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At a time when many retail and commercial property owners are up against the wall, a logistics property portfolio leveraging convenience and e-commerce trends is paying off for founder-led Goodman Group (ASX: GMG).
With strategic assets overseas and an Australian portfolio linked to the likes of Amazon, Coles, Woolworths and Kogan to name a few, Goodman has today announced a 12.5 per cent lift in operating profit to $1.06 billion.
The Sydney-headquartered group initially provided an earnings per share (EPS) guidance of 9 per cent, but that has since risen by 11.4 per cent.
GMG CEO Greg Goodman (pictured) says the pandemic has had a profound impact on the world, resulting in global behavioural changes including an acceleration of e-commerce adoption, a shift to remote working and a significant increase in the demand for technology and big data.
"The location and quality of our properties means that Goodman is well positioned to leverage the opportunities that this new operating environment presents," he says.
"We saw development WIP (work in progress) increase by 59 per cent on last year to $6.5 billion and we expect it to exceed $7 billion in the first half of FY21.
"This development activity is flowing through to our AUM (assets under management) which increased 12 per cent to $51.6 billion in FY20, including $2.9 billion in revaluation gains."
However, statutory profit - including valuation gains, non-cash items and derivative and mark to market movements - was down 6.3 per cent at around $1.5 billion.
Goodman Group's WIP development pipeline covers 46 projects with a proposed yield on cost of 6.5 per cent, and the executive highlights a liquidity position of of $2.8 billion including $1.8 billion.
These prospects have given the board the confidence to forecast a 9.9 per cent rise in operating profit to $1.165 billion in FY21, and a 9 per cent jump in the EPS to 62.7 cents.
"Goodman has deliberately positioned its business over the past decade to maximise sustainability of earnings in varying market conditions. We expect COVID-19 to continue to significantly impact the way we live and work for the foreseeable future," says the CEO.
"We remain sympathetic to this, and continue to work closely with our customers who have been genuinely impacted, to provide them with the necessary support to manage through the pandemic and beyond.
"The pandemic has reinforced the consumers' need for convenience, and heightened use of technology which have accelerated the adoption of e-commerce and increased the need for data storage."
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