BRIEFS
Aurizon has boosted its dividend as it steps up cost cutting to offset lower growth rates for coal demand in Asia over the longer term. Australia's largest listed rail company posted a 1 per cent rise in full-year net profit to $447 million after booking the cost of 960 redundancies. More are expected in the year ahead. The company will pay a final dividend of 8.2¢ a share on September 23, up from 4.6¢ a year earlier.
Dexus dips
Dexus Property chief executive Darren Steinberg reported a fall of 0.7 per cent in profit to $365.4 million for the year to June 30, with a 12.1 per cent rise in annual distributions from 5.35¢ to 6¢. That payout included contributions from the group's unlisted trusts. Despite a weaker office market outlook, Mr Steinberg forecast earnings per security of 8.15¢, representing growth of 5.2 per cent. On the group's option over a 14.9 per cent stake in rival Commonwealth Property Office Fund, he said Dexus had no intention of making a takeover offer for CPA.
Challenger boom
Net profit has almost tripled at retirement funds company Challenger amid growing demand for annuities from baby boomers. Challenger on Monday recorded a net profit of $417 million for the latest year, with normalised profit up a more modest 4 per cent to $308.5 million. The company said it had received record flows into its annuities and funds management businesses, with total assets under management rising 34 per cent to $44.8 billion.
Frequently Asked Questions about this Article…
Aurizon reported a 1% rise in full-year net profit to $447 million and announced a higher final dividend of 8.2¢ per share payable on September 23, up from 4.6¢ a year earlier.
Aurizon is accelerating cost cutting and has booked the cost of 960 redundancies because it expects lower long-term growth in coal demand from Asia, and more redundancies are expected in the year ahead.
Income investors may welcome the bigger final dividend, but it comes alongside modest profit growth and a company-wide restructuring. Consider the dividend boost together with Aurizon's cost-cutting measures and long-term outlook for coal demand.
Dexus reported a 0.7% fall in profit to $365.4 million for the year to June 30, while annual distributions rose 12.1% from 5.35¢ to 6¢ per security, with that payout including contributions from the group's unlisted trusts.
Dexus forecast earnings per security of 8.15¢, representing growth of 5.2% despite a weaker office market outlook. The group holds an option over a 14.9% stake in Commonwealth Property Office Fund (CPA) but said it has no intention of making a takeover offer for CPA.
Challenger's net profit almost tripled to $417 million, driven by record flows into its annuities and funds management businesses. Normalised profit rose 4% to $308.5 million, and total assets under management increased 34% to $44.8 billion.
Challenger’s 34% AUM increase to $44.8 billion reflects strong demand for annuities and funds management. For investors, higher AUM can translate into more fee revenue and scale benefits, which supported the company’s improved profits.
Investors should watch sector-specific risks noted in the article: Aurizon faces long-term lower coal demand from Asia and is undergoing redundancies; Dexus is dealing with a weaker office market despite higher distributions; Challenger’s performance depends on continued strong flows into annuities and funds management.
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