Next Investors logo grey

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

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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.