Mirvac Group

Operational Highlights for Q1FY20:Mirvac Group (ASX: MGR) is Australia’s leading and diversified property group, with an integrated development and asset management capability. The company has 45 years of experience in the property industry and has an unmatched reputation for delivering superior products and services across businesses. The market capitalisation of the company stood at ~$12.47 billion.

During the first quarter of FY20, the company made a steady progress as its office & industrial division continued to perform well. This was underpinned by the favourable office and industrial market conditions, and sustained demand for high-quality space in Sydney and Melbourne CBDs and fringe locations, where 85% of the company’s portfolio is located.

In the company’s residential business, there was an uptick in enquiries, and it is expected that this will translate to sales volumes in due course.The company remains focused on ensuring that their product is of the highest quality and is delivered together with amenity that is carefully curated to enhance the lifestyle of communities.

Office & Industrial Highlights: Comingto the Office highlights, the company maintained a high occupancy of 98.4 per cent, which was 98.2 per cent as on 30^th June 2019. The company has completed approximately 17,700 square metres of leasing activity and increased WALE (weighted average lease expiry) to 6.9 years, which strengthens the security of future income.

Talking about the Industrial highlights, the company maintained a high occupancy of 99.7 per cent with a WALE of 7.5 years.The company completed approximately 8,000 square metres of leasing activity and submitted a Development Application for the masterplan of a new industrial led employment precinct at 300 Manchester Road, Auburn. The company expects that the site will cater for a broad range of industrial occupiers, including small scale local amenities.

Retail Highlights: The company maintained high occupancy of 99.1 per cent and recorded solid comparable moving annual turnover sales growth of 2.6 per cent and comparable speciality sales growth of 2.0 per cent.The company achieved comparable speciality sales productivity of over $10,000 per square metre on a speciality occupancy costs of 15.6 per cent and executed 99 leasing deals across approximately 14,000 square metres, with leasing spreads remaining positive.


Retail and Speciality Sales by Category (Source: Company Reports)

Residential Highlights: The company settled 613 residential lots and is on track to achieve more than 2,500 settlements for FY20, and the defaults remain below 2 per cent.The company has maintained a high level of residential pre-sales at $1.3 billion and released over 240 lots during the quarter.

Guidance for FY20: The company has given an operating EPS guidance of 17.6 to 17.8 cps for FY20, which denotes an increase in earnings of 3 to 4 per cent. The company has given distribution guidance of 12.2 cpss, that represents dividend per share growth of 5 per cent.

John Peters and Elana Rubin Resign from Mirvac’s Board: The company announced that, as part of its Board succession planning, Mr John Peters and Ms Elana Rubin would resign from the Mirvac Board and relevant committees, effective after Mirvac’s AGM, which is to be scheduled on 19^th November 2019.

Stock Recommendation: As per the ASX, the company’s stock is trading towards its 52-week high levels of $3.415 with PE multiple of 11.49x and an annual dividend yield of 3.66%. It has a higher EV/EBITDA multiple and price to cash flow multiple of 17.2x and 21.9x as compared to the industry median of 20.7x and 20.0x on TTM basis, showing the stock to be overvalued. Therefore, considering the above-stated facts along with valuations and current trading levels, we give an “Expensive” recommendation on the stock at the current market price of $3.150 per share, down by 0.631% on 22^nd October 2019.

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.