Property business Cromwell Group (ASX: CMW) has reported its result to December 2018.
Cromwell Group is a diversified real estate investor and manager with operations on three continents and a global investor base. At the end of December 2018 it had a direct property investment portfolio in Australia valued at $2.5 billion and total assets under management of $11.5 billion across Australia, New Zealand and Europe.
Here’s What Cromwell Reported
Operating profit grew by 7.6% to $82.6 million and statutory profit increased by 37.5% to $111.1 million.
Net tangible assets (NTA) per unit, being the underlying value of the assets per share, increased by 6.45% to 99 cents.
At the end of December 2018, Cromwell managed more than 3,700 tenant customers in 15 countries, leasing over 3.8 million square metres of space. Total assets under management (AUM) stood at $11.5 billion.
In recent times Cromwell has lodged an application for development approval for Victoria Avenue, Chatswood and it’s examining options for its assets in Melbourne, Canberra and Adelaide.
Cromwell said that the existing conversion of Tuggeranong Office Park to a 390-apartment, 500-resident Seniors Living village, through its Seniors Living Joint Venture, LDK Healthcare, is also progressing well. Cromwell and LDK also announced the $60 million acquisition of a Seniors Living village on the Upper North Shore in Sydney.
Cromwell also said that its weighted average lease expiry (WALE) was 7.2 years, which is quite a long time for REITs.
Cromwell Distribution and Balance Sheet
So far Cromwell has paid 3.624 cents of distributions for FY19, which is a reduction of 13.1% compared to last year.
Cromwell has provided distribution guidance of no less than 7.25 cents for FY19.
Group gearing was 33.7%, below the bottom of Cromwell’s target range.
Cromwell Management Comments
Cromwell CEO Paul Weightman said: “The Group has a clear strategy, a strong value-add pipeline of domestic opportunities, a successful and growing business in Singapore, the largest wealth management centre in Asia and an established platform in Europe.”
Is Cromwell a buy?
Cromwell has guided 8 cents per unit of operating profit and a distribution of 7.25 cents per unit, meaning it has operating profit per unit and distribution per unit yields of 7.31% and 6.62% based on yesterday’s closing price.
Cromwell could be one of the better property investment ideas on the ASX with its global investment strategy and high yield, although it’s better to buy shares at a discount to the underlying value, rather than a premium.
If you want income it could be a better idea to invest in one of the proven shares in the free report below.
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