Goodman, a leading warehousing and industrial property company, has announced its optimism for continued growth in operating earnings in fiscal 2024. Despite recession risks in some markets, including the U.S., warehouses and industrial properties have consistently outperformed other property assets.
According to the company's latest announcement, Goodman projects a 9% increase in operating earnings per security for the 12 months ending June 2024. Additionally, it plans to maintain a distribution of 30 Australian cents per security.
Goodman has gained a reputation for providing conservative earnings guidance that often exceeds expectations. Its fully-let properties have become increasingly attractive to investors, especially when compared to office and mall owners who have been significantly impacted by tenant behavior shifts caused by the pandemic and rising interest rates.
The company's near-zero vacancy rates create a sense of urgency among potential tenants, allowing Goodman to negotiate higher rental prices for its properties. Emphasizing its strategy of targeting gateway cities like Sydney, Hong Kong, and Los Angeles, the company takes advantage of their scarcity of land, proximity to affluent consumers, and modern infrastructure.
Greg Goodman, Chief Executive of Goodman, commented on the decision to maintain a flat dividend. He explained that this reflects the company's current activity levels and its commitment to staying within the lower range of its financial risk management policy for gearing.
Goodman's Outlook: Growth, Stability, and Resilience
Goodman, a leading property investment firm, has recently reported a 54% decrease in net profit to A$1.56 billion for the 12 months ending in June. Despite this decline, the company remains optimistic about its future prospects.
Strong Performance and Exceeding Expectations
In the face of challenges, Goodman has managed to achieve an operating earnings per security of 94.3 cents, surpassing its guidance of 15% growth in May. This impressive figure is even more significant considering that the initial projection at the beginning of the fiscal year was only 11% growth.
Occupancy Rate and Income Growth
At the end of June, Goodman boasted an outstanding occupancy rate of 99%. Additionally, the company experienced a noteworthy like-for-like net property income growth of 4.7% over the past year. These figures highlight the stability and profitability of Goodman's property portfolio.
Sound Financial Position
Goodman's gearing, a measure of debt relative to equity, stood at 8.3% at the end of June, demonstrating a slight decrease from the previous year's 8.5%. This low gearing positions the company favorably compared to other real-estate investment trusts when faced with rising interest rates.
Thriving Development Pipeline
The company is currently undertaking an extensive development program, with a total work in progress valuation of A$13.0 billion across 81 projects as of June. This robust pipeline underscores Goodman's commitment to future growth and its ability to meet the evolving demands of its customers.
Resilience in Volatile Markets
Despite the risks associated with current market volatility, Goodman remains confident in its ability to navigate these challenges successfully. The company believes that its significant development workbook, strong customer demand, and robust capital position will sustain growth going forward.
Goodman's outlook reflects a steadfast commitment to delivering growth, maintaining stability, and embracing opportunities in an ever-changing landscape.