The first half result was mixed, Morgans observes, and overshadowed by the announcement of a proposed $60m off-market buyback. No FY20 guidance was provided but the broker expects a second half earnings skew, given the timing of settlements.
Development margins overall were 40%, boosted by the Ingleside land sale. No interim dividend was announced, given the buyback proposal.
The company believes a buyback is the appropriate way to achieve a balance between managing surplus funds and delivering sustainable returns.
Hold rating maintained. Target is raised to $1.75 from $1.62.
Sector: Real Estate.
Target price is $1.75.Current Price is $1.70. Difference: $0.05 – (brackets indicate current price is over target). If SDG meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
