Abacus Property Group’s diversification strategy has delivered a $285.1 million annual profit, up 53% from $185.9 million in FY16.
Underlying profit grew 51% to $186.8 million up from $124.0 million in FY16.
Abacus Managing Director, Dr Frank Wolf commented, “The business has delivered record profits in FY17 with results from all parts of the business.
"The results validate our 'diversified core plus strategy' that we have rigorously stuck to and championed over the years. The strategy provided resilience to earnings and has seen us grow recurring earnings whilst delivering strong profits from transactional activities to boost overall underlying profits”.
The Abacus balance sheet has seen a further strengthening in its capital position at balance date with gearing reduced to 20.5%.
Realisations across the property investment and development businesses have increased the group’s available liquidity to $295 million, allowing for capital management initiatives to be considered if appropriate.
Rob Baulderstone, Abacus Chief Financial Officer noted, “Our balance sheet continues to maintain good levels of liquidity and gearing, with capacity to add to our commercial and self-storage portfolios in line with our stated strategy for growing our recurring earnings base to fund distribution growth to our security holders.”
The commercial portfolio achieved strong returns by growing assets and revenue during the period. The commercial portfolio delivered a 2.0 times increase in underlying EBITDA in FY17 driven by increased rental income from existing and new assets and $50 million of profits from asset sales.
Seven assets valued at over $200 million were also added to the commercial portfolio while also achieving revaluation gains of $74.8 million across the portfolios. Project realisations and the receipts of interest payments during the period delivered over $170 million of cash to the business.
Abacus’ third party capital joint ventures are an integral investment platform for the company. Abacus expanded the platform further during the reporting period with a number of new joint ventures with new investors and partners. Abacus currently has third party partnerships that have invested in over $1.3 billion of properties.
The business outlook remains positive with expected growth in the recurring earning base, which provides scope to deliver 2-3% growth of distributions per security.
Abacus is targeting a distribution of 18.0 cps for FY18, a 3% increase on FY17 distributions per security.
“The results speak for themselves. We are comfortable with our expectations to grow recurring earnings during the year from acquisition and organic opportunities within our portfolios. We have had a strong year for profits from transactional activity but the balance sheet and pipeline for transactions remains robust for FY18. We are excited to see what we can achieve this year," Dr Woolf said.
