Region Group (RGN) H1 2025 earnings summary

Executive summary

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

• FFO and AFFO per security were stable year-over-year, with AFFO at 6.7 cps and distributions matching AFFO at 100% payout.

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

• Strategic capital recycling completed, with $200 million of divestments reinvested into higher-yielding assets, centre repositioning, and funds management.

• Funds management platform expanded to over $680 million with the launch of Metro Fund 2.

Financial highlights

• FFO per security was 7.6 cps, AFFO per security 6.7 cps, and statutory profit $81.8 million for 1H FY25.

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

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

• Net tangible assets per security at $2.42; portfolio weighted average cap rate at 6.08%.

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

Outlook and guidance

• FY25 guidance maintained: FFO of 15.5 cps and AFFO of 13.7 cps 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 major debt expiries until FY27; $267.5 million in cash and undrawn debt available.

• Short-term earnings impact from centre repositioning and tenant administration, but no ongoing impact expected from FY26 onwards.