Rural Funds Group FY26 earnings: Asset sales boost profit

The Rural Funds Group (ASX: RFF) share price is in focus today after the company reported full-year earnings of $124.1 million, a rise of $103.8 million mostly thanks to asset sales above book value and interest rate swap gains. Distributions per unit were steady at 11.73 cents, in line with forecasts.

What did Rural Funds Group report?

• Statutory earnings of $124.1 million, up $103.8 million year on year
• Net property income of $100.5 million, a 5.7% increase
• Adjusted funds from operations (AFFO) of 11.7 cents per unit, meeting forecasts
• Distributions per unit of 11.73 cents, unchanged and in line with guidance
• Adjusted net asset value (NAV) of $3.22 per unit, up 4.5% on the prior year
• FY27 forecast: AFFO and distributions both expected to remain steady at 11.7–11.73 cents

What else do investors need to know?

RFF sold $314.9 million in assets during the year, including six properties and water entitlements, at an average 18% premium to book value. These sales strengthened the balance sheet, reducing pro forma gearing to 31.8%, which sits comfortably within the target range.

The Group continues to focus on capital recycling and development, with FY27 forecast capital expenditure of $46.7 million. This investment is fully supported by available bank debt headroom of over $300 million and is aimed at expanding the productivity of its macadamia orchards and irrigated cropping properties.

What’s next for Rural Funds Group?

Looking ahead, the company expects AFFO and quarterly distributions to remain unchanged in FY27. There are also staged developments underway on two properties, aiming to drive future earnings. Management highlighted continued focus on defensive, inflation-hedged agricultural assets and enhancing portfolio value through selective development and leasing activity.

RFF’s long WALE of 14.8 years and quality tenant base, with nearly 90% of forecast income from corporate or institutional lessees, provide a steady foundation as the company seeks fresh growth opportunities.

Rural Funds Group share price snapshot

Over the past 12 months, Rural Funds Group shares have risen 11%, outperforming the All Ordinaries Index (ASX: XAO), which is flat over the same period.

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The post Rural Funds Group FY26 earnings: Asset sales boost profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.