Diversified Australian property company, Stockland released its results for the 12 months to 30 June 2020, with FFO down 8.0% to $825 million and a statutory loss of AU$14 million reflecting the impact of COVID-19.
Stockland’s Retail Town Centres business was worst affected, with its FFO down by 17% at AU$343 million. Independent valuers reduced the valuation of Stockland’s entire Commercial Property portfolio by $464 million, largely driven by the performance of the retail sector.
However, the company’s results were buoyed by growth in their Residential Communities business where FFO was up 2.5% at AU$372 million with an operating margin of 19.9%.
Commenting on the group’s overall results, Stockland’s outgoing Managing Director and CEO, Mark Steinert highlighted “the benefits of our diversified portfolio, particularly in light of the economic challenges presented by the Australian bushfires and the COVID-19 pandemic.”
Mr. Steinart said, “We proactively reduced costs, curtailed non-essential expenditure, boosted liquidity and improved gearing as a result of strong cash flow performance.”
Commenting on the stronger performance of the Residential Communities business, Group Executive and CEO Communities, Andrew Whitson, said: “We continue to be the market leader with 13% market share, more than three times that of our nearest competitor.”
In summary Mr Steinert said: “We remain focused on creating Australia’s most liveable and sustainable communities, accelerating our Logistics development pipeline and future proofing our Retail Town Centres.
We will continue to monitor the impacts of COVID-19 and the implications for our business, while remaining agile in our execution of strategic priorities.”
Due to ongoing uncertainty around the impacts of COVID-19 on business performance, Stockland decided not to provide FFO and distribution guidance for FY21.
Stockland shares were up by 5.5% in morning trading following the results announcement.