CLW -3.17%: A solid result from CLW with operating EPS and distributions modestly ahead of expectations, while FY27 guidance also came in slightly above consensus. The key attraction remains the predictability of CLW’s income, underpinned by high occupancy, a 9.2-year WALE and high-quality tenants.
Key results:
- Operating earnings A$181.9m, +1.8%, below A$195.7m expected.
- Operating EPS 25.5c, up from 25.0c and ~2% ahead of 25.0c consensus.
- Distribution 5cps, up 2% and broadly in line with expectations.
- FY27 operating EPS guidance 25.5c, ~2% ahead of 25.0c consensus.
- FY27 distribution guidance 25cps, implying a yield of around 7% at current prices.
Portfolio fundamentals remain very strong, with 99.9% occupancy, a 9.2-year weighted average lease expiry and 99% of income derived from government, ASX-listed, multinational and national tenants. This provides high visibility over rental income, supported by contracted annual rent increases. Consensus currently expects earnings to soften beyond FY27, with EPS forecast around 24.5c in FY28, making portfolio management and capital allocation increasingly important.
MM’s view: A solid result from CLW, with the most important metrics heading in the right direction and FY27 guidance slightly ahead of expectations. A ~7% distribution yield backed by long leases and blue-chip tenants remains attractive and while the lack of meaningful earnings growth is the obvious limitation, for investors seeking predictable income rather than rapid growth, CLW continues to stack up well.
MM remains long and bullish CLW
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