Reporting Season

Goodman shares rally on earnings beat, reaps in $1.5bn in property revaluations

Thu 17 Feb 22, 12:29pm (AEST)
Industrial Office Real Estate REIT

Key Points

  • Goodman tops Ord Minnett's initial assessment of its half-year earnings
  • One-off profits almost double thanks to $1.5bn of property revaluation gains
  • Goodman revised its FY22 guidance to 20% EPS growth

A focus on prime industrial real estate has propelled Goodman (ASX: GMG) first-half earnings well-ahead of analyst expectations. The company’s stock is up 4% at noon.

Financials at a glance: 

  • Operating profit of $786.2m, up 28% 

  • Assets under management of $68.2bn, up 32% 

  • Portfolio occupancy of 98.4% 

  • Like-for-like net property income growth of 3.4% 

  • Development work in progress of $12.7bn, up 51% 

“The Group’s long-term focus on infill locations is underpinning our strong performance, and driving the volume and scale of the $12.7 billion workbook. It’s also increasing the value of our projects,” CEO Greg Goodman said. 

Goodman’s property portfolio reaped in $1.5bn of revaluation gains, boosting statutory (one-off) profits to $2bn - a 92% increase compared to last year.

The cherry on top of the cake was Goodman’s upgraded earnings guidance, projecting earnings-per-share growth of 20% for FY22. 

Commenting on the outlook, Greg Goodman said: “Our strategy to provide essential infrastructure for the digital economy is delivering. The business is performing strongly across all segments, including our development projects, leasing success, rental growth, significant valuation uplift and the strong performance of our Partnerships."

Goodman expects to deliver 30 cents in dividends by year-end, citing an “attractive opportunity to deploy retained earnings.”

Initial broker thoughts

Ord Minnett said the interim result has beaten its expectations.

The broker advises that its share price forecasts will need to be updated.

As it stands, the stock has an Accumulate (buy equivalent) rating with a $25.00 price target (1% upside).

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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