Region Group (RGN) H1 2025 earnings summary

Executive summary

• Statutory net profit after tax reached $81.8 million for 1H FY25, reversing a prior year loss, driven by positive property revaluations.

• FFO for the half-year was 7.6 cents per security and AFFO was 6.7 cents per security, with a 100% payout ratio on distributions.

• Portfolio occupancy remained high at 98.1%, with 85% tenant retention and a focus on non-discretionary retail.

• Strategic capital recycling and reinvestment into higher-yielding assets, including centre repositioning projects and the launch of Metro Fund 2, expanding the funds management platform to over $680 million.

• Portfolio comprised 88 convenience-based retail properties valued at $4,319.7 million.

Financial highlights

• Assets under management increased 8% to $5.2 billion since June 2024, including new fund properties.

• Like-for-like property valuations rose by $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 or fixed.

• Distribution per security of 6.7 cents, representing 100% payout of AFFO.

Outlook and guidance

• FY25 guidance maintained: FFO of 15.5 cents per security and AFFO of 13.7 cents per security, with payout ratios of ~90% of FFO and 100% of AFFO.

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

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

• No debt expiries until FY27, with $267.5 million in cash and undrawn debt available.

• Focus remains on delivering resilient cashflows and disciplined capital management.