Centuria Capital Group (ASX:CNI) 1H18 results


by Jessica Amir

Centuria Capital Group Limited (ASX:CNI) CEO, John McBain, talks 1H18 results, growth in funds under management (FUM) and the successful addition of the 360 Capital Group platform.

Jessica Amir: Hi, I'm Jessica Amir with the Finance News Network, joined by Centuria Capital Group's group CEO, John McBain. Hi, John. Welcome back.

John McBain: Thanks very much.

Jessica Amir: John, for those new to the company, just give us an introduction to Centuria Capital.

John McBain: Centuria is an ASX listed specialist investment company. We have $4.6 billion in assets under management, split between $3.7 billion in property funds management businesses and $900 million in an investment bond business. Our two listed funds are both included in the ASX 300.

Jessica Amir: Turning to financials, what were some of the highlights from the first half?

John McBain: Well, the first half was transformational. We've taken over a large property platform and totally changed the nature and scale of our business. Our operating earnings were $30.1 million, a massive increase from last year, and we've also got a strong focus on recurring incomes now. Our dividends are strong at 4.1 cents, and we have the ability now, to use our balance sheet to grow the company even further.

Jessica Amir: Now, to the business in more detail, just tell us about your three core business units.

John McBain: Our two ASX listed real estate investment trusts control about $2 billion of assets. Centuria Metropolitan REIT is Australia's largest REIT, solely focused on the metropolitan office investments. So, it has a range of high quality government and ASX tenants. Centuria Industrial REIT controls over a billion dollars of industrial properties throughout Australia. It's the largest real estate investment trust solely focused on income producing properties andagain, it has a range of high quality tenants, both government and non-government, throughout Australia.

Our unlisted property funds managed business controls $1.7 billion in assets throughout Australia. This business has been around for 17 years and has turned over $17 billion of assets. Our investment bond business performed well in the first half. Assets under management grew 7 per cent, contributing strongly to the total growth in assets under management for the group. We are the fourth largest operator in the friendly society bond market and we're expecting this growth to continue.

Jessica Amir: You said 2018 was going to be a transformational year. Just tell us how it's shaping up, in terms of assets under management or AUM.

John McBain: Around about 12 months ago, we acquired a major property funds management platform, which was transformational for the group. By that I mean we trippled our market capitalisation and we really shifted the nature of our earnings with a far greater bias towards recurring earnings, which the market seems to have liked.

During the half specifically, we grew assets under management by just under 20 per cent. This comprised of property acquisitions through our property funds of 655 million, which makes us one of the most active property funds managers in the market. We also achieved 115 million in revaluations during the first half, and in addition, as I indicated previously, our investment bond business grew by 7 per cent, so all-in-all a very successful half, and setting us up very well for the final half.

Jessica Amir: And turning to the final half, what's your guidance?

John McBain: We reaffirmed our operating earnings guidance at 15.8 to 16.2 cents, very comfortable, and we're also on record with distribution guidance of a further 4.1 cents, making a total of 8.2 cents for the total period.

Jessica Amir: Congratulations on your set of numbers, John McBain, and thank you for the update.

John McBain: Thanks for having me.


Jessica Amir

Finance News Network
Jessica is a senior finance journalist and presents bulletins including the Market Outlook, Market at Midday and Market Wrap. She also interviews ASX CEOs and leading fund managers. She joined FNN in January 2017 with over six years of broadcast journalism experience including with Sky News Business, ABC 1, ABC's The Business and ABC24. She’s also worked as a TV reporter for Prime 7 and WIN News. Jessica has worked in financial planning for over six years with leading wealth managers and in real estate.