The year to December 2021 was a case of marking time for property giant GPT with no real growth in revenue, earnings or distribution, but management has its fingers crossed about the prospects for better times in 2022.
While 2021 saw net profit after tax of $1.423 billion jump from 2020’s net loss after tax of $213.2 million), the big rise was due to favourable investment property valuation increases of $924.3 million.
More accurate measures of performance for property trusts are funds from operations (FFO) and distributions for each security. On these GPT reported little growth in 2021.
Funds from operations were 28.82 cents for each security – just up from 2020’s 28.48 cents while distributions for each security edged up to 23.2 cents for the full year (2020: 22.5 cents), including a distribution of 9.9 cents for the six months to December 31, 2021.
Looking out to the rest of 2022, management said it was looking for stronger growth in FFo and distribution
“While uncertainty remains, GPT currently expects to deliver 2022 FFO in the range of 31.7 to 32.4 cents per security and a distribution of 25.0 cents per security,” the company forecast,” the company said in Monday’s statement.
“GPT’s guidance assumes operating conditions normalise before the end of the first quarter of 2022, including a return of workers to CBD workplaces and a recovery of retail sales and foot traffic at its shopping centres.
“GPT is also assuming that lockdowns will not be re-introduced,” the company said.
GPT CEO, Bob Johnston said in Monday’s statement: “GPT commenced 2021 with solid momentum however this was disrupted by the Delta outbreak of COVID-19 in the second half of the year. Severe lockdown measures restricted trading activity and impacted the performance of our Retail portfolio, particularly during the third quarter. Despite these impacts the Group’s diversified portfolio generated a total return of 14.1% for the year.
“When restrictions eased during the fourth quarter, most of our Retail assets benefitted from a rebound in customer visitation and sales. Melbourne Central experienced a lift in weekend foot traffic and sales but remains reliant on the reactivation of the Melbourne CBD and the return of office workers, students and tourism.
“Our Office and Logistics assets delivered strong results and good progress was made on implementing our strategy to increase our weighting to the Logistics sector. Logistics now represents approximately 27% of the Group’s property portfolio after several acquisitions and completion of developments in the period.
“We also advanced the logistics partnership established with QuadReal Property Group, with GPT and QuadReal recently agreeing to increase the capital commitment to $2 billion.
“Importantly, throughout the year we maintained our focus on ESG and delivering on our target to have all our managed assets independently certified as operating carbon neutral by the end of 2024.
“While Omicron has been another recent setback to the recovery, we are optimistic that the worst is behind us with case numbers trending in the right direction, high vaccination rates and the need for restrictive measures diminishing,” he added.
The securities rose 1.2% to $5.06.
