15 August 2018

2018 Annual results – Strong foundations, positive momentum

Dexus today announced that it had achieved distribution and AFFO per security growth of 5.1% for FY18.

Darren Steinberg, Dexus Chief Executive Officer said: “We performed well across all areas of the business, meeting or exceeding our financial and operational targets, while continuing to position the group for the future.

“A key driver of sustained growth is investment performance at the asset level, and our office portfolio continued to outperform the IPD office benchmark over one, three and five-year periods. In addition, our focus on maximising cash flow has seen us deliver distribution per security growth of 6.9% per annum over the past six years and for FY19 we are expecting this momentum to continue, with growth of circa 5%.

“We continue to focus on our strategic objectives as we build out our pipeline of developments across Australia’s key cities. In our funds management business, we are also broadening our relationships to invest alongside us through the cycle.

“Our highly engaged workforce underpins our ability to deliver these results and we are excited about the year ahead.”

FINANCIAL HIGHLIGHTS

  • Net profit after tax of $1.73 billion, up 36.8% on FY17
  • Funds from Operations1 (FFO) of $653.3 million, up 5.8% on FY17
  • Distribution per security of 47.8 cents and AFFO per security of 47.7 cents, both up 5.1% on FY17
  • Return on Contributed Equity2 of 7.6% and Return on Equity3 of 19.8%
  • Gearing (look-through)4 of 24.1%

OPERATIONAL HIGHLIGHTS

Property portfolio

  • Achieved high office portfolio occupancy5 of 96.0%
  • Delivered 4.5% like-for-like income growth and a one-year total return of 16.9% in the office portfolio
  • Leasing increased industrial portfolio occupancy5 to 98.3%
  • Progressed the group’s $4.2 billion development pipeline, and post 30 June 2018 replenished the pipeline by entering into agreements to acquire three industrial development sites (one jointly with Dexus Wholesale Property Fund (DWPF)) with a combined end value of circa $700 million

Funds Management

  • Strong performance across all funds with top quartile performance for DWPF
  • Completed the first equity raise for the Healthcare Wholesale Property Fund
  • Planning underway that will see the launch of new funds or partnerships over the next 12 to 18 months

Trading

  • Delivered $36.6 million of trading profits net of tax in FY18, with FY19 trading profits de-risked
  • Progressed development proposals and added 201 Elizabeth Street, Sydney to the future trading pipeline