This week in property

Scentre’s sales rise but profits halve

Scentre Group, the owner-operator of 42 Westfield shopping centres, has posted a full-year net profit of $1.179 billion, down 48.4 per cent from $2.287 billion a year ago, a figure, however, that was lifted by windfall gains.

The company’s funds from operations, the primary earnings metric, came in at $1.344 billion, up 0.4 per cent from $1.3395 billion in 2018.

Drilling into the detail of Scentre’s results, the Australian Financial Review said that there were signs of robustness as specialty in-store sales grew 2.8 per cent in the last quarter across the portfolio. Over the 2019 calendar year, that figure was 2.2 per cent.

By contrast, sales at department stores in Scentre’s portfolio are hurting, down by 4.8 per cent year-on-year and by 3.9 per cent in the last quarter, the AFR reported.

The group’s shares were trading 1.98 per cent lower at $3.705 following the announcement, but had recovered to $3.76 by Friday afternoon.

Chief executive Peter Allen said he was pleased with the result and that earnings and distributions had grown in line with guidance, and that annual customer visits to centres was set to grow to 548 million.

“For over 60 years, our business has constantly been adapted to be at the forefront of consumer change,” Allen said.

“Our ability to directly engage with the customer and deliver what they want will continue to deliver long-term sustainable earnings growth.”

Distribution per security will be 22.60¢ for the full 2019 financial year compared with 22.16¢ in 2018.

Woolworths sets up first e-commerce store in Victoria

Supermarket giant Woolworths has started work on its first Australian e-store at Carrum Downs, in southeast Melbourne, the first big step in Woolworths’ partnership with Takeoff Technologies which was announced last August.

The 2400sqm facility will be added to the back of the grocery store will house automated picking technology to support the supermarket’s online orders.

Carrum Downs will be the first of three supermarket sites to test the new technology in 2020. The other confirmed sites are in Auckland and Christchurch, New Zealand.

The supermarket giant’s online sales lifted by over 30 per cent in Australia in FY19, Woolworths’ director of e-commerce, Annette Karantoni, said.

“Our customers will only continue to look for faster and more flexible delivery options in the future. We believe smart fulfillment through our local store network is key to delivering this. We’re excited to see how this hyperlocal model develops and delighted to start our journey in Carrum Downs.”

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