Goodman Group (GMG), which is on our Hitlist, entered a trading halt this morning after announcing a $4bn capital raise for data centre expansion. It’s issuing around 119,4mn shares at $33.50, over 6% of its market cap at a 6.9% discount from its last trade. This will likely be a short-term negative for NEXTDC (NXT), which is likely to be used as a funding vehicle, but it’s operating in a space where quality businesses see future growth.
At the same time this morning, GMG delivered a solid set of first-half results, but guidance was slightly below expectations.
- 1H25 revenue of $1.34bn, up 25% YoY – slight miss v $1.4bn expected
- Operating profit of $1.232bn, up 8.4% YoY – smack inline with expectations
They also affirmed their FY earnings target, with operating EPS to be up +9% (would have been 10% ex-cap raise). The market is looking for ~12%, so slightly underwhelming in our book. The raise is underwritten, so it’s getting done no matter what, however we suspect GMG will trade down near enough to the raise price ($33.50) when it comes back online.
MM is neutral GMG, but would get interested ~$32
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