Property developer and shopping mall owner, Stockland was another well-known company to downgrade distribution (or dividend) and earnings for the year to June on Monday.
That’s due to weak house sales and a sharp cut in real estate valuations in its shopping malls (like Vicinity Centres and GPT have already revealed) – all thanks to the coronavirus and lockdowns.
At the same time the company will also see CEO, Mark Steinert retire after seven and half years in his role.
“A flexible period of transition has been agreed with Mark to provide for a smooth handover and to ensure that there is a strong focus on leading the organisation through the COVID19 recovery period,” Stockland’s chairman Tom Pocket said in a statement to the ASX on Monday.
The property manager said it will slash its estimated final distribution for the six months to June, by more than 24% to a provisional 10.6 cents security from its previous estimate of 14.1 per security.
“The reduction in the estimated second half 2020 distribution .. is reflective of the impact of COVID-19 on our business during the last quarter of the financial year and the timing of the expected recovery of operational cash flow,” Stockland told the ASX on Monday.
Stockland has already paid an interim distribution of 13.5 cents so the reduced final will make a total for the year of 24.1 cents a security, down from 27.6 cents in 2018-19.
However, Stockland cautioned that the final distribution “will be confirmed in August 2020 once our results for the 12 months to 30 June 2020 are finalised and we have reviewed the latest COVID-19 impact on our business including an assessment of relevant economic and operational issues.”
Stockland says it will announce its 2019-20 results and the firm and final distribution figure on August 25. Its 2019-20 guidance remains suspended (it was dropped in late March).
An independent preliminary draft valuation of the group’s commercial property portfolio saw book values cut by 6% in line with other large ASX-listed property managers.
Valuations fell the most for the group’s malls by around 10%, although 95% of tenants by rental income in the retail town centres have reopened and are trading.
“Due to the level of volatility created by COVID-19 these draft valuation outcomes may change prior to finalisation,” Stockland said.
Stockland securities fell 2.7% to $3.52 yesterday.
