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.

• Portfolio value at $4.8bn, diversified by subsector, tenant, and geography, with over 99% occupancy and more than 83% of income from national retailers.

• Disposed of $420m in traditional assets and acquired $293m in high-quality daily needs assets in high-growth metro areas.

• Sustainability initiatives advanced, achieving a 30% reduction in Scope 1 & 2 emissions and ESG awards.

Financial highlights

• Property net income grew 4% to AUD 273 million in FY 2024, with FFO at AUD 178.1 million (8.6 cents per unit) and DPU at 8.3 cents, both matching guidance.

• NTA per unit at $1.44, a 3% decrease from June 2023, mainly due to cap rate softening and derivative valuation reductions.

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

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

• Maintained occupancy and cash collections above 99% for the fourth consecutive year.

Outlook and guidance

• FY 2025 FFO per unit guidance of AUD 0.088 (8.8 cents) and distribution guidance of AUD 0.085 (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 AUD 100–120 million of development projects in FY 2025, targeting around 7% ROIC.

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