Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Distributable EPS for FY24 was in line with guidance and at the top end of the original range.
• The investment portfolio value increased by 1% to $2.8 billion, with a 1.1% increase in NTA per security.
• Gearing was slightly lower at 32.6%, with significant refinancing and interest rate hedging activities completed.
• Successful non-core asset sales achieved a 3.8% premium to book value, with further assets in due diligence.
• High level of interest rate hedging with 93% of debt hedged or fixed for FY25, providing cost certainty.

Negative Points

• Net profit after tax was down 20% due to higher interest costs from debt-funded acquisitions.
• The convenience and mobility division faced a 22% decline in like-for-like earnings due to cost pressures.
• Operating expenses were down, but higher interest expenses offset these benefits.
• The OTR conversion program has been slower than expected, impacting potential growth.
• Market rent assumptions led to a 0.7% decline in assessed market rents during the second half of the year.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with ASX:WPR.

Q: Can you elaborate on the value-creative opportunities Waypoint REIT is considering? A: The primary focus is on participating in the redevelopment of express sites to the OTR format, which is currently the main priority. (Unidentified_1)

Q: With $150 million in liquidity, do you expect to spend all of it in FY25? A: No, we do not expect to spend all of it in FY25. We are holding onto it to potentially participate in the OTR rollout, provided the returns are acceptable. (Unidentified_1 and Unidentified_2)

Q: How do you plan to capture upside from the OTR rollout, especially with leases expiring in 2026? A: The FY26 expiry process will start later this year. We will negotiate rents and potentially extend leases, especially if they are part of the initial tranche of OTR conversions. (Unidentified_1)

Q: What has been your experience with non-core asset sales, and what are your expectations for the next 6 to 12 months? A: The market was patchy last year, but activity has picked up significantly. We are seeing interest from private buyers and syndicators, and expect more opportunities as interest rates stabilize. (Unidentified_1)

Q: Can you provide more details on the $375 million of interest rate swaps you entered into? A: The swaps were entered progressively throughout the year to avoid timing risks. They were done at market rates, and the impact is reflected in our hedge disclosures. (Unidentified_2)

Q: How are the Viva conversions impacting valuations, and how is funding captured in evaluations? A: The impact on valuations depends on market rent changes and potential lease extensions. Any funding from us would require a lease extension to create value uplift. (Unidentified_1)

Q: What is the trend in market rent assumptions, and what has changed? A: Assessed market rents decreased by 0.7% in the second half, with 19 or 20 market rents assessed lower. This reflects the valuation process and not tenant performance. (Unidentified_1)

Q: Can you provide more color on the refinancing discussions and margins? A: We attracted new lenders and saw a slight increase in margins due to seeking longer tenure. The increase was not significant on an apples-to-apples basis. (Unidentified_2)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.