Charter Hall Group (ASX: CHC) held its Annual General Meeting and released a guidance update today.
The company said the economic and property fundamentals will remain positive and it will grow its funds under management via selective acquisition. It will keep its focus on investing in assets with strong tenant covenants and lease durations to deliver sustainable income and capital growth.
The Group provided an operating earnings per share growth outlook of 7-9% for FY16. The dividend distribution payout is expected be between 85% and 95% of operating earnings per security.
The company wrapped up its FY15 performance in the AGM. Operating earnings were 21.7% higher than pcp. The property investment sector was the main contributor to the company’s earnings. The company also diversified its portfolio further by adding hospitality to its existing industrial, office and retail sectors. The company’s investment funds grew in its industrial, retail and hospitality sectors. During FY 15, the company acquired 89 properties for $1.9 billion and sold 19 properties for $0.7 billion.
The company saw an increase in tenant demands for its office markets. The company sees a demand for long term trade from food-anchored centres. The hardware and garden retailing grew 9%. The company also reported it has seen improvement in discretionary sectors of retail trade due to improved employment growth and the lower Australian dollar.
Charter Hall’s industrial market was one of the top performing sectors in FY15 as it provided an attractive risk-adjusted returns fuelling investor appetite for the sector.
Wise-Owl recommended Charter Hall for its active investor’s portfolio. We like the company’s strategy to fund identified equity investments which provides capacity for future co-investments as growth opportunities. The stock is travelling in a long term uptrend and is trading at $4.43 as of 3:20 PM. It is down 3% for the year which is approximately in line with the overall market performance.
Author: Matthew Dibb
Nov 11, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.