Dexus Convenience Retail (DXC) H1 2026 earnings summary

Executive summary

• Delivered FFO of $14.5 million (10.5 cps) and distributions of 10.45 cps for HY26, reflecting 1.3% and 1.7% year-over-year growth, and on track for FY26 guidance of 20.9 cps.

• Net profit after tax surged 144% to $35.8 million, driven by $19.8 million in property valuation gains and cap rate compression.

• Like-for-like income grew 2.9%, with portfolio occupancy at 99.9% and a WALE of 7.6 years, underpinned by major tenants.

• Portfolio quality enhanced through $35 million in new fund-through acquisitions and ongoing development, notably the Glass House Mountains redevelopment.

• NTA per security increased 4.4% to $3.80, supported by rental growth and valuation uplift.

Financial highlights

• Net rental income decreased 7.6% year-over-year to $22.4 million due to divestments, partially offset by income growth.

• Gearing at 29.8%, at the lower end of the 25–40% target range, with $38.9 million in headroom and no debt expiries until FY28.

• Weighted average capitalisation rate of 6.23% across the $760 million portfolio.

• FFO payout ratio at 99.3%; distribution yield of 7.7% and trading at a 29% discount to NTA.

• Average cost of debt at 4.6%, with 71% of debt hedged and average debt maturity of 3.9 years.

Outlook and guidance

• FY26 guidance reaffirmed for FFO and distributions of 20.9 cps, representing 1.2% year-on-year growth and a 7.7% yield.

• Guidance supported by contracted rental increases, high occupancy, and current interest rate expectations.

• Focus on enhancing portfolio quality, balance sheet flexibility, and value-accretive development activities.

• Portfolio expected to be 90% metro and highway assets upon completion of development pipeline.

• Development pipeline and recent acquisitions expected to further enhance income resilience.