BWP’s profit fell by 93% in FY23, but here’s why investors weren’t panicking

Nick Sundich, August 21, 2023

When company’s profits fall by 92%, most shareholders would be panicking – but this was not the case with BWP Trust (ASX:BWP).

BWP Trust’s profit falls by 93%, but other metrics holding up

BWP recorded a $487m profit from ordinary activities in FY22, but this dropped to just $36m in FY23. This was mostly because of the fall in the property market – it made a $372m gain in FY22, but a $77m loss in FY23. Although this was a big swing, shareholders might be forgiven for thinking things could’ve been worse given the state of the property market.

Its total property portfolio was only down 2.2% (by $64.6m) to $2.9bn. The NTA (Net Tangible Assets) only fell by 3% from $3.75 to $3.87 and its revenues from ordinary activities (rent) rose by 3.2% from $153m.

Delivering where it counts

But most importantly, BWP paid the same distribution it did last year, paying $0.1829 per share, representing a ~5% yield. And ultimately, the main reason investors buy and hold REITs is for the dividends. In that respect, BWP has more than delivered with its results.

BWP (ASX:BWP) share price chart, log scale (Source: TradingView)

BWP shares are down 15% this year, but only retreated 1% this morning. Overall, things could have been a lot worse for this company.

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