up 1% to $2.64.

Mirvac share price rises following solid first half growth

  • Statutory profit up 44% to $565 million
  • Earnings before interest and tax (EBIT) up 8% to $391 million
  • Operating profit after tax up 9% over the prior corresponding period to $297 million
  • Earnings per share up 9% to 7.5 cents
  • Operating cash flow down 6.8% to $413 million
  • Half year distribution up 6% to 5.1 cents per share
  • Full year guidance reaffirmed

What happened during the first half?

For the six months ended 31 December, Mirvac delivered a 44% increase in statutory profit to $565 million and an 8% lift in EBIT to $391 million.

The latter was driven by a 248% increase in Commercial & Mixed Use Development EBIT to $73 million and a 17% lift in Residential EBIT to $89 million, which was partially offset by weakness in the key Integrated Investment Portfolio (IIP) business. Due largely to the impact of lockdowns, IIP posted a 5% decline in EBIT to $270 million.

This ultimately led to an operating profit after tax of $297 million, which was up 9% over the prior corresponding period. This compares favourably to the market consensus estimate of $250 million.

Management commentary

Mirvac's CEO & Managing Director, Susan Lloyd-Hurwitz, was pleased with the company's performance given the difficult operating environment.

She said: "Today's result reflects our continued focus on carefully navigating the ongoing disruption caused by the global pandemic, while highlighting the strength of our diversified and integrated business model."

"As we expected, the extended lockdowns in the first half of the financial year impacted the performance of our Integrated Investment Portfolio, concentrated in Retail. However, this was offset by a strong performance in our development businesses."

"In Residential, for example, we continued to see strong sales momentum despite the roll-off of government stimulus, with 95 per cent of forecast EBIT for FY22 already secured. Successful pre-leasing and execution in Commercial & Mixed Use also supported earnings and asset revaluations, as we continue to focus on creating and curating high-quality assets that will deliver future income to the Group," Lloyd-Hurwitz concluded.

Outlook

Management acknowledges that the Omicron variant is presenting a number of challenges, such as supply chain constraints and labour shortages. It also notes that the extension of the Commercial Code of Conduct for retail tenants is likely to put pressure on cash collection rates in the short term.

However, management remains positive on the company's prospects and has reaffirmed its guidance for FY 2022.

Susan Lloyd-Hurwitz commented: "Our strong balance sheet, the secure income stream from our high-quality Investment portfolio, our robust commercial development pipeline, and a high level of residential pre-sales ensures our business remains resilient. As a result, we have retained guidance of at least 15.0 cents per stapled security in FY22, noting that we will continue to closely monitor our operating environment."

Motley Fool contributor James Mickleboro 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.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »