GMG –1.51%: delivered a clean FY26 result broadly in line with expectations. We liked the result though the share price reaction implies the market might have been looking for a little bit more on the growth in FY27 above the 9% guided to by Goodman.
Key results:
- Operating profit of A$2.67bn, up 16% and broadly in line with A$2.66bn expected.
- Operating EPS of 129.9c, up 10% and in line with 130c expected.
- Statutory profit of A$2.78bn, up 67%.
- Development income of A$1.62bn, up 8.5%.
- Management income of A$687m, up 14%.
- Gross property income of A$252m, up 19%.
- Gearing remains very conservative at 6.5%.
- FY27 operating EPS growth guidance of 9%, with distributions maintained at 30cps.
The data centre opportunity remains central to the investment case. The majority of projects currently under construction are fully fitted facilities, with staged delivery between early 2027 and 2030, while Goodman is increasingly looking to retain and operate some facilities for customers. That should increase both the capital intensity and recurring earnings potential of the model over time.
MM’s view: It’s hard to fault Goodman’s execution, and its combination of land, power availability, development expertise and institutional capital makes it arguably the ASX’s highest-quality way to play the global data centre buildout. The issue has never really been the business; it’s the valuation investors are being asked to pay for it. A 9% EPS growth outlook is solid rather than spectacular, meaning GMG needs continued success converting its enormous data centre pipeline into earnings to justify its premium. Great company, good result, but expectations remain high.
MM remains long and bullish GMG
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