The Charter Hall Group (ASX: CHC) share price finished the day trading 6.67% higher following the release of the group’s FY20 results.
FY20 results
Financial highlights from Charter Hall’s FY20 results included operating earnings of $322.8 million up 46.3% on the prior corresponding period (pcp). Statutory profit after tax attributable to stapled security holders was up 47% on the pcp. Additionally, the group reported distributions of 35.7 cents per share, up 6% on the pcp.
Funds under management grew 33% to $40.5 billion at year end and $41.8 billion after the year end, representing growth of $1.3 billion.
During the period, Charter Hall was able to successfully launch new partnerships with investors and new tenant partnership funds with Telstra, BP Australia and Ampol.
Over the last 10 years, its pre-tax operating earnings per security had a compound annual growth rate (CAGR) of 18.6% and 15.6% after tax. However, post-tax and excluding the performance fee, Charter Hall’s CAGR comes in at 13.1% over 10 years.
Charter Hall also reported it has seen growth in its property investment portfolio, property funds management, development activity and pipeline and has maintained a strong balance sheet.
COVID-19 impact
Charter Hall’s strategy to focus on long weighted average lease expiry (WALE) assets to defensive tenants has helped limit the impact of the coronavirus pandemic.
In fact, it has seen accelerating demand for access to industrial and logistics assets which it has actively pivoted towards. Furthermore, the group is well positioned to take advantage of the opportunity to secure strategically aligned assets and portfolios.
Outlook
Charter Hall has advised if there is no change in current market conditions, funds under management growth has already been achieved in FY21.
Assuming the COVID-19 operating environment doesn’t deteriorate, FY21 guidance is for after-tax operating earnings per security of 51 cents.
Furthermore, Charter Hall’s FY21 distribution per security guidance is for 6% growth over FY20.
The group reports momentum in sale and leaseback transactions continued to grow across corporate Australia and the group is well positioned to take advantage of this opportunity to secure strategically aligned assets and portfolios.
About the Charter Hall share price
Charter Hall has 30 years’ experience in property investment and funds management. It has a diversified property portfolio in sectors including office, retail, industrial and logistics and social infrastructure.
The Charter Hall share price is currently trading at $12, down 3% on this time last year.
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Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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