Goodman achieves strong performance for FY17 with operating profit of $776.0 million up 8.6% on FY16 - Seite 2

Key financial and operational highlights for the period are:

Financial highlights

• Operating profit of $776.0 million[1], up 8.6% on FY16
• Operating earnings per security (EPS)[2] of 43.1 cents[2], up 7.5% on FY16
• Total distribution of 25.9 cents per stapled security, up 8% on FY16
• Net tangible assets per security up 3% to $4.21
• Statutory profit of $778.1 million[2] 
• Improvement of balance sheet with gearing reduced to 5.9% (look through gearing at 18.0%), interest coverage ratio of 9.5 times and $3.2 billion of liquidity
• Forecast FY18 operating earnings of $828 million, or EPS of 45.7 cents (up 6% on FY17)
• Forecast FY18 distribution of 27.5 cents per security (up 6% on FY17) with payout ratio unchanged

Operational highlights

• Total assets under management (AUM) of $34.6 billion with external AUM of
  $30.5 billion, up 4% on FY16 despite asset sales
• Valuation uplift of $1.6 billion across the Group and Partnerships
• Strong property fundamentals across the core investment portfolio, with occupancy increased to 97%, retention rate steady at 81% and weighted average lease expiry of
  4.7 years
• Development work in progress of $3.5 billion across 77 projects in 12 countries with a forecast yield on cost of 7.8%
• Continued focus on asset rotation to fund developments and improve the quality of the portfolio with $3.5 billion of asset sales
• $1.2 billion of urban renewal sales settled during the year ahead of expectations, with $2.1 billion sales completed under the program

Operations -- operating profit growth whilst reducing gearing

Goodman's integrated business model balances income, risk and capital requirements across the platform to deliver strong consistent returns for the long term. The FY17 results delivered a strong operating performance across the three divisions, generating EPS growth of 7.5% while also deleveraging to gearing of 5.9%. 

The Group generated a statutory accounting profit of $778.1 million for the full year. This consists mainly of the following:

• $776 million of operating profit;
• $398 million of valuation gains representing the Group's share of the $1.6 billion of valuation gains across the entire platform;
• Other usual non-cash adjustments for items such as unrealised derivative mark to market and unrealised foreign exchange gains and non-cash remuneration under the Group's long term incentive program (LTIP), which collectively amounted to a loss of $190 million this year; and
• $205 million of unrealised valuation loss and costs on our US Bonds associated with the modifications made to their covenants in June 2017. This loss is recognised in accordance with accounting requirements and is due to the reduction in interest rates and the improved strength of Goodman's Credit Rating since the Bonds were originally issued.

The US144A offer was one of several capital management initiatives Goodman undertook in the financial year. Collectively these intitatives lowered leverage and boosted liquidity to $3.2 billion at year end. Goodman's capital management strategy provides flexibility and allows the Group to take advantage of long term growth opportunities as they arise.