Stocks’ Details
 

Stockland Corporation Ltd

Strategic Initiatives for growth:Stockland Corporation Ltd (ASX: SGP) has appointed Robyn Elliott to the new position of chief Technology and Innovation Officer (CTIO). The management believes that Robyn Elliott will further enhance the ability to progress commercial outcomes from innovation projects in the near term. Barry NEIL,director of the group changed holding from 61,718 shares of interest to 76,712 shares via market acquisition of ordinary stapled securities. Moreover, Mark Andrew STEINERT also increased holding from 2,546,363 shares to 2,667,363 shares whereas Stephen Eric NEWTON rose holding from 30,000 shares of interest to 35,000 shares.

On 1HFY18 performance basis, the statutory profit for the half was recorded at $684 Mn and the Group generated funds from operations (FFO) of $436 Mn, an increase of 18.2% on the previous corresponding period. This growth was driven by strong residential growth in 1HFY18. The company has more focus on generating strong demand across Residential business; consistent leads for Retirement Living business; vibrant resilient retail town centres; and employment hubs in Logistic and business parks. This strategy will help it to broaden customer base and support improved asset returns, operational efficiency and maintain capital strength going forward. Moreover, the dividend and distribution payable for the half year ended 31 December 2017 was 13 cents per share, with a forecast full year distribution of 26.5 cents for the year to 30 June 2018. We think that the company can grow further on the back of favourable economic conditions. The portfolio will also remain well positioned for sustainable long-term growth and value creation. Meanwhile, the stock has fallen 3.2% in last six months and moved up 5.3% in last one month as on March 19, 2018. We give a “Hold” recommendation on the stock at the current price of $4.13
 

Strong Operating Cash Flow (Source: Company Reports)
 

Gateway Lifestyle Group

Strategic Acquisition Move:Gateway Lifestyle Group (ASX: GTY) has announced the acquisition of two established residential land lease communities which are located in one of the South Australia’s major retirement markets for a total consideration of $45 Mn (excluding of transaction costs). In aggregate, the two properties comprise 555 long-term sites. Of which, the total 488 are occupied with a pipeline of 67 approved development sites. This acquisition will enhance the overall quality of Gateway Lifestyle’s portfolio and setup Gateway Lifestyle as one of the largest operators of land lese communities in South Australia. The company remains focussed on enhancing its portfolio of long term occupied sites through a combination of development and selective acquisitions strategy. On this, the purchase consideration will be mainly funded from the exiting syndicated debt facility, with $3 Mn of the purchase price to be funded by issuing the vendor with GTY fully paid ordinary shares at completion. In conjunction with this acquisition, Gateway Lifestyle has increased the syndicated debt facility limit to $280 Mn.

On 1HFY18 performance basis, the company has reported statutory net profit after tax of $20.6 Mn compared to the $20.1 Mn in the corresponding period last year. Rental revenue grew 12.8% to $30.8Mn in 1HFY18 from $27.3 Mn in 1HFY17. This was driven by 10.1% growth in long term site rental revenue during the same period. The 1HFY18 results reflect a solid start to the year with 119 new home settlements that further increased to 142 as on 22 February 2018 and continue to grow in long run. Further, the group in on track to deliver its guidance of 7% growth in Distributable earning in FY18E. Moreover, the Board of Directors declared an interim dividend of 3.75 cents per share to be paid on 15 March 2018. Meanwhile, GTY stock has fallen 8.72% in the last three months. While we keep an eye on the stock, we give an “Expensive” recommendationat the current price of $1.99  
 

Long-Term Revenue Growth Continues (Source: Company Reports)

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