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Commercial landlord Shopping Centres Australasia Property Group ('SCA', ASX: SCP) has notched a 17.5 per cent year-on-year rise in funds from operations (FFO) in the first half, while like-for-like sales performance remained steady.
Statutory net profit after tax (NPAT) was down 43.5 per cent at $39.9 million, but this was mainly due to the transaction costs associated with a significant acquisition of 12 convenience-based centres in October.
These purchases coupled with development upgrades on other sites boosted SCA's property valuations by 28.5 per cent to $3.15 billion.
"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," says chief executive Anthony Mellowes.
"During the period we acquired twelve convenience based centres for $677.9 million, completed two developments, and launched our third retail fund."
He says the acquired centres are performing in line with our expectations at the time of the acquisition.
"We have an opportunity to improve performance and create value by applying our expertise in convenience-based shopping centres to improve tenancy mix, set sustainable rents and achieve cost efficiencies," says Mellowes.
"We have a track record of successfully executing on these strategies and, over time we expect the performance of the acquired centres to align with our existing centres."
The group had an FFO of $65.9 million for the period, while guidance for the metric in FY19 is at 16.20 cents per unit (compared to 8.10 cents per unit in H1, up 7.7 per cent on the same corresponding period last year).
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