Stockland ASX Code: SGP Price: $4.31 12 Mth … · Residential: The division develops a range of...
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Business Summary Stockland Corporation Limited (SGP) is a diversified property group in Australia which develops, owns and manages retail centres, business parks, logistics centres, office buildings, residential communities and retirement living villages. Residential: The division develops a range of master planned and mixed use residential communities in growth areas and apartment developments. As at 30 June 2017, the residential portfolio includes 56 Residential Communities, 65 villages in Retirement Living. Retirement Living Communities: The division designs, develops and manages communities for retirees and also operates Aged Care facilities. As at 30 June 2017, there are 9,600 established units across five states and the ACT. The portfolio includes a short to medium term development pipeline of over 3,100 units. Commercial Property: The division invests in, develops and manages retail, office and industrial properties. As at 30 June 2017, the Commercial Property portfolio includes 8office building, 27 logistics and business parks and 41 retail centres. Latest Research In Stuckland FY19 guidance a touch ahead, but medium-term outlook lacks certainty — Maiden FY19 FFO guidance was set at 5% to 7% growth, implying 37.4cps to 38.1cps (v Cons 37.3cps). DPS was marginally below at 27.5cps v Cons 27.8cps. While guidance will lift FFO cons. ~1%, the outlook beyond FY19 remains uncertain in our view given (1) softening residential conditions are starting to flow through to net deposit momentum and (2) structural and cyclical pressures are negatively impacting the retail portfolio (12 assets had declining FFO in FY18). We upgrade FY19 FFO ps +1.1% and FY20 FFO ps +4.5% (see Figure 1). For more information see research 24 Aug 2018. GICS - Real Estate Stockland ASX Code: SGP Price: $4.18 12 Mth Target Price: $4.20 Rating: Neutral Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is general investment advice only and does not constitute advice to any person. Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended. Snapshot Date Market Cap. Shares on issue 12 Month High 12 Month Low 24 August 2018 $10,176m 2,434.5m $4.79 $3.90 Rating Rating 12 Mth Target Price Capital Gain Gross Yield Implied Total Return Neutral $4.20 -2.8% 6.5% 3.7% Investment Fundamentals FYE 30 Jun 2017A 2018F 2019F 2020F Profit $m 802.0 851.0 893.0 883.0 Profit (norm)* $m 802.0 851.0 893.0 883.0 EPS* ¢ 33.0 35.0 37.0 36.0 EPS Growth % 6.4 6.1 5.7 -2.7 P/E* x 13.1 12.3 11.7 12.0 P/E Relative % 0.0 0.0 0.0 0.0 DPS ¢ 26.0 27.0 28.0 29.0 Yield % 6.0 6.3 6.5 6.7 Franking % 0.0 0.0 0.0 0.0 * Adjusted for goodwill and unusual items Source: Based on Citi estimates Share Price Chart Total Return on $10,000 Investment
Transcript of Stockland ASX Code: SGP Price: $4.31 12 Mth … · Residential: The division develops a range of...
Business SummaryStockland Corporation Limited (SGP) is a diversified property group inAustralia which develops, owns and manages retail centres, business parks,logistics centres, office buildings, residential communities and retirementliving villages.
Residential: The division develops a range of master planned and mixed useresidential communities in growth areas and apartment developments. As at30 June 2017, the residential portfolio includes 56 Residential Communities,65 villages in Retirement Living.
Retirement Living Communities: The division designs, develops andmanages communities for retirees and also operates Aged Care facilities. Asat 30 June 2017, there are 9,600 established units across five states and theACT. The portfolio includes a short to medium term development pipeline ofover 3,100 units.
Commercial Property: The division invests in, develops and manages retail,office and industrial properties. As at 30 June 2017, the Commercial Propertyportfolio includes 8office building, 27 logistics and business parks and 41retail centres.
Latest ResearchIn Stuckland
FY19 guidance a touch ahead, but medium-term outlook lacks certainty —
Maiden FY19 FFO guidance was set at 5% to 7% growth, implying 37.4cpsto
38.1cps (v Cons 37.3cps). DPS was marginally below at 27.5cps v Cons27.8cps. While guidance will lift FFO cons. ~1%, the outlook beyond FY19remains uncertain in our view given (1) softening residential conditions arestarting to flow through to net deposit momentum and (2) structural andcyclical pressures are negatively
impacting the retail portfolio (12 assets had declining FFO in FY18). Weupgrade FY19 FFO ps +1.1% and FY20 FFO ps +4.5% (see Figure 1).
For more information see research 24 Aug 2018.
GICS - Real Estate
Stockland
ASX Code: SGP Price: $4.18 12 Mth Target Price: $4.20 Rating: Neutral
Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.
