Shareholders were pumped. with the company closing trade higher for the day. Image: Canva.
  • DXC recorded a $40M profit, up 90% on last year
  • $21.1 million of property valuation gains
  • NTA was $3.83 per security

Dexus Convenience Retail REIT (ASX: DXC) released its half-yearly results, with the company’s highlights including a $40 million profit, $15.4 million FFO, and gearing at 32%.

31-Dec-21 31 June 2021
Gearing 32% 28.20%
Cost of debt 2.70% 3%
Weight average debt maturity 2.5 years 2.9 years
Hedged debt (incl. caps) 66% 55%
Headroom $66.5M $74.3M

Source: Dexus Convenience Retail REIT.

DXC opened this morning at $3.42, with trading up across the day, topping out at $3.49 in the afternoon, before closing up 1.46% at $3.47.

“We delivered a solid financial result for the six months, culminating in an upgrade to our FY22 guidance in December as a result of $73.7 million of acquisitions announced during the half,” said DXC fund manager, Chris Brockett.

“The portfolio’s concentration in quality non-discretionary retail assets underpinned like-for-like net operating income growth of 2.3%, in addition to valuation uplifts and NTA per security growth.”

The strong results comes almost a year after Dexus acquired APN Convenience Retail and APN Industria, since renamed Dexus Convenience Retail and Dexus Industria.

Among other highlights for the company, distributions were confirmed at 11.5 cents per security, up 4.6% on the previous corresponding period, and an increased NTA, now $3.83.

Profit was 90% up on the previous corresponding period, and FFO was 25.9% up.

Revenue from ordinary activities for the company was up 37.5% from the previous corresponding period, reported as $27.3 million.

“During the half, DXC announced six strategic acquisitions to strengthen the portfolio. The assets are modern, recently built convenience retail facilities with a strong focus on non-discretionary retail,” said Mr Brockett.

“The acquisitions are underpinned by a long weighted average lease expiry of 10.5 years with strong lease covenants and favourable annual rent review structures providing sustainable income growth for investors.”

The company also spoke about the resilience of its portfolio in the long term, noting industry trends included domestic electric vehicle adoption on the rise, increased government focus on climate change, among others.

DXC said the portfolio was well-positioned because it had long-dated leases, providing income certainty in the medium to long term; proactive tenant engagement to improve convenience retail offerings and install EV charging stations; an optimal portfolio mix, and a diversified tenancy mix.

DXC financial reporting for HY22, Appendix 4D

31 Dec 2021 31 Dec 2020 %
$000 $000 Change
Revenue from ordinary activities 27,267 19,827 37.5%
Net profit attributable to security holders after tax 39,979 21,044 90%
FFO per security 15,447 12,269 25.9%
Distribution to securityholders 15,933 12,858 23.9%
Cents Cents
FFO per security 11.52 10.81 6.6%
Distribution per security for the period 11.45 10.95 4.6%
Payout ratio (distribution per security as a % of FFO per security 99.4% 101.3% -2.0%
Basic earnings per security 29.82 18.53 60.9%
Diluted earnings per security 29.82 18.53 60.9%
Franked distribution amount per security
‘000 ‘000
Total assets 816,781 542,693 50.5%
Total borrowings 265,691 119,670 122.0%
Security holders equity 532,481 408,309 30.4%
Market capitalisation 499,541 431,024 15.9%
$ per security $ per security
Net tangible assets 3.83 3.35 14.3%
Securities price 3.59 3.54 1.4%

Source: Dexus Convenience Retail REIT.

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