Centurion (SGX:OU8)s FY23 results came in slightly above expectations with overall revenue and core profit coming in at 105%/107% of our forecast.
Revenue rose 14.8% y-o-y to S$207.2mln from high financial occupancies and positive rental reversions across all segments. Gross profit rose 21.4% to S$150.0mln, backed by higher rental rates and operational efficiencies.
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2H23 performance
Centurion reported 2H23 revenue growth of 22% to S$109.3mln due to increased revenue contribution from both its purpose-built workers accommodation (PBWA) and purpose-built student accommodation (PBSA) in all markets (SG: +25% / MY: +7% / AU: +26% / UK: +21%). As a result, gross profit and gross profit margins improved 27% y-o-y and 3pp y-o-y accordingly.
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Despite net gearing being reduced to 38% in FY23 (FY22: 43%), interest expense has risen by 31%. However, we think this is not a cause for concern as operating cash flow remains strong at S$122.8mln vs short term debt of S$58.9mln. In view of the peak interest rates and possible dovish environment ahead, Centurion might see reduced interest expense in FY24.
Operating metrics
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Above is an excerpt from a report by Lim & Tan Securities Research. Clients of Lim & Tan Securities may be the first to access the full PDF report @ https://www.limtan.com.sg/.
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