Snapshot
DateMarket Cap.Shares on issue12 Month High12 Month Low
24 August 2018$10,176m2,434.5m$4.79$3.90
RatingRating12 Mth Target Price
Capital GainGross Yield
Implied Total Return
Neutral$4.20-2.8%6.5%3.7%
Investment FundamentalsFYE 30 Jun 2017A 2018F 2019F 2020F
Profit $m 802.0 851.0 893.0 883.0Profit (norm)* $m 802.0 851.0 893.0 883.0
EPS* ¢ 33.0 35.0 37.0 36.0EPS Growth % 6.4 6.1 5.7 -2.7P/E* x 13.1 12.3 11.7 12.0P/E Relative % 0.0 0.0 0.0 0.0
DPS ¢ 26.0 27.0 28.0 29.0Yield % 6.0 6.3 6.5 6.7Franking % 0.0 0.0 0.0 0.0* Adjusted for goodwill and unusual itemsSource: Based on Citi estimates
Share Price Chart
Total Return on $10,000 Investment
Profit & Loss ($M)2014A 2015A 2016A 2017A 2018A
Rental Income 679 698 728 752 780Investment Income 24 86 12 75 3Other Income 1,241 1,412 1,600 2,043 2,042Profit Before Tax 528 604 681 857 884Income Tax 27 4 -21 -6 59Outside Equity Int. -- -- -- -- --Profit after Tax 555 608 660 851 943Significant Items after Tax -28 295 229 344 82Reported Profit after Tax 527 903 889 1,195 1,025Preferred Dividends -- -- -- -- --
Cash Flow ($M)2014A 2015A 2016A 2017A 2018A
Receipts from Customers 2,310 2,542 2,867 3,382 3,055Funds from Operations 3,707 4,531 4,792 5,677 5,336Net Operating Cashflow 752 401 787 921 728Capex -19 -15 -35 -38 -58Acquisitions & Investments -1,137 -648 -705 -508 -676Sale of Invest. & Subsid. 460 830 232 94 307Net Investing Cashflow -693 184 -508 -380 -426Proceeds from Issues -- -- -- -- --Dividends Paid -475 -419 -448 -476 -561Net Financing Cashflow -55 -646 -241 -511 -207Net Increase Cash 4 -61 38 30 95Cash at Beginning 227 231 170 208 238Exchange Rate Adjust. -- -- -- -- --Cash at End 231 170 208 238 333
Ratios and Substantial Shareholders2014A 2015A 2016A 2017A 2018A
Profitability RatiosNTA/share % 3.53 3.69 3.82 4.05 4.20Net Gearing % 19.73 19.79 21.20 18.81 18.69Net Interest Cover x 49.00 6.75 3.79 11.85 11.28
Top 5 Substantial ShareholdersVanguard Investments Australia Ltd 9.1%BlackRock Group 8.7%State Street Corporation and subsidiaries 5.7%
Balance Sheet ($M)2014A 2015A 2016A 2017A 2018A
Cash 231 170 208 238 333Receivables 119 103 134 139 98Investments 503 -- -- 23 --Other Current Assets 753 881 1,069 923 895Current Assets 1,606 1,154 1,411 1,323 1,326Investments 656 542 892 834 631Property 10,341 11,252 12,376 13,107 13,683Other 2,297 2,781 2,263 2,231 3,651Non-current Assets 13,294 14,575 15,531 16,172 17,965Total Assets 14,900 15,729 16,942 17,495 19,291Trade Creditors 554 595 643 585 810Provisions 257 300 284 319 567Other (inc Borrowings) 2,142 2,398 2,787 2,874 2,957Current Liabilities 2,953 3,293 3,714 3,778 4,334Borrowings 2,815 3,030 3,319 3,272 3,871Deferred Tax -- -- -- -- --Other 834 619 655 518 710Non-current Liabilities 3,649 3,649 3,974 3,790 4,581Total Liabilities 6,602 6,942 7,688 7,568 8,915NET ASSETS 8,298 8,787 9,254 9,927 10,376
Current Analyst Recommendations *
* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.
Principals & DirectorsPrincipals
Company Secretary Ms Katherine Grace
Directors
Ms Carolyn Judith Hewson(Non-Executive Director)Mr Stephen Eric Newton(Non-Executive Director)Ms Christine O'Reilly(Non-Executive Director)Mr Barry Hugh Roxborough Neil(Non-Executive Director)Mr Thomas (Tom) William Pockett(Non-ExecutiveDirector,Non-Executive Chairman)Ms Carol Judith Schwartz(Non-Executive Director)Ms Melinda Blanton Conrad(Non-Executive Director)Mr Mark Steinert(Chief Executive Officer,Managing Director)Mr Andrew Cameron Stevens(Non-Executive Director)
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Stockland
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