Property revaluation bumps SCA REIT half-year profits, FY22 forecast surpass pre-covid

Shopping Centres Australasia Property Group (ASX: SCP) weathered last year’s lockdowns to deliver sales growth and resilient rent collections in the first-half of FY22. The REIT’s stock rallied 6.4% as the market opened. 

Financial highlights for the REIT include: 

• Net profit after tax of $432.4m, up 320.2% against the previous period (primarily due to increase in fair value of investment properties) 

• Adjusted FFO per share of 7.35 cents, up 26.7%

• Final dividend of 7.20 cents per share, up 26.3% 

• Value of investment properties of $4.43bn, up 10.7% compared to 30 June 2021

The dividend topped Bloomberg estimates of 7.0 cents per share.

“Over the last six months, our convenience-based centres have remained resilient. Specialty tenant sales grew, while supermarket sales were flat compared to the elevated levels in the prior year,” said CEO Anthony Mellowes. 

“Leasing spreads and cash collection rates were impacted by lockdowns in New South Wales and Victoria but improved toward the end of the half year period.”

Closing in on pre-covid 

Annual sales turnover growth for the REIT's tenants was negative for most of the half, impacted by the covid environment. 

Encouragingly, December sales ticked positive as lockdown restrictions began to lift in NSW and Victoria.

In terms of rent collections, the REIT said that collection rates, excluding NSW and Victoria, were 97% in the first quarter and 100% in the second quarter. 

Collection rates are expected to normalise by June 2022. 

Earnings guidance 

The REIT expects FY22 adjusted FFO to be at least 15.2 cents per share, 20.5% higher than FY21 figures. 

The guidance assumes no further major covid outbreaks and no significant new government restrictions.