Propertylink distribution exceeds guidance and forecasts
Published 14-AUG-2018 12:45 P.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Name: Propertylink Group (ASX:PLG)
Market Capitalisation: $620 million
Opening Share Price: $1.04
Propertylink Group (ASX:PLG) today announced strong financial and operational results for FY18, delivering distributable earnings of 9.25 cents per security, exceeding consensus forecasts and the group’s prior guidance of 9.0 cents per security.
The group has positioned its industrial portfolio to urban east-coast infill locations to benefit from the emerging themes of e-commerce and urbanisation, a move that is delivering strong tangible value.
In 2018, the group’s net tangible assets increased by 19% to $1.04 per security, broadly in line with its recent trading range.
However, if the company was priced in accordance with its yield (circa 9%), it could arguably justify a higher share price.
Distributable earnings were up 23% to $55.7 million.
Propertylink took advantage of strong market trends during the year, with the divestment of a number of external fund assets delivering average returns of 25% to investors and $22.3 million in performance fees to Propertylink.
Outstanding occupancy rates
Management said the company was expected to continue to benefit from solid performance fees and co-investment returns across its portfolio.
The group also has the balance sheet flexibility to take advantage of acquisition opportunities with gearing of 29.6% below the target range of between 30% and 40%.
Looking to fiscal 2019, occupancy rates stand at 99.2% and there is a low fiscal 2019 lease expiry profile of 11.2%.
The weighted average lease expiry (WALE) period is 3.8 years.
With fixed rental review arrangements in place, there is scope to achieve income growth from the existing portfolio.
Note that any decision with regards to adding this stock to your portfolio should be taken with caution and professional financial advice sought.
Investment management
The group also generates income from investment management of industrial and office assets across five external funds on behalf of global institutional investors.
Strong results continued to be achieved across the investment management platform, delivering an average total return of 25% to investors since the establishment of the external funds and 28% on assets divested.
Management said that it is receiving ‘extraordinary levels of interest’ from wholesale capital seeking real estate investments in Australia.
This could be attributed to the group’s continued ability to deliver strong returns and its willingness to take advantage of opportunities to realise value for investors where appropriate.
Management noted that this was an indication of its ability to source capital to drive growth across the investment management platform, potentially providing financing opportunities for portfolio expansion.
General Information Only
This material has been prepared by Jason Price. Jason Price is an authorised representative (AR 000296877) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C), and a Director of S3 Consortium Pty Ltd (trading as StocksDigital).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Jason Price, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, Jason Price, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.