Waypoint (WPR) H1 2024 earnings summary

Executive summary

• Distributable EPS for 1H24 was 8.28c, unchanged from 1H23, as rental growth and lower operating costs offset higher net interest expense.

• Statutory net profit rose to $93.3 million, up over 220% year-over-year, driven by a $35.7 million net gain in property valuations.

• NTA per security increased 2.1% to $2.79, supported by portfolio revaluations.

• Gearing was 32.6%, at the lower end of the 30-40% target range, with strong liquidity and hedging positions.

• Portfolio occupancy was 99.9% with a 7.6-year WALE, and 90%+ of leases are NNN or with top-tier tenants.

Financial highlights

• Like-for-like rental growth was 3.1%, with total rental income at $80.3 million and operating expenses down 8% to $4.6 million.

• Distributable earnings for 1H24 were $55.6 million.

• Distribution per security was 8.24c for 1H24, with a payout ratio just under 100%.

• Weighted average cost of debt increased to 4.3%.

• Portfolio value rose 1.4% to $2.81 billion, with a 6bp WACR expansion to 5.74%.

Outlook and guidance

• FY24 distributable EPS guidance is 16.48c, at the upper end of the original range; 2H24 results expected to be lower due to higher interest expense.

• Cost of debt for FY24 guided at approximately 4.5%.

• Guidance assumes no buybacks, acquisitions, or redevelopment expenditure, and stable market conditions.

• Asset sales of non-core properties (~$85 million book value) are being explored, with no material impact on FY24 earnings expected.

• Large-scale redevelopment and funding discussions with major tenant delayed to next year.