Results: Rural Funds Group share price higher after posting 30% revenue gain

The Rural Funds Group (ASX: RFF) share price is up today after the company released its results for FY19.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Rural Funds Group (ASX: RFF) share price is up today after the company released its results for the 2019 financial year (FY19) to the ASX this morning. RFF shares have opened 3% higher at $2.07 after closing yesterday at $2.03.

What did Rural Funds tell us?

Property revenues for the company increased by 29.95% to $66.39 million – up from $51.09 million in FY18 attributed in part to acquisitions, lease indexation and capital expenditures.

Meanwhile, Total Comprehensive Income (TCI) fell 25% to $33.08 million and earnings per unit also fell 41% from 17.3 cents to 10.1 cents. The company stated that these falls are due to "$18 million non-cash revaluation decrements on interest rate swaps."

Adjusted Funds From Operations (AFFO) increased from $32.32 million in FY18 to $43.25 million in FY19 – a rise of 34%, while AFFO per unit grew 4.7% to 13.3 cents.

The gearing ratio has declined from 37.7% in FY18 to 31.2% in FY19, which remains in Rural Fund's 'target range' of 305 – 35%.

Distributions rose from 10.03 cents per unit in FY18 to 10.43 cents per unit for FY19 – a rise of 3.98%, whilst the payout ratio for said distributions fell from 79% to 78% year-on-year.

The number of properties owned by Rural Funds has increased from 38 to 50 this financial year, with a weighted average lease expiry of 11.3 years (down from 12.4 years in FY18). Currently, 58% of RFF property leases are CPI linked, whilst 40% have fixed indexation.

Outlook for Rural Funds

In terms of guidance, Rural Funds is expecting that AFFO per unit will rise to 14 cents in FY20, while the distribution per unit will also rise to 10.85 cents (a further 4% rise if executed). Rural Funds expects this to represent a payout ratio in FY20 of 77%.

The company expects that revenue going forward will be divided as follows: 42% from almonds, 27% from cattle, 14% from poultry, 5% from vineyards, 4% from cotton, 2% from macadamias and 6% from other sources.

The company also released the EY (Ernst & Young) report into the 'short-seller' allegations made by the Bonitas Group earlier this month. The report categorically refuted all allegations and supported Rural Funds' positions that were released in response to the allegations. Rural Funds Group also announced the commencement of legal action against Bonitas.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a rough day of trading this Tuesday.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

ASX 200 takes the latest RBA interest rate verdict in stride

The ASX 200 looks to have shaken off today’s RBA interest rate call.

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Share Gainers

Why this ASX 300 stock is soaring 12% after a disastrous year

This company has had a dramatic reversal of fortunes this Tuesday...

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Core Lithium, Imugene, Lifestyle Communities, and Mineral Resources shares are charging higher

These shares are having a good session. What's going on?

Read more »

A miner stands in front oh an excavator at a mine site
Broker Notes

Broker says buy the dip on ASX 200 uranium share with 69% upside

Shaw and Partners says this ASX uranium stock is trading at an attractive price point right now.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Domino's, Lynas, Paladin Energy, and St Barbara shares are sinking today

These shares are having a tough session. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

4 ASX All Ords shares up 315% to 682% in a year!

Investors have sent these ASX All Ords shares flying higher. But why?

Read more »

Woman on a swing at a beach, symbolising passive income.
Dividend Investing

Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks

Let’s unearth some other passive income opportunities.

Read more »