Full Year 2026 Mirvac Group Earnings Call Transcript
Key Points
- Operating profit increased 7% to $508 million, with NTA returning to growth and statutory profit improving across all asset classes.
- Investment portfolio shows strong fundamentals: 98% occupancy, positive leasing spreads, and positive valuation growth across every major asset class.
- Development pipeline is well-positioned with $5 billion of projects underway, all on track, and residential sales volumes up 15% with gross margins exceeding targets.
- Funds under management grew to over $18 billion, with significant capital raising and expansion of major fund vehicles, including the LIV Mirvac Fund and Mirvac Wholesale Office Fund.
- Balance sheet strengthened with gearing at 24.1% (below midpoint), $1.6 billion liquidity, and a $200 million share buyback announced as a value-accretive capital allocation.
- FY27 guidance indicates continued growth in EPS and DPS, with 63% of residential settlement target already exchanged, providing strong earnings visibility.
- Residential sales moderated in Q4 due to softer buyer sentiment, with a noted drop-off in sales activity post-budget and interest rate increases.
- 7 Spencer Street office asset underperformed, with leasing progress stalled and a further $200 million write-down, reflecting a slow Melbourne office market recovery.
- Net interest costs increased due to lower capitalized interest, and FY27 will see a headwind of less than $10 million from unwinding capitalized interest on apartment completions.
- Weighted average cost of debt is expected to rise to 5.7% in FY27, with look-through gearing expected to trend toward the top end of the target range.
- The company remains reliant on capital partnering transactions, with some planned deals (e.g., Aspect Central, Green Square) rolling into FY27, indicating execution risk.
- Construction cost escalation remains a concern, with expected increases of 4.5% in New South Wales and 4% in Victoria, though stabilized.
Welcome to Mirvac Group's FY26 results briefing. (Operator Instructions) The audio queue is now open, and you may join at any point during the meeting. Please be advised that today's conference is being recorded.
It is now my pleasure to hand you over to Mirvac's CEO and Managing Director, Campbell Hanan.
Well, good morning, everyone, and thank you for joining us for our full-year results presentation.
Joining me is our CFO, Courtenay Smith; our CEO, Investments, Richard Seddon; and our CEO, Development, Stuart Penklis.
I'd like to begin by acknowledging that we are presenting to you today from Gadigal land, and I'd like to pay my respects to Elders, past and present.
At our half-year results, we spoke about the momentum that was building across all parts of our business. This momentum has continued into the second half, and we have executed on all of our priorities for the year.
Our operating profit of $508 million is
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