GMG (ASX) GMG Directors selling off shares

Originally posted by sabine: ↑

I was just looking a story from last August where UBS was recommending it.
As a ‘safe’ (boring?) property investment company it seems kind of solid to me if it can be purchased at a low price although those dividends don’t sound very exciting.
… But I do like it that the man who started the company still runs it (https://www.goodman.com/about-goodman/our-history)

And in regards ‘zero expertise’ does it need that to build a data centre?
Seeing as these centres are not even built yet, presumably someone will be taking advice on how to go about it before they start?
And in these times having $1.4billion in the bank is not to be sneezed at.

Cheers and thanks for your thoughts.

https://aktengineering.com.au/asx-g...ntials-as-it-the-australian-financial-review/
ASX GMG PROFIT: GOODMAN GROUP TOUTS ITS AI CREDENTIALS AS IT … – THE AUSTRALIAN FINANCIAL REVIEW

by AKTEngineering | Aug 24, 2023 | Engineer

Goodman Group is set to become a global data centre powerhouse over the next decade after chief executive Greg Goodman unveiled plans to develop three to four gigawatts’ worth of these facilities across its portfolio – equivalent to about $30 billion in end value.

Fuelled by the uptake of artificial intelligence, the industrial property giant is already well on track to delivering on this lofty target after revealing that 30 per cent of its $13 billion of projects being built around the world are data centre developments.

“It’s a really significant opportunity,” Mr Goodman told The Australian Financial Review after the group bucked the trend of asset write-downs occurring across the listed commercial property sector and beat its full-year earnings guidance.

Plans to grow its data centre business along with the group reporting operating profits of $1.78 billion, up 17 per cent, sent Goodman securities surging 5.7 per cent on Thursday to close $1.13 higher at $20.88, as the All Ordinaries Index slipped into the red.

“The business continues to evolve,” said UBS analyst Grant McCasker, who rated Goodman a “buy”.
“Three gigawatts of data centre power capacity differentiates Goodman from global peers and should continue to get more attention from investors as it’s not well understood,” he said.

Mr Goodman said data centres were typically higher-value, large and complex development projects which fitted into its plans to do fewer, but bigger-dollar-value projects.
“There’s not one of these data centres which is not a half-a-billion-dollar project,” he said.
He said Goodman had already laid the foundations for these projects by spending the past five to six years powering up sites and putting the infrastructure in place. “These opportunities are already embedded in the $81 billion of assets we are already own.”

Mr Goodman said demand for data storage was to cater for the take-up of regenerative AI from its big “hyperscale” customers, which include the likes of Amazon, Tesla and JD.com. “There’s big demand for this stuff around the world, but not enough supply.”
There were also opportunities for Goodman to expand into data centre infrastructure, where it would be the owner and operator of these facilities, he said. “You get a return on the business, and you’re offering an end-to-end service.”

Alongside the big push into data centres – and as part of plans to extract maximum value from its sites in highly land-constrained markets such as Sydney – Mr Goodman flagged plans to rezone more of its $30 billion Australian portfolio for build-to-rent housing use.
“A lack of available housing means the urban renewal cycle is ticking up again,” he told analysts at a results briefing.

He said rezoning could deliver about 30,000 apartments in Sydney and Melbourne but was dependent on the actions of governments and planners, whom he urged to “get their skates on and make decisions”.

While it beat earnings guidance, Goodman was not immune to the impact of higher interest rates on property values as statutory profit fell 54 per cent over the 2023 financial year to $1.56 billion, due to lower valuation gains across its portfolio.

Goodman’s share of $800 million of valuation gains across its investment partnerships was $264 million compared with a gain of $2.3 billion in the 2022 financial year.
Driving the lower boost to valuations were an expansion of capitalisation rates (or investment yields) by 50 basis points to 4.5 per cent.
These were offset by like-for-like income growth of 4.7 per cent driven by rents being reset to market rates that were 37 per cent higher in Australia, where vacancy is below 1 per cent, 66 per cent up in North America and 17 per cent stronger in Europe and the UK.

Amid surging borrowing costs, Goodman continued to benefit from very low gearing at just 8.3 per cent, while having $1.4 billion of cash in the bank.
This cash mountain delivered a significant increase in the interest income received by the company, which offset any impact of higher interest rates and meant it enjoyed – incredibly – a reduction in interest cost.

Goodman forecast lower operating earnings per share growth of 9 per cent, but has a history of upgrading its guidance during the year.
The forecast distribution for fiscal 2024 was an unchanged 30¢ per unit.

“We view initial guidance as neutral, with the potential to increase through the year,” said JP Morgan analyst Richard Jones.

Mr Goodman forecast further increases in industrial property capitalisation rates, but said these would hurt the values of secondary assets, which he dubbed “commodity real estate”.
“We don’t do commodity real estate. We’re focused on assets that are special, where land is constrained, where we can help customers drive productivity growth,” he said.
“We won’t look at a project unless the return is north of 7 per cent.”

Expand

I’m likely just having a grump at the lack of shareholder return and value here.
other than my concern at Goodman veering outside it’s traditional business, and a ~50% book value, i still consider gmg should be considered. I’m assuming you have check scentre and vicinity also?

please don’t pay attention to my grizzle’s, am quite new to this and learning as I go. Dyor.

https://www.commercialrealestate.com.au/news/goodman-execs-whacked-on-pay-after-second-strike-1183673/

note. I’m not the only one frustrated by managmentsmtake vs shareholder value…..

No.	Vol.	Price($)
14	3585	$34.47

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3585

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No.	Vol.	Price($)
23	5984	34.420
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21	3384	34.400
9	1653	34.390
10	3922	34.380

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5984

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34.410

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34.380

Price($)	Vol.	No.
34.430	777	4
34.440	2075	7
34.450	2063	12
34.460	1594	9
34.470	2456	7

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34.430

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34.440

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2456

(20min delay)
Last $34.47		Change 0.800(2.38%)		Mkt cap ! $65.36B

Open	High	Low	Value	Volume
$34.08	$34.49	$34.05	$34.77M	1.012M


Last $34.46		Change 0.800 ( 1.98 %)
Open	High	Low	Volume
$34.08	$34.50	$34.08	385291
Last updated 15.33pm 27/05/2024 ?

I’m likely just having a grump at the lack of shareholder return...

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