Abacus Group delivers solid HY24 results and strategic changes

Abacus Group (ASX: $ABG) has announced its half-year results for the period ending 31 December 2023, achieving a HY24 FFO of $40.1 million (4.5 cents per security) with FFO from continuing operations up 4.0%. The company successfully de-stapled its Self Storage segment, creating the standalone Self Storage REIT, Abacus Storage King (ASX: $ASK), and disposed of two assets for net consideration of approximately $107 million.

Executive Commentary on HY24 Results and Strategic Changes

During the period, Abacus Group diversified its income streams and directed capital towards assets delivering the best risk-adjusted returns in the near term. The company extended its bank debt and increased its limit by $125 million to $1.2 billion. Abacus Group's ongoing focus on sustainable practices and enhancements aligns with its commitment to achieve Net Zero scope 1 & 2 emissions by 2030, contributing to a 39% reduction in Scope 1 and 2 GHG emissions intensity compared to the FY19 baseline.

Summary and Outlook for Abacus Group

Abacus Group's HY24 results demonstrate a solid performance as a standalone entity, with a more focused portfolio of Commercial assets and a strategic stake in ASK REIT. The company's strong balance sheet, negligible near-term capital requirements, and minimal debt expiry until FY27 position it well for the future. Abacus Group reaffirms its FY24 distribution guidance of 8.5 cents per security and a full-year payout ratio of between 85% and 95% of FFO. The company remains committed to reviewing its portfolio to invest in assets that provide a strong and growing income stream in the medium to long term, while maintaining a focus on sustainable outcomes and active asset management strategies.