Shopping Centres Australasia Property Group (ASX: SCP) reported FY19 results this morning and did not meet stock analyst estimates. Here’s what you need to know.

About SCA Property Group

SCA Property Group is a real estate investment trust (REIT) that owns a portfolio of sub-regional and neighbourhood shopping centres and freestanding retail assets focussed on convenience retailing.

The current portfolio includes 96 assets based throughout Australia.

The 5 Key Points

  1. Net operating income increased 24% to $185.8 million
  2. Earnings before interest and tax (EBIT) fell 18.1% to $168.7 million
  3. Net profit after tax (NPAT) fell 37.4% to $109.6 million
  4. Net tangible assets (NTA) fell 1.3% to $2.27 per share
  5. Final distribution of 7.45 cents per unit to be paid in August 2019

The video below explains EBIT and EBITDA.

Analyst Estimates

Bloomberg estimates for SCA Property Group were a net profit of $136.2 million and dividends per share (DPS) of 7.65 cents.

The actual dividend fell just short at 7.45 cents per share, but the profit figure came in nearly 20% below estimates.

Looking at the profit and loss statement, it seems the reason was a 279% increase in unrealised foreign exchange losses and a 91.8% increase in the net interest expense.

SCA says it was a result of the expensing of acquisition transaction costs that reduced the fair value of investment properties.

Management Commentary

SCA Property Group CEO Anthony Mellowes was pleased with the result and said the existing assets are performing well.

“We are pleased to report another solid result for the year to 30th June 2019,” he said.

“Our existing centres continue to perform well, delivering continued sales growth and a comparable net operating income increase of 2.5% due to positive rent renewal uplifts and expense control.”

CFO Mark Fleming commented on the cost of debt, saying: “We are pleased to have reduced our weighted average cost of debt to 3.6% with 70% of our drawn debt being fixed or hedged”.

“As at 30th June 2019 our gearing I 32.8% which is within our target gearing range of 30% to 40%.”

Are SCA Property Shares A Buy?

While the decline in net profit may have been a result of acquisitions, I’m not sure how the share price will fare after missing analyst estimates. For now, I’d rather invest in one of the companies mentioned in the free report below.


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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.