HomeCo Daily Needs (HDN) H2 2024 earnings summary

Executive summary

• Maintained resilient performance and growth, focusing on essential, convenience-based assets in high-growth metropolitan areas, with active capital recycling and strategic rebalancing through $420m in asset disposals and $293m in acquisitions.

• FY24 FFO per unit was 8.6 cents ($178.1m), DPU was 8.3 cents, both in line with guidance, and portfolio value stands at $4.8bn with >99% occupancy and >83% of income from national retailers.

• Portfolio reweighted toward higher-yielding, metropolitan daily needs centers, supporting long-term growth and resilience.

• Sustainability initiatives advanced, achieving a 30% reduction in Scope 1 & 2 emissions, 30% of feasible sites with solar installed, and ESG awards.

Financial highlights

• Property net income grew 4% to $272.9m in FY24, driven by strong leasing spreads and high occupancy, offsetting the impact of being a net seller.

• FFO for FY24 was $178.1m (8.6 cents per unit), and DPU was 8.3 cents, both matching guidance.

• Net tangible assets per unit at June 2024 was $1.44, a 3% decrease year-over-year due to cap rate softening and derivative valuation reductions.

• Gearing at 35.1%, within the 30–40% target range, with total available liquidity of $173m.

• Interest coverage ratio at 3.4x, with 87% of debt hedged and weighted average debt cost at 4.4%.

Outlook and guidance

• FY25 FFO per unit guidance of 8.8 cents and DPU guidance of 8.5 cents, representing 2.3% and 2.4% growth, respectively.

• Guidance underpinned by forecast comparable NOI growth of 4% and strong revenue from defensive cash flows.

• Expect to commence $100–120m of development projects in FY25, targeting ~7% ROIC, with continued capital recycling to fund growth.

• Portfolio expected to maintain robust rental growth, high occupancy, and sector-leading leasing metrics.