Image: Canva.
  • NPAT of $1,215 million
  • Occupancy 98.3%
  • Payout ratio 95.3% of AFFO

Vicinity Centres (ASX: VCX) has announced its full-year results, with the company delivering 7.1% FFO and 10.3% NTA growth.

VCX recorded $1,215 million in statutory net profit after tax, representing a $1,473 million increase on FY21. The profit comprised $598 million of FFO and a non-cash net property valuation gain of $554 million.

The company said its 7.1% funds from operation growth was driven by an 8% uplift in net property income (NPI) to $803 million.

Statutory net profit after tax $1,215 million
Funds from operations $598 million or 13.1 cps
Adjusted FFO $496.8 million or 10.9 cps
Full-year distribution 10.4 cps
Gearing 25.1%
Weighted average maturity 4.8 years
Liquidity $1.4 billion
Net tangible assets $2.36
Occupancy 98.3%

“FY22 has been a positive year for Vicinity. Favourable retail trading conditions combined with strong operational execution and prudent financial stewardship, have underpinned an acceleration in our recovery as demonstrated by today’s results. After prolonged lockdowns in our two largest states of NSW and Victoria in 1H FY22, the retail sector has enjoyed a sustained rebound in retail sales and importantly, retailer confidence,” said Vicinity CEO and MD, Grant Kelley.

Vicinity completed 1,378 leasing deals in FY22, up 121 deals from the prior year.

Leasing spreads continued to show positive momentum, with the average leasing spread for FY22 at -4.8% relative to -6.4% in 1H FY22and -12.7% in FY21.

Of all new leasing deals agreed in FY22, 71% were negotiated with fixed annual increases of 5% and cumulatively, 94% of all new deals were negotiated with fixed annual increases of at least 4%. Importantly, the fixed annual increases support current and future NPI growth. Furthermore, the average lease tenure of new deals negotiated in FY22 extended to 5.1 years, from 4.3 years in FY21.

Vicinity leased 374 vacant stores in FY22, and occupancy was 98.3% at the end of June 2022, representing a slight increase versus the 98.2% reported at 30 June 2021.

On retail sales performance, Mr Kelley said, “The Australian retail sector has benefitted from elevated household savings and an extremely tight employment market. Consumers continued to show confidence and capacity to spend while maintaining a strong preference for physical store shopping.”

While visitation numbers were below 2019 levels, the average spend per visit was higher than 2019, at 1.3 time that recorded pre-pandemic.

Higher spend per visit, combined with the introduction of on-trend retailers, and the particular success of luxury retail in Vicinity’s centres, supported total portfolio retail sales growth of 15.5% in 2H FY22 relative to the same period in 2019. Excluding CBDs, sales were 16.9% higher.

The announcement was made on 17 August, with VCX opening trading at $2.04 and closing at $2.03 on the same day. At the time of writing Vicinity was trading at $1.96.

For full details, please see the company’s original ASX announcements and related documents.

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