'Worst is behind us': GPT (ASX:GPT) share price climbs despite COVID-19 disruptions

What did GPT report in its 2021 results today?

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Key points

  • The GPT share price is up 1.4% today 
  • Despite some COVID-19 impact, the REIT reported improved net profit after tax 
  • The group's investment properties also gained value in 2021

The GPT Group (ASX: GPT) share price is in the green today on the back of the company's FY 2021 financial results.

The real estate investment trust's (REIT) shares are currently swapping hands at $5.07 apiece, a 1.4% gain.

Let's take a look at what GPT reported today?

GPT share price rises amid full year results

Highlights of the financial results for the 2021 year include:

  • Net profit after tax (NPAT) of $1,422.8 million after a net loss after tax of $213.2 million in 2020
  • Investment property valuations gained $924.3 million in 2021
  • Net tangible assets (NTA) per security of $6.09, up 9.3% from $5.57 in 2020
  • Funds from operations (FFO) of $554.5 million, down 0.03% from $554.7 million in 2020
  • FFO per security of 28.82 cents, up 1.2% from 28.48 cents in 2020
  • Full year distribution of 23.2 cents per security, up 3% from 22.5 cents in 2020.

What else happened in the half?

GPT's office portfolio achieved a 5.8% net valuation increase in 2021. In December, GPT started its development of 51 Flinders Lane in Melbourne. This project is expected to be completed in early 2025. During the half, GPT also built on its development opportunity in George Street, Parramatta with the acquisition of adjacent properties.

GPT's Logistics portfolio improved by $1.4 billion to $4.4 billion during the year. This portfolio also saw its valuation increase by 14.4% in 2021. The company reported strong tenant demand for logistics space.

The GPT retail portfolio improved in the first half of 2021, however, COVID-19 lockdowns impacted trading conditions in July.

Despite this, GPT reported retail sales recovered compared to the previous year. Total centre sales climbed 3.7%, while total specialty sales improved 6.2% on the previous year.

Melbourne Central is still experiencing strong demand from retailers although the development is reliant on foot traffic from workers, students, and tourists in the city.

Management comment

In an announcement from the GPT Board, it was noted:

GPT commenced 2021 with solid momentum however this was disrupted by the Delta outbreak of COVID-19 in the second half of the year.

Severe lockdown measures restricted trading activity and impacted the performance of our Retail portfolio, particularly during the third quarter. Despite these impacts the group's diversified portfolio generated a total return of 14.1% for the year.

While Omicron has been another recent setback to the recovery, we are optimistic that the worst is behind us with case numbers trending in the right direction, high vaccination rates and the need for restrictive measures diminishing.

What's next for GPT

GPT is expecting to deliver an FFO of 31.7 to 32.4 cents per security in the 2022 financial year. The company is also optimistic it can achieve a distribution of 25 cents per security in 2022. This guidance is assuming operating conditions get back to normal by the end of the first quarter, including no further lockdowns.

More activity in the Melbourne and Sydney central business districts, including workers returning to the office, is important to GDP's outlook for 2022.

GPT share price recap

The GPT share price has surged 23% in the past year but is down more than 6% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned roughly 6% over the past year.

At its current share price, the REIT has a market capitalisation of $9.7 billion.

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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