SGP –3.72%: Shares dropped as much as 8.8%, as the market reacted to a sharp earnings miss, before recovering slightly as they maintained full-year guidance. FY25 Funds from Operations (FFO) per share of 10.5c, missing consensus estimates of 11.3cps, primarily due to weaker residential margins.
- 1H25 Funds From Operations (FFO) of $251m (-5.6% yoy), implying 10.5c FFO per share, -7% below consensus of 11.3cps
- 1H25 residential settlements came in at 1,974, above consensus of 1,676
- Gearing of 27.9% up from 24.1% 2H24 but within target range of 20-30%
Full-year guidance for FFO of 33-34cps was maintained so we think while there is some short-term disappointment the business is on track in the medium term. At face-value, the full-year earnings guidance implies a second-half skew of ~70% which would be big from a historical context, though this primarily relates to timing of settlement of residential lots.
The company has 5,789 commercial and residential contracts on hand at ~15% higher pricing than 1H25, providing visibility into the 2H25 and FY26 pipeline and earnings. SGP is also ensuring it isn’t left behind the pack (i.e GMG) – expanding logistics and data center initiatives, securing zoning and development for its MPark Stage 2 100MW data-centre development in line with a sound, diversified long-term strategy.
MM remains bullish SGP
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