Cromwell Property Group (CMW) H2 2024 earnings summary

Executive summary

• Completed $1.6 billion in asset sales, including the European platform and Polish Retail Fund, advancing simplification and transition to a capital-light, Australian-focused funds manager.

• Statutory loss of $531.6 million for FY24, mainly due to asset revaluations and exit costs from major sales; underlying operating profit at $136.7 million, down 13.8% year-over-year.

• High occupancy and stable income in the Australian portfolio, with significant government tenancy underpinning income quality.

• Transitioning to an Australian capital-light fund manager model, with a focus on local growth and platform acquisitions.

Financial highlights

• Statutory loss: $531.6 million (20.3 cps), compared to $443.8 million loss in FY23, driven by asset revaluations and sales.

• Underlying operating profit: $136.7 million (5.22 cps), down from $158.6 million (6.06 cps) in FY23.

• AFFO: $98.7 million (3.77 cps); distributions: 3.08 cps (81.8% payout ratio).

• NTA per unit declined from $0.84 to $0.61 per security, mainly due to asset revaluations and impairments.

• Assets under management: $11 billion as of 30 June 2024.

Outlook and guidance

• Completion of European platform sale expected in Q1 FY25, with gearing to fall to 20%-28% and further business separation to follow.

• Distributions to continue quarterly, with 0.75 cps expected for September 2024 quarter; guidance will be assessed annually.

• Focus on leveraging a strengthened balance sheet for disciplined capital recycling and growth in core plus and value-add sectors in Australia and New Zealand.