Goodman Targets More Growth in Operating EPS in Fiscal Year 2025

By David Winning

SYDNEY--Industrial property owner Goodman set its sights on another year of operating earnings growth as artificial intelligence and cloud computing drive global demand for data centers.

Goodman said it expects operating earnings per security will rise by 9.0% to 117.2 Australian cents (77.3 U.S. cents)in the 12 months through June, 2025. The company also said it expects to hold its distribution flat at A$0.30 per security.

Goodman's maiden guidance has typically become a baseline for expectations that the company improves upon as the year progresses, reflecting a conservatism that is matched by management's cautious approach to debt. The company's properties are mostly fully let, offering a point of difference to owners of offices and malls which have been exposed to shifts in tenant behavior resulting from the impact of elevated interest rates.

Goodman twice raised its fiscal 2024 earnings guidance and still cleared that bar on Thursday. Goodman said its annual operating EPS rose by 14%, above guidance for 13% growth provided to investors as recently as May. The company reported a statutory net loss of A$98.9 million in the 12 months through June, compared to a A$1.56 billion profit a year ago.

In recent months, Goodman has been upbeat about the opportunity in data centers, which underpin a workbook that reached A$13.0 billion across 80 developments at the end of June. Management has also talked up demand for industrial property that is located closer to where people shop and work as companies rethink supply chains to save costs.

"We are in active negotiations with several customers for powered shell and fully fitted turnkey facilities across our power bank, with substantial new starts anticipated to commence between now and the end of 2025," Chief Executive Greg Goodman said of data centers.

Goodman said its property was 97.7% occupied at the end of June, with like-for-like net property income growth of 4.9% over the past year. Total assets under management fell 3% to A$78.7 billion.

Its gearing--a measure of debt relative to equity--was 8.4% at the end of June, up from 8.3% a year ago. Having a low gearing means Goodman is relatively well placed compared to many real-estate investment trusts to withstand the impact of elevated interest rates.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

August 14, 2024 18:33 ET (22:33 GMT)

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