Dexus Hangs On To Distribution Despite Downgrade

By Glenn Dyer | More Articles by Glenn Dyer

In contrast to the gloomy news from Vicinity, the shopping mall operator, CBD owner, and manager, Dexus says it has a clear picture about the year to June and can provide guidance on its distribution for the year to June.

The bottom line is that there will be one for the second half after a 27 cents a security payout for the first half, but there will not be any growth for the 2020 year, so in effect, there has been a downgrade.

On March 26, Dexus withdrew its 2020 guidance because of the looming impact of COVID-19 and the lockdowns across the country.

“..in consideration of the evolving COVID-19 situation and uncertainty at the time, the Board of Directors of Dexus Funds Management Limited withdrew Dexus’s FY20 full-year guidance for distribution per security growth and the detailed assumptions associated with this guidance,” the company said yesterday.

“As a result of the passage of time and further clarity regarding rental collections and cashflow, Dexus now provides FY20 full-year guidance for distribution per security.

“Barring unforeseen circumstances, Dexus expects an FY20 full-year distribution per security amount that is consistent with FY19. The FY19 full-year distribution per security amount was 50.2 cents.

“Dexus maintains a strong balance sheet with 25.4% gearing and $1.7 billion of cash and committed undrawn bank facilities available at 30 April 2020,” directors said.

In its half-year results announcement in February, Dexus directors said the company “upgrades its market guidance for distribution per security growth from circa 5% to circa 5.5% for the 12 months ending 30 June 2020.”

Not any longer.

Dexus securities rose 1.8% to $9.16. Dexus securities are down around 20% for the year to date.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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