60%-plus profit rise lifts Centuria Capital by around 3%

Centuria Capital (ASX: CNI) was up around 3% in afternoon trade after the large-cap real estate funds manager posted a 63% jump in its operating profit in FY22 to $114.5m.

Centuria’s seven real estate verticals all contributed to a record period of growth during FY22.

However, management attributes reported operating earnings per share of 14.5 cents and a 10% increase in distributions from FY21 to 11 cents per share to a strong year for growth fuelled by a series of acquisitions.

What does Centuria Capital do?

To the uninitiated, the group has two key areas of focus:

• Centuria Property Funds which specialises in listed property funds (A-REITs) and unlisted property funds - including the Centuria Diversified Property Fund and Centuria Healthcare Property Fund.

• Centuria LifeGoals Investment Bonds which deliver innovative solutions to help clients meet their investment goals.

Acquisitions and new revenue streams

Joint CEOs John McBain and Jason Huljich told investors that acquisitions – which allowed the group to diversify - occurred despite the backdrop of rising inflation, covid lockdowns and geopolitical events, and provided new revenues streams in alternative asset classes such as healthcare and agriculture.

“The Group continued to scale throughout FY22 with a record number of transactions, totalling $3.1 billion,” the CEOs said.

While $2,175m of acquisitions were exchanged and settled in FY22, another $403m of acquisitions exchanged in FY22 are yet to be settled in addition to $516m of real estate finance transactions.

Highlights within today’s result include:

• FY22 management fee revenue grew 77% to $146.8m over FY21

• Transaction fee revenue increased 162% to $39.3m

• AUM growth to $20.6bn, up 18% above FY21

• $2.1bn of development pipeline opportunity

• Property FUM grew to $79.4m, from $44.8m in FY21

• Real estate funds management platform grew 20% to $19.8bn

• Performance fees rose to $33m, from $17.9m the previous year

• Centuria’s healthcare platform expanded to $1.7bn of AUM, up 55% from FY21

Outlook

Commenting on today’s result, Centuria notes plans to grow its platform strongly in the alternative healthcare, agriculture and non-bank lending sectors - which are receiving strong investor demand – while remaining firmly focussed on the Australasian real estate sector.

Management also guided to operating earnings of 14.5 cents per share in FY23 and to an increased distribution of 11.6 cents per share.

“Centuria remains firmly focussed on the Australasian real estate sector,” the joint CEOs noted.

"The Group intends to grow its platform strongly in the alternative healthcare, agriculture and non-bank lending sectors which are receiving strong investor demand."

Centuria Capital share price over 12 months.