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Image – Wikimedia Commons.
  • VCX: FFO $558.8M; Statutory net loss after tax $258M
  • AVN: FFO $110M; Net profit $410M
  • SCG: FFO $463.4M; Statutory profit $400.4M (six months to 30 June 2021)

‘Resilience’ is the word of the financial year, despite mixed results in the retail sector. The continuing issues of restrictions and lockdowns have further highlighted the contrast between retail subsectors.

Despite those difficulties, occupancies seem to remain reasonably high; across the three players, occupancies were above 98%.

Vicinity Centres (ASX: VCX)

VCX said it maintained a strong balance sheet, the gearing is at 23.8% and Vicinity has liquidity of $2.4 billion.

While Vicinity continues to be impacted by the COVID-19 pandemic, FFO was 7.4% higher than FY20, largely reflecting stronger property income growth, up 8.7% to $743.4 million.

Occupancy for 2H FY21 was reported at 98.2%.

FY21 FY20
FFO $558.8M $520.3M
12.28 cps 13.66 cps
Distribution 10 cps 7.7 cps
Statutory net Profit (-Loss) after tax -$258M -$1.8B

“Since the onset of the pandemic in March 2020, Vicinity has allocated more than $230 million in the form of financial support to retail tenants, around 90% of which, was via outright rental forgiveness. This is in addition to the significant investment made to implement a wide range of COVID Safe measures across our centres nationwide,” said Vicinity CEO and MD Grant Kelley.

“We concluded FY21 with gearing of 23.8% and maintained our investment-grade credit ratings of A/stable (S&P) and A2/stable (Moody’s),” Mr Kelley continued, adding that the company enters FY22 “with the capacity to withstand further COVID-related disruptions and the flexibility to pursue value accretive opportunities.”

Scentre Group (ASX: SCG)

Back in April this year, unhappy SCG investors inflicted the first strike on the company in an announcement on 8 April, with 51.03% voting against the remuneration report.

Profits are up on the previous corresponding period, the company’s half-year report showed.

Six months to 30 June 2021 Six months to 30 June 2020 Growth
Operating profit $460.1M $360.8M 28%
Statutory profit $400.4M
FFO $463.4 million $361.9M 28.40%
Gross cash inflow $1,383.9 million
Net operating cash surplus after interest overheads and tax $487.7 million $228.7M 113.20%

“Today’s results are pleasing and demonstrate the resilience of our platform and ability to generate cashflow with Operating Profit up 28%,” said Scentre Group CEO Peter Allen.

“We collected $1.2 billion of gross rent during the first half of 2021, representing an increase of 37% or $325 million compared to the first half of 2020.”

Not only is a positive outlook for the company, Mr Allen also noted that “… in those locations impacted less by lockdowns, we have seen trading conditions better than those experienced in the first half of 2019.”

Occupancy remains strong with the portfolio 98.5% leased at 30 June 2021.

Aventus Group (ASX: AVN)

One of the leaders in large format retail (LFR), Aventus, has posted a total shareholder return that outperformed the S&P ASX200 A-REIT accumulation index return by 20.2%.

Occupancies for the group’s portfolio were high at 98.8%, up 0.8% since 30 June 2020, and 3.9% above the national average.

FY21 Change Direction
FFO $110M 9.60%
19.4 cps 7.10%
Net valuation gain $297M 15.40%
Portfolio value $2.3 billion
Gearing 30.30% 5.70%
NTA $2.69 25.70%
Net profit +$410M +$57M in FY20

Rent collection is also strong, 98% across FY21, there were also strong fixed reviews of 3.8% per annum for 77% of the portfolio.

Centre traffic grew 6%, totalling 44 million visitors to Aventus centres. The portfolio capitalisation rate was also reported as 6.01%, a compression of 72 basis points since the last financial year.

“Our portfolio has large store sizes that allow social distancing and Click & Collect facilities across 100% of centres. Currently, 80% of the portfolio remains trading of which 32% are providing Click and Collect. In addition, our retailers have proved resilient and have been the beneficiaries of resurgent demand following the easing of previous restrictions, redirection of travel expenditure and Australians cocooning at home,” said Darren Holland, Aventus Group CEO.

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