Vicinity Centres (ASX:VCX) Releases FY25 Interim Results
Financial Performance
Vicinity Centres reported a statutory net profit after tax of $492.6 million for the first half of FY25, up from $223.5 million in the previous year. Funds from operations increased to $457 million, and the distribution per security rose to 5.95 cents, a 26.4% increase from 5.85 cents in 1H FY24.
Portfolio Performance
The company maintained a high portfolio occupancy rate of 99.4% as of June 2024. Comparable net property income grew by 4.2%, driven by strong performance in premium assets. Vicinity Centres successfully divested three non-strategic assets at premiums, enhancing portfolio quality and supporting sustainable rent growth. The valuation of assets increased by $174 million, or 1.2%, reflecting robust income growth across all asset categories.
Development Update
Major developments progressed smoothly, with Chadstone’s Market Pavilion scheduled to open on 27 March 2025. Chatswood Chase underwent significant retail upgrades, and the Bankstown Rezoning Proposal was approved, supporting residential development plans. The company also secured approvals for mixed-use developments in multiple locations, reinforcing its commitment to creating compelling retail-led destinations.
Capital Management
Vicinity Centres issued a $500 million 7-year Amended Medium Term Note (AMTN) and secured $600 million in new or extended bank debt facilities. The introduction of a Distribution Reinvestment Plan (DRP) provides an alternative funding source for FY25 interim distribution. The company maintains a proforma gearing of 27.2%, ensuring a strong balance sheet and capital flexibility.
Outlook
The company expects continued operational and strategic execution momentum into the second half of FY25 and beyond. Retail sales growth is anticipated to benefit from potential interest rate reductions in CY25, with further development completions at Chadstone projected to boost retail sales in FY26 and future periods. Long-term fundamentals in the retail property sector remain favourable, supported by population growth and limited new retail supply.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
This article was generated using GPT-4o mini, a Large Language Model (LLM), to generate summaries of investing news. While AI is generating the content, we know better than to blindly trust our future robot overlords, and every article is edited and fact-checked by an editor holding the appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content of everything published by The Capital Club.