Abacus Group (ABG) H2 2024 earnings summary

Executive summary

• Completed demerger of Storage King, repositioning as a diversified commercial REIT with a focus on office, retail, and funds management, including a 19.8% stake in Storage King.

• Statutory net loss of $241 million, mainly due to fair value changes, while FFO from continuing operations rose 3% to $81.3 million.

• Portfolio rebalanced with $168.8 million in divestments and $82.5 million in acquisitions, focusing on eastern seaboard commercial assets.

• Increased ownership in Myer Centre Melbourne to 50%.

• ESG initiatives advanced, with a 36% reduction in GHG emission intensity since FY19 and two carbon neutral buildings certified.

Financial highlights

• FFO of $82.5 million (9.24 cps) and distribution of 8.50 cps, with a payout ratio of 92%.

• Operating earnings increased 24.4% year-over-year, with EBIT up 36% to $122.7 million.

• Like-for-like office income up 6.7% and retail income up 1.6% compared to the prior period.

• Net tangible assets at $1.76 per security.

• Investment property values decreased 12.7% overall, with office down 14.2%, greenfield sites 11.5%, and retail 8.2%.

Outlook and guidance

• FY25 FFO expected to be broadly in line with FY24, with distribution guidance of 8.5 cps and a payout ratio of 85%-95%.

• Guidance assumes no material deterioration in current business conditions.

• Plans to distribute $76 million of excess franking credits over the medium term.

• Continued focus on capital recycling, value-driven acquisitions, and leveraging platform capabilities in asset and funds management.