Abacus Group Holdings Limited (ASX: $ABG) interim financial report for the half year ended 31 December 2023

Abacus Group Holdings Limited (ASX: $ABG) has de-stapled its Self Storage business from the Commercial business, resulting in the creation of two separately listed stapled groups of Abacus Storage King (ASX: $ASK) and Abacus Group, respectively. The company also changed its ASX code from ABP to ABG. The Group incurred a statutory net loss after tax of $143.6 million for the half-year ended 31 December 2023, compared to a profit of $84.5 million in December 2022. The profit includes certain significant items that are adjusted to enable securityholders to obtain an understanding of Abacus' funds from operations (FFO) of $40.1 million, down from $81.4 million in December 2022.

Executive Commentary on Group Results and Strategy

During the period, Abacus remained focused on diversifying its income streams, receiving management and development management fees as the external manager of Abacus Storage King. The Group also continued to earn rental income from its Commercial Office and Retail portfolio. Abacus remained disciplined in its capital allocation strategy, exchanging unconditional contracts to dispose two assets for a net consideration of approximately $107 million and purchasing a site adjacent to its current Commercial Office building at 99 Walker Street. The Group's investment property portfolio was revalued at period end, resulting in a loss of $139.3 million or 6.4% in the six months to 31 December 2023. The Group believes that its current Commercial Office portfolio remains robust despite the current economic environment driven by high inflation and rising interest rates. Abacus has targeted assets that deliver long-term, sustainable outcomes through active investment, asset, and development management with a strong focus on customer requirements. The Group successfully re-negotiated and agreed terms on its syndicated banking facility to increase the limit by $125 million, extending its facility tranches tenor on average by a further six months.

Summary of Financial Report and Outlook

The de-stapling of Abacus Group's Self Storage business and the change in ASX code from ABP to ABG mark significant developments for the company. The Group incurred a statutory net loss after tax of $143.6 million for the half-year ended 31 December 2023, compared to a profit of $84.5 million in December 2022. The profit includes certain significant items that are adjusted to enable securityholders to obtain an understanding of Abacus' funds from operations (FFO) of $40.1 million, down from $81.4 million in December 2022. The Group's investment property portfolio was revalued at period end, resulting in a loss of $139.3 million or 6.4% in the six months to 31 December 2023. Abacus believes that its current Commercial Office portfolio remains robust despite the current economic environment driven by high inflation and rising interest rates. The Group has successfully re-negotiated and agreed terms on its syndicated banking facility to increase the limit by $125 million, extending its facility tranches tenor on average by a further six months. The Group's capital allocation strategy supports its drive to improve FFO, and it continues to focus on diversifying its income streams and targeting assets that deliver long-term, sustainable outcomes through active investment, asset, and development management with a strong focus on customer requirements.