Dexus Convenience Retail (DXC) H1 2025 earnings summary

Executive summary

• Delivered resilient HY25 results with FFO of $14.3m (10.4 cps), distributions of 10.3 cps, and net profit after tax of $14.7m, reversing a prior loss, on track for FY25 guidance.

• Portfolio quality improved with 99.4% occupancy, 8.2-year WALE, and NTA per security up 0.3% to $3.57, supported by a $3.2m property valuation uplift.

• Active portfolio management included $38.8m of divestments and commencement of the $24m Glass House Mountains redevelopment, fully pre-leased with an 18-year WALE.

• Portfolio weighted towards metro and highway locations, with 86% of value in these assets and 95% of income from major tenants.

• Like-for-like net operating income grew 2.8% year-over-year, supported by fixed and CPI-linked rental escalators.

Financial highlights

• HY25 FFO of $14.3m, down 1.0% year-over-year, with FFO per security at 10.4 cps and distributions at 10.3 cps.

• Net profit after tax was $14.7m, a turnaround from a $1.7m loss in HY24, driven by $3.2m property valuation uplift.

• Gearing reduced to 28.7% (from 32.9%), at the lower end of the 25–40% target range.

• Portfolio value at $709m across 91 assets, with an average cap rate of 6.41%.

• FFO payout ratio at 98.9%.

Outlook and guidance

• FY25 FFO and distributions guidance reiterated at 20.6 cps, implying a 7.3% distribution yield, supported by contracted rental increases and current interest rate expectations.

• Management remains confident in delivering guidance, with some marginal upside from improved floating rates and full benefit from debt facility cancellations expected in FY2026.

• Focus remains on enhancing portfolio income certainty, balance sheet flexibility, and value-adding developments.