Diversified fund manager juggernaut, Charter Hall has defied the pandemic-hit office and retail sectors and its competitors with a doubling in statutory profit to $345.9 million in the first half of the 2022 fiscal year, thanks to stronger performance and transaction fees and development earnings.
Propelling the group was the funds under management (FUM), which grew by $27.2 billion to $79.5 billion, or 52 per cent, driven by property FUM growth of $9 billion or 17.2 per cent.
The deal with David Paradice’s, Paradice Investment Management (PIM) partnership represents $18.2 billion of new FUM in the period. It is expected this partnership will be a significant cog in the Charter Hall wheel in the future.
Taking out lumpy valuations and one items the net profit was $263.9 million, a rise of 104 per cent on the prior $134.6 million and well ahead of some broker estimates of $226 million.
The ASX-listed $7.55 billion group, owns, manages and co-invests in malls, office towers, including the David Jones flagship store in Elizabeth Street, Sydney, petrol stations, pubs and large format retailers.
In the suite of listed and unlisted funds it manages, Charter Hall has focussed on owning properties with long weighted average leases (WALE).
Chief executive David Harrison issued an earnings guidance upgrade to $1.12 for post-tax operating earnings per security, a rise from the previous guidance of $1.04. The Interim dividend was 19.7¢ payable on February 28.
“Charter Hall’s strategy of partnering with tenant and investor customers continues to deliver strong returns for security holders,” he said.
He said investors continue to endorse the investments in long WALE strategies.
The development pipeline continues to grow and now stands at $13.2 billion, while the investment capacity is $6.7 billion across the platform.
Macquarie Equities analyst Stuart McLean has issued an-outperform recommendation on the stock, saying Charter Hall’s upgrade is broadly in line with expectations.
“We expect the market to focus on strategy and the Paradice Investment,” he said.
Read More: Markets Live, Friday February 25, 2022