Centuria Capital Group (ASX:CNI) 1H20 results & outlook


by Rachael Jones

Centuria Capital Group (ASX:CNI) Joint CEO, John McBain talks 1H20 results & outlook, including the contribution from recent acquisitions as group AUM now exceeds $7.3B.

Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me today from Centuria Capital Group (ASX:CNI) is Joint CEO John McBain. John, welcome back to the network.

John McBain: Thank you.

Rachael Jones: For people new to the company, could you explain Centuria Capital Group for us?

John McBain: Centuria Capital Group's been around over 20 years. Centuria Capital Limited itself is the corporate head of a wider group, and under that group we have a range of listed and unlisted property funds, as well as a life business. The listed property funds, or REITs, are CIP, which is our Centuria Industrial REIT, and COF, our Centuria Office REIT.

Rachael Jones: And, John, what were some of the highlights during the first half?

John McBain: We had an excellent half. Real estate acquisitions during the half were $1.2 billion, which is a record for any previous period. In fact, a record for 12 months for the group. In addition, we settled the Heathley Healthcare acquisition and, at the same time, established a significant $500 million wholesale institutional mandate with AXA IM and Grosvenor.

We entered the ASX 300 for the first time, so we're getting a wider range of institutional investors and broadening our register. And our market capitalisation exceeded $1 billion for the period.

Rachael Jones: And turning to the results themselves, can you summarise them for me?

John McBain: We announced an interim distribution of 4.5 cents per security and, in addition, we reported an earnings per security for the half of 8.1 cents. That goes along with our full-year guidance, which we issued at 12.5 cents, and our DPS for the year, or distributions per security, of 9.7 cents. And finally, our total shareholder return for the 12 months to 31 December was 86 per cent. This was significantly above the ASX 200 REIT accumulation index, which recorded 19.4 per cent.

Centuria Capital Group 1H20 Results

Centuria Capital Group 1H20 Results

Rachael Jones: And, John, what is your view on the markets Centuria deals in?

John McBain: We've been around over 20 years, so we've seen markets fluctuate. We're very comfortable with the asset sectors we're involved in.

One of the reasons for this is, globally and domestically, the very low cash and deposit rates that we're experiencing. So, the type of funds, the typical funds that professional fund managers are issuing for property are vastly in excess of these returns.

But not only that. This year, every capital rise that we've been into, either at Centuria Capital's level or at the REIT level, has been extremely well supported by the equity capital markets. So, we see our institutional investors in this global search for yield. And they're the two major factors that underpinned our confidence.

Rachael Jones: And, John, you've recently acquired Augusta Capital, a New Zealand fund manager. What can you tell me about this?

John McBain: Augusta Capital is the largest pure-play listed funds manager in New Zealand. It controls NZ $2.1 billion of assets, predominantly commercial industrial, with some new tourism and diversified funds to come this year. And we think globally, the New Zealand real estate market is very well liked and recognised. It's very close and easy for us to maintain management influence and support for them. So, we see using our balance sheet and systems to help what's already a good team as being something to look forward to -- a lot of growth in New Zealand.

Rachael Jones: And, John, finally, what are Centuria's main ambitions and goals?

John McBain: Well, firstly, we are very investor-focused, so whether it be an institution investing in one of our listed real estate trusts or a private investor investing in an unlisted fund, we're close to our investors and we like to perform for them.

Secondly, we're very focused on growing earnings per security. It's the one thing we think we're accountable for, and it's taken very seriously inside Centuria.

In terms of growth in assets under management, that's another statistic that we look carefully to. We're in a small peer set of Australian listed external funds managers, and we want to ensure that our growth is amongst the top of that peer set. Certainly, the first half this year, we've managed to have spectacular growth of 18 per cent, and we intend to keep that performance up.

Our ambition is that, whilst we can grow at these levels, we'd like to claim the third spot in our peer set. And I think that's a very reasonable ambition.

And finally, as a participant in the public markets, we are taking very close attention to our governance and compliance and honouring our social responsibilities.

Rachael Jones: John McBain, congratulations once again on your half-year results and thanks for the updates.

John McBain: Thank you.