Unibail-Rodamco-Westfield

URW Details

 Decent Performance in 1HFY19:Unibail-Rodamco-Westfield (ASX: URW) owns and operates a commercial property portfolio in Europe, United Kingdom and the United States. It has a market capitalisation of A$28.34 Bn as on 16 September 2019. Recently, the company announced that, on 30^th August 2019, Mr Fabrice Mouchel, Group Finance Director has sold 14,792 stapled shares and Class A WFD Unibail-Rodamco N.V. share at the consideration of €119.10 per stapled share, for a total amount of €1,761,727.20.  Apparently, he also purchased 14,792 stapled shares and Class A WFD Unibail-Rodamco N.V. share at €119.10 per stapled share, for a total amount of €1,761,727.20. The transaction was executed on Euronext Amsterdam and the ISIN Code of the stapled share is FR0013326246.

The company has delivered decent 1H FY19 results, despite the challenging retail environment. With a unique transatlantic platform, connecting the best brands with more than 1.2 Bn customer visits each year in the wealthiest catchment areas, the company’s portfolio is at the forefront of the changes in a rapidly evolving retail environment. Adjusted Recurring Earnings per Share (AREPS) for 1H FY19 came in at €6.45 as compared to €6.58 in 1H FY8, showing a decrease of -1.9%. This was mainly impacted by the completion of disposals in 2018 and 1HFY19 but partially offset by robust operating performance and implementation of IFRS 16.

The Gross Market Value (GMV) of the group’s assets stood at €65.0 Bn as at 30^th June 2019, on a proportionate basis. The Shopping Centre GMV stood at €55.7 Bn, reflecting a fall of 1.2% on a like-for-like basis. The Office GMV witnessed a rise of 4.1% on a like-for-like basis, and the figure stood at €4.8 Bn.The Gross Market Value of the Convention & Exhibition division witnessed a decline of 6.2% on a like-for-like basis, because of an increase in the discount rate.

As per the release dated 31^st July 2019, the company stated that in the last 12 months, it disposed €3.2 Bn of office and retail assets. These were disposed at an aggregate net initial yield (NIY) of 4.2% and 5.4%, and a 6.2% and 8.4% premium to the latest book values, respectively. With these transactions, the Group exceeded its initial target of €3 Bn of disposals well ahead of schedule.


Half-Year Results (Source: Company Reports)

What to Expect:The Group anticipates Continental European Like-for-like NRI to grow by around 3% for 2019, and financing conditions have remained more favorable than expected. Consequently, the Group increases its 2019 AREPS guidance by €0.30, of which around €0.18 is because of the implementation of IFRS 16 as of January 1, 2019, to a range of between €12.10- €12.30. The company stated that its €10 Bn pipeline is well-positioned for a mixed-use future, now with 50% of Gross Lettable Area (GLA) in retail and the rest in dining & leisure, offices, residential, and hotels. With the unique skills, this would continue to contribute to value creation.

Stock Recommendation:The group has inked a first-of-its-kind agreement with The VOID (Westfield San Francisco Centre), which is a leading immersive virtual reality experience operator, in order to roll out their concept in over 25 of the URW’s Flagship destinations in both the US and Europe. The company further stated that the average cost of debt stood at 1.6%, and average debt maturity extended to a record 8.0 years.The company reported return on equity of 4.2% in 1H FY19 as compared to the industry median of 3.9%, which reflects that the company is providing decent returns to its shareholders as compared to the broader industry. With respect to the stock’s performance, it produced returns of -7.91% and -11.11% in the time span of three months and six months, respectively. Currently, the stock is trading at close to its 52-week low levels of $9.500. Hence, in view of above-stated facts and current trading levels, we advise the investors to closely watch the stock at the current market price of A$10.330 per share (up 0.879% on 16 September 2019) and wait for a few more catalysts that may drive the stock.

 
URW Daily Technical Chart (Source: Thomson Reuters)

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.