S&P/ASX 200 Index (ASX: XJO) stock Mirvac Group (ASX: MGR) is having a day to forget.
Shares in the diversified property developer and investor closed yesterday at $2.11. In earlier trade on Thursday, the Mirvac share price collapsed to $1.84, putting the ASX 200 stock down 12.8%. After some likely bargain hunting, shares are trading for $1.91 apiece at the time of writing, down 9.3%.
For some context, the ASX 200 is down 0.6% at this same time.
This comes following the release of Mirvac's full-year FY 2024 results and earnings guidance for FY 2025.
Here are the highlights.
Mirvac share price falls on results
- Operating profit after tax of $552 million, down 5% from FY 2023
- Operating earnings before interest and tax (EBIT) of $860 million, up 12% year on year
- Operating earnings per share (EPS) of 14.0 cents per share, down 5%
- Statutory loss of $805 million, compared to a statutory loss of $165 million in FY 2023
- Net tangible assets down 11% year on year
- Full-year unfranked dividend payout of 5 cents per share, in line with last year
What else happened with the ASX 200 stock in FY 2024?
Among the highlights of the financial year just past, Mirvac achieved some $1 billion in non-core asset sales, which management said helped strengthen the ASX 200 stock's balance sheet and "improve financial headroom."
FY 2024 saw Mirvac secure Mitsui Fudosan as a long-term capital partner for a 67% interest in 55 Pitt Street in Sydney.
Mirvac also sold the Aspect North and South Industrial precincts into the Mirvac Industrial Venture with its existing capital partner, Australian Retirement Trust, acquiring a 49% interest.
On the residential front, the ASX 200 stock acquired a 47.5% interest in the $1 billion Serenitas platform, expanding its residential customer offering into the land lease communities' sector.
Mirvac also leased around 163,000 square metres of office, retail, and industrial space and settled 2,401 residential lots.
The full-year dividend payout of $414 million represents a payout ratio of 75%.
What did management say?
Commenting on the results that are pressuring the ASX 200 stock today, Mirvac CEO Campbell Hanan said, "A number of exceptional outcomes were achieved in a tough environment, and it is a credit to both our culture and the quality of our business and integrated model that we have been able to deliver on our strategic priorities."
Hanan added:
Earnings before interest and tax were up 12% on FY 2023, supported by a strong performance in Development and Funds and solid like-for-like growth in our Investment portfolio, while operating earnings were down 5% to 14.0 cents per stapled security, in line with guidance.
Our performance in FY 2024 reflects the execution of the strategy we outlined over a year ago, which focuses on improving the cash flow resilience of our Investment portfolio, maintaining balance sheet strength, growing our third-party capital relationships, and leveraging our development capability to deliver quality, modern assets to hold for the long term.
What's next for the ASX 200 stock?
Much of the selling pressure on the Mirvac share price today looks to be driven by weak earnings and dividend guidance for FY 2025.
Earnings and distributions are expected to go backwards for the ASX 200 stock in the financial year ahead amid higher interest costs and lower margins at its apartment projects.
Mirvac said it is targeting operating earnings in FY 2025 of between 12.0 cents per share to 12.3 cents per share, down from 14.0 cents per share in FY 2024. Dividends are forecast to come in at 9.0 cents per share in FY 2025, down from this year's 10.5 cents per share.
Looking ahead, Hanan said:
While market conditions are likely to remain challenging in FY 2025, we are setting ourselves up for recovery. We have operated through numerous property cycles over the past 52 years, and our success lies in our ability to navigate through the challenges and adapt to market conditions.
Mirvac share price snapshot
With today's big intraday losses factored in, the Mirvac share price has fallen into the red in 2024.
Year to date, shares in the ASX 200 stock are down 6.5%.
