The Goodman Group (ASX: GMG) share price is among the best performing stocks on the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index this morning after it posted a profit upgrade.
Shares in the warehousing property group jumped 5.8% to $16.29 to be placed fourth of the ASX 200 leader board at the time of writing. The stock is trading at its highest level since 2008.
It's only the Breville Group Ltd (ASX: BRG) share price, Lynas Corporation Ltd (ASX: LYC) and Idp Education Ltd (ASX: IEL) share price that's running ahead of Goodman.
Better than expected
The property group announced a 14.1% increase in first half operating profit to $530.4 million and a 12.9% uplift in operating earnings per share (EPS) to 28.8 cents a share.
What's also exciting investors is that management upgraded its FY20 EPS guidance to 57.3 cents, or 11% ahead of last year's result.
It appears that the group is firing on all cylinders and the global lock-down due to the coronavirus isn't weighing on its operations.
No impact from coronavirus
"Goodman produced a solid performance from all segments for the first half of FY20. Earnings from investment, development and management all increased by at least 10% from 1H19, while assets under management (AUM) grew 15% to $49.2 billion," said the company's chief executive Greg Goodman.
"Our result continues to be driven by our focus on specific markets where e-commerce is growing, consumer expectations are rising and the need for more efficient supply chains is becoming greater."
Dividend misers
Despite the better than expected earnings, management is keeping its interim distribution (dividend) steady at 15 cents per stapled security. Don't expect the full year dividends to be upgraded either as Goodman reaffirmed it will pay 30 cents a pop as previously guided.
This is to keep the group's payout ratio in the low 50% and to give the group flexibility to step up investments – so it seems.
Goodman in sweet spot
Investors have been hearing about the resurging residential property market, but industrial properties are also in a sweet spot as Goodman pointed out the lack of supply.
"The combined effect of robust customer demand, scarcity of land and available space, and competition from alternative uses in our chosen markets, is generating strong property conditions," said Mr Goodman.
"The real estate fundamentals in our markets are set to deliver sustainable and competitive growth through high occupancy and sustained rental growth."
