Region Group (RGN) H1 2025 earnings summary

Executive summary

• Statutory net profit after tax was AUD 81.8 million for the half year, reversing a prior period loss, driven by positive property revaluations.

• FFO per security was AUD 0.076 (7.6 cps) and AFFO per security was AUD 0.067 (6.7 cps), both stable year-over-year, with a 100% payout ratio on distributions.

• Portfolio occupancy remained high at 98%–98.1%, with strong tenant retention and a focus on non-discretionary retail.

• Strategic capital recycling and reinvestment into higher-yielding assets, including centre repositioning projects and key acquisitions.

• The Group's principal activity is investment in and management of convenience-based retail properties in Australia.

Financial highlights

• Assets under management increased 8% to AUD 5.2 billion, with property income up 2.6% to AUD 196.4 million.

• Like-for-like property valuations rose by AUD 40 million, with cap rates stable at 6.08%.

• Gearing at 32.8%, at the lower end of the 30%-40% target range.

• Weighted average cost of debt stable at 4.3%, with 100% of debt hedged.

• Distributions paid and payable were AUD 77.9 million, or 6.70 cents per security.

Outlook and guidance

• FY25 guidance maintained: FFO of AUD 0.155 (15.5 cps) per security and AFFO of AUD 0.137 (13.7 cps) per security.

• Targeting medium to long-term FFO and AFFO growth of at least 3%-4% per annum.

• No debt expiries expected in FY25 and FY26, with $267.5 million in cash and undrawn debt available.

• Limited interest rate headwinds expected due to high levels of debt hedging through FY28.

• Directors are not aware of any other matters that may significantly affect future operations or financial position.