This ASX 200 stock just reported a 10% dividend boost plus another 'positive surprise'

Top broker Citi says Scentre Group beat market consensus expectations.

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ASX 200 stock Scentre Group (ASX: SCG) is rising 4.36% to $2.76 after the Westfield shopping centres owner reported its FY23 half-year results.

The ASX property share opened at $2.73 and reached an intraday high of $2.78 in earlier trading.

Let's look at the details of this ASX 200 stock's financial results.

ASX 200 property stock delivers 10% dividend boost

Here are the highlights for the six months to 30 June:

  • Net profit after tax (NPAT) of $163.9 million, down from $513.1 million in FY22
  • Funds from operations (FFO) $556.6 million, up 1.5%
  • Statutory profit of $149.4 million
  • Net operating income of $971.9 million, up 10% and the highest half-year result ever
  • Gross rent collections of $1,332 million, up $82 million on 1H FY22
  • The ASX 200 stock will pay total distributions of $427.7 million, up 10%
  • 8.25 cents per share will be paid on 31 August

Top broker Citi said Scentre Group's results beat market consensus expectations.

According to The Australian, Howard Penny said:

CPI plus 2 per cent lease structure is efficient and passing through inflationary pressures, and 2.6 per cent leasing spreads is a positive surprise.

Balancing this, investors do remain cautious on discretionary consumption in Australia which Scentre is exposed to as well as higher see-through gearing assuming subordinated notes as debt.

What else happened in 1H FY23?

Scentre Group reported 750,000 new sign-ups for its Westfield membership program compared to 1H FY22. The program now boasts more than 3.5 million members.

In June, the company opened stage two of Westfield Knox, with visitation in the first month 13% higher than in 2019. The remaining stages are due to open by the end of 2023.

Works continue on the development of 101 Castlereagh Street in Sydney's CBD.

What did management say?

Scentre Group CEO Elliott Rusanow said:

Our strategic focus on providing our customers with more reasons to visit our 42 Westfield destinations has delivered strong operating performance and continued growth in earnings and distributions for our securityholders.

So far this year, we have increased customer visitations to 314 million, 9.8% more than the
same period in 2022.

This has been driven by our unique customer activation program, including our partnerships with Disney and Netball Australia, to create extraordinary experiences for our customers at our Westfield destinations.

What's next?

CEO Elliott Rusanow said:

We will continue our focus on creating destinations where people want to spend their time, enabling more businesses and brands to connect with more customers.

The Group is well-positioned to continue to deliver long-term growth in both earnings and distributions.

Scentre Group reconfirmed FFO guidance of between 20.75 cps and 21.25 cps in FY23.

This would represent 3.4% to 5.9% growth for the year.

Full-year distributions are expected to be at least 16.5 cps in FY23, up 4.8% on FY22.

ASX 200 stock price snapshot

The Scentre share price is down 4% in the year to date.

The ASX 200 stock has dropped 0.7% over the past 12 months.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen 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 Scott Phillips.

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