Hotel Property Investments (HPI) H1 2025 earnings summary

Executive summary

• Portfolio value at $1.26b with 58 properties and net assets of $784.2m as of Dec 2024, reflecting a stable asset base despite minor asset sales.

• Statutory profit for H1 FY25 was $16.7m, up from $9.5m in H1 FY24.

• Distribution per security increased 3.2% year-over-year to 9.8c, with full-year guidance upgraded to 19.7c, a 3.7% increase.

• Charter Hall and Hostplus acquired 76.75% of stapled securities, prompting board and management changes and establishment of an Independent Board Committee.

• Portfolio remains 100% occupied, with a WALE of 9.2 years.

Financial highlights

• Rental income grew to $37.1m, with like-for-like growth of 3.5%, partially offset by asset sales.

• AFFO reached $19.7m, up 6.5% year-over-year; distributions paid totaled $19.3m, up 4.3%.

• Net profit before tax increased 76% to $16.7m, driven by a $7.8m fair value gain on investment property and lower finance expenses.

• Net asset value per security at $3.99, with gearing at 36.1%, down from 37.0% in June 2024.

• Fair value gain on investment properties of $7.8m; takeover defence costs of $8.5m.

Outlook and guidance

• Distribution guidance reaffirmed at 19.7c per security for FY25, reflecting 3.7% growth.

• Full year distribution expected to be 100% of AFFO.

• Ongoing portfolio review to enhance distributions through asset recycling, development, or acquisitions.

• Strategy focuses on portfolio optimisation, growth levers, and capital management.