The Goodman Group (ASX: GMG) share price is down 0.9% at $19.56 in early trade Thursday morning after reporting its annual financials before market open.
The property stock had closed Wednesday at $19.75.
What did the company report?
- Operating profit up 17% to $1.78 billion
- Statutory profit down 54% to $1.56 billion
- Revenue down 5.9% to $1.97 billion
- Operating earnings per share up 16% to 94.3 cents
- Portfolio occupancy at 99%
What else happened in FY23?
Real estate assets have suffered from 12 interest rate rises in 14 months, but Goodman Group appears to have withstood the volatility reasonably well. This could be attributed to its industrial asset focus and a stunning 99% occupancy rate.
The company continues to benefit from the rise in electronic commerce as well as the demand for data centre space for cloud computing and artificial intelligence.
What did Goodman's management say?
Goodman Group chief executive Greg Goodman said on Thursday:
Goodman Group has continued to perform strongly in FY23 with the quality and location of our sites underpinning rental growth, property values and development activity. Despite the macro uncertainty, structural drivers remain sound, driven by the digital economy, the need for more efficient and sustainable assets, and limited supply in our markets.
Significant growth in data storage and AI in particular, is driving data centre demand which is now approximately 30% of our $13 billion development workbook.
The group's gearing remains low at 8.3% while having $3.1 billion of available liquidity, which provides financial flexibility.
What's next for Goodman?
Goodman Group predicted that the 2024 financial year operating earnings per share would be 9% up year-on-year.
According to Greg Goodman, competition for land is constraining supply for the company, but it is seeking to diversify its clientele to counter this.
"These opportunities include intensification to create multi-level industrial, data centre developments where we have secured or identified greater than 3GW of potential power within our existing portfolio, and the next phase of the urban renewal cycle where we potentially have significant opportunities to realise value within our Australian portfolio," he said.
"With our significant development workbook underway, underlying structural demand from customers and robust capital position across the group and partnerships, we believe Goodman can continue to deliver growth despite the risks associated with current market volatility."
Goodman share price snapshot
Before market open on Thursday, the Goodman share price had dived 6.2% over the past 12 months.
So far this calendar year, the stock has risen 13.9%. This compares favourably to S&P/ASX 200 Index (ASX: XJO), which is up 3.58% year to date.
