Vicinity Centres (VCX) Q1 2025 earnings summary

Executive summary

• Advanced strategic pillars through acquisitions, divestments, and development approvals, including integrating Lakeside Joondalup and securing Kmart HQ at One Middle Road.

• FY24 marked by strong operational and financial performance, with net profit after tax of $547 million and FFO at $665 million, up 3.2% on an adjusted basis.

• Major investments included acquisitions of premium assets and divestment of non-strategic properties, enhancing portfolio quality.

• Enhanced organisational purpose, vision, and values, with employee engagement improved to 70% and new sustainability initiatives reducing emissions by 38% since 2016.

Financial highlights

• Acquired 49% of Chatswood Chase and 50% of Lakeside Joondalup; divested seven assets, delivering a 9% premium to book value.

• Lakeside Joondalup acquisition price $420m, investment yield 6.9%, and centre occupancy at 97.5%.

• Net profit after tax: $547 million for FY24; FFO: $665 million, up 3.2% adjusted for one-offs and lost rent from developments.

• FFO per security: 14.6 cents, above guidance; full year distribution: 11.75 cents per security, 95.2% of Adjusted FFO.

• Portfolio occupancy at 99.2% in 1Q FY25 and 99.3% at year-end; total shareholder return of 34% year-over-year.

Outlook and guidance

• FY25 FFO and AFFO per security expected within 14.5–14.8 cents and 12.3–12.6 cents, respectively.

• FY25 distribution payout to be within 95–100% of AFFO.

• Asset divestment target of $250m in FY25; continued focus on premium asset acquisitions.

• Retail sector outlook positive, with anticipated easing of interest rates in early 2025 and resilient employment supporting consumer spending.