Goodman profits double to $2b due to online boom

Rich Lister Greg Goodman told analysts that COVID-19 disruption had less of an impact on full-year production of new warehousing than originally assumed and “consequently we’re upgrading earnings growth”.

Over the half-year, operating profit rose 28 per cent to $786.2 million while operating earnings per share rose 27 per cent to 41.9 cents.

Despite this surge, Goodman retained its full-year distribution guidance of 30¢ unchanged for many years and one of the lowest payout ratios among real estate investment trusts.

Statutory profit surged to just over $2 billion as Goodman booked a $1.54 billion valuation gain across its share of investments (total valuation gains hit $6 billion).

Mr Goodman said its strategy focused on delivering “well-located” logistics facilities was delivering for its customers and investment partners.

Over the half year total assets under management rose 32 per cent to $68.2 billion, of which $64 billion are held in investment partnerships.

Goodman’s development pipeline – the engine room of its business – rose 51 per cent to $12.7 across 81 projects around the world as the group annual completion rate hit $7 billion.

Yields on development project costs remained high at 6.7 per cent compared with yields around 4 per cent or lower for prime asset sales.

Highlighting the demand for logistics space around, as ecommerce “heads for a quarter of all retail sales by 2026” portfolio occupancy remained high at 98.4 per cent and like-for-like net property income (NPI) growth rose to 3.4 per cent from 3.2 per cent.

Over 12 months to December Goodman leased 4.5 million sq m of warehouse space, equal to $619 million of annual rental property income across the group and partnerships.

While construction costs increased globally due to supply chain, labour and material shortages, Goodman remained strong margins due to “proactive management of procurement practices and contingencies for time and cost”.