Transcription of Finance News Network Interview with Charter Hall Group (ASX:CHC) Head of Investor Relations, Richard StackerCarolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from property funds manager Charter Hall Group
(ASX:CHC), is global head of investor relations, Richard Stacker. Richard welcome to FNN.
Richard Stacker: Thank you for having me.
Carolyn Herbert: The Group’s just released its full year results for FY16. What were the highlights?
Richard Stacker: We’ve had a fantastic year, funds under management have grown 29 per cent to $17.5 billion. The one-year return has been 25.5 per cent, being our benchmark, the ASX 200 property Accumulation index and the MSCI/IPD index. So great results there. In terms of our earnings, our earnings are up $224.7 million, up 26 per cent on the prior year. And on earnings per unit, up almost 11 per cent.
Carolyn Herbert: What was your distribution and how does this compare to the same time last year?
Richard Stacker: The distribution is 26.9 cents per unit, which is up 11.2 per cent on the previous year.
Carolyn Herbert: The Group generates earnings via two streams, being property investment and funds management. So how have they performed, starting with property investment?
Richard Stacker: We’ve increased our property investments over the past year by $56 million to $1.1 billion. And the underlying properties that we invest in, close to 99 per cent occupied with a weighted average lease expiry across that portfolio, of close to 8.8 years. The performance of that property investment, so we invest alongside our partners in the funds that they invest in, has been on average 16 per cent across those funds per annum. So very good result as well.
Carolyn Herbert: What about property funds management?
Richard Stacker: As mentioned earlier, the property funds management has increased almost 30 per cent from the last year, up $3.9 billion to $17.5 billion under management. In terms of the underlying funds, we’ve seen very good growth in office, industrial and our retail property. And we’ve seen that across our books. So we now manage or run almost 2,500 tenants, 296 properties and as I mentioned before, across a weighted average lease expiry of close to eight years. So very good performance there.
I think in terms of the acquisition side, being driven obviously by the equity that we’ve had inflow into those funds. So we’ve had almost $1.5 billion of gross equity flow into our various funds, which has allowed us to acquire almost $3 billion of property.
Carolyn Herbert: Being a fund manager, performance is obviously paramount. So how did your funds perform?
Richard Stacker: Our underlying funds have performed very well. In our retail funds for mums and dads, self-managed superfunds, financial advisers, we’ve had three out of the top 10 performing funds in that sector, over the past 12 months. The underlying funds as I mentioned, we invest alongside our wholesale partners and our own property investments have done close to 16 per cent, per annum. And the underlying funds that we’ve invested into, have all beat their underlying benchmarks. So very good performance. And to be honest, performance drives the total returns of Charter Hall with equity inflow and the transactions that we can then do for our clients.
Carolyn Herbert: You’ve announced the potential IPO of a new long WALE REIT. Can you tell us what this is?
Richard Stacker: We’ve seen obviously more recent listings being very sector specific, so they’ve either been in the industrial recent petrol stations. The long WALE REIT will focus on long leased assets to government tenants, high quality corporates as well in long leased assets in industrial, office and retail property. It’s on track for listing in October. And we expect based on, we’ve seen comparables in the market trade at very good premiums to NTA, that this could similarly be a very attractive investment for retail investors and also institutions.
Carolyn Herbert: Finally Richard, what’s your guidance for FY17?
Richard Stacker: Absence of any unexpected events, we expect post-tax to be two per cent earnings growth and pre-tax, eight to nine per cent. Growth: the payout ratio will be very close to what it was in the previous year, between 85 to 95 per cent.
Carolyn Herbert: Richard Stacker, thanks for the update on Charter Hall Group.
Richard Stacker: It has been a pleasure.
Ends
