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Scentre Group 1 : Appendix 4E For the year ended 31 December 2018 (previous corresponding period being the year ended 31 December 2017) Results for Announcement to the Market: 2018 2017 Revenue ($million) up 6.7% 2,635.1 2,469.6 Profit after tax attributable to members of Scentre Group ($million) down 45.8% 2,287.2 4,217.9 2018 2017 Funds from operations (FFO) attributable to members of Scentre Group ($million) up 3.8% 1,339.5 1,290.2 FFO per security attributable to members of Scentre Group (cents per stapled security) (i) up 3.9% 25.24 24.29 (i) The number of securities on issue as at 31 December 2018 was 5,316,997,206 (31 December 2017: 5,324,296,678) after the buy‐back and cancellation of 7,299,472 securities during the year. In calculating the FFO per stapled security 5,307,143,233 (31 December 2017: 5,311,595,241) weighted average securities was used. This excluded 12,701,437 (31 December 2017: 12,701,437) securities held by the Scentre Executive Option Plan Trust which have been consolidated and eliminated in accordance with accounting standards. It also excludes 4,452,008 (31 December 2017: Nil) weighted average securities resulting from the buy‐back and cancellation of 7,299,472 (31 December 2017: Nil) securities during the period. Dividend/Distributions for Scentre Group Cents per stapled security Dividend/distributions for the year ended 31 December 2018 22.16 Final dividend/distributions in respect of Scentre Group earnings to be paid on 28 February 2019 comprising: (ii) 11.08 ‐ dividend in respect of a Scentre Group Limited share 2.96 ‐ distribution in respect of a Scentre Group Trust 1 unit 3.40 ‐ distribution in respect of a Scentre Group Trust 2 unit 4.60 ‐ distribution in respect of a Scentre Group Trust 3 unit 0.12 Interim dividend/distributions in respect of Scentre Group earnings paid on 31 August 2018 comprising: (iii) 11.08 ‐ dividend in respect of a Scentre Group Limited share Nil ‐ distribution in respect of a Scentre Group Trust 1 unit 3.34 ‐ distribution in respect of a Scentre Group Trust 2 unit 7.74 ‐ distribution in respect of a Scentre Group Trust 3 unit Nil (ii) The number of securities entitled to distributions on the record date, 14 February 2019 was 5,316,997,206. (iii) The number of securities entitled to distributions on the record date, 15 August 2018 was 5,316,997,206. The dividend/distributions per security have been determined by reference to the number of securities on issue at the record date. The record date for determining entitlements to the final distribution was 5pm, 14 February 2019 and the distribution will be paid on 28 February 2019. The Group does not operate a distribution reinvestment plan. The dividend in respect of Scentre Group Limited and distribution in respect of Scentre Group Trust 3 are fully franked. Details of the full year components of distributions in respect of Scentre Group Trust 1 and Scentre Group Trust 2 will be provided in the Annual Tax Statements which will be sent to members in July 2019. Additional informationFor personal use only Commentary on the results is contained in the announcement and results presentation released to the Australian Securities Exchange. The additional information requiring disclosure to comply with listing rule 4.3A is contained in the attached Annual Financial Report which includes the audited consolidated financial report. The annual general meeting will be held on 4 April 2019. [1] Scentre Group comprises Scentre Group Limited ABN 66 001 671 496 (SGL); Scentre Group Trust 1 ARSN 090 849 746 (SGT1); Scentre Group Trust 2 ARSN 146 934 536 (SGT2) and Scentre Group Trust 3 ARSN 146 934 652 (SGT3) and their respective controlled entities. For personal use only Annual Financial Report 31 December 2018 Scentre Group Limited ABN 66 001 671 496 Annual Financial Report SCENTRE GROUP For the Financial Year ended 31 December 2018 Contents 1 Joint Chairman and Chief Executive Officer Letter to Securityholders 2 2018 Results Overview 3 Directors’ Report 30 Independent Auditor’s Report 33 Income Statement 34 Statement of Comprehensive Income 35 Balance Sheet 36 Statement of Changes in Equity 37 Cash Flow Statement 38 Notes to the Financial Statements 73 Directors’ Declaration 74 Corporate Governance Statement 81 Investor Relations 83 Members’ Information 84 Directory For personal use only Joint Chairman and Chief Executive Officer Letter to Securityholders Dear Securityholder We are pleased to provide this Annual Financial Report of our Group’s We describe our 41 centres as ‘living centres’ because they are performance in 2018. extraordinary places where our customers come to gather and socialise, be entertained, dine, access services and experiences and Scentre Group was established in 2014 and our purpose has remained shop. Our ability to curate a product, service and experience offer constant ever since: ‘creating extraordinary places, connecting and that meets customers’ expectations is what sets us apart and enables enriching communities’. Our purpose has guided our culture and us to deliver annual sales of $24 billion, high levels of customer decision-making as we have grown our business into an extraordinary advocacy and annual customer visitation of 535 million, up 5 million. platform of 41 Westfield living centres which is now the 15th largest This consistently high visitation is unrivalled. entity on the ASX by market capitalisation. These factors explain why our occupancy has remained strong at Our financial performance for the year ended 31 December 2018 was 99.3%. Extraordinary retail partners who understand their customers strong with Funds From Operations (FFO) of $1.3 billion representing want to be located in extraordinary places that enjoy high visitation. 25.24 cents per security, up 3.9% and a distribution of 22.16 cents We continue to work closely with our retail partners to help them per security, up 2%. Statutory profit for the period was $2.3 billion better understand the value of physical stores and the role they play including a revaluation uplift of $1.1 billion. Scentre Group has total in attracting and retaining customers, building brands and influencing assets of $39.1 billion and assets under management of $54.2 billion. in-store and on-line sales. During the year, we successfully completed more than $1.1 billion of As we deliver on our purpose, we do so with a responsible, developments and added more than 106,000 sqm to our living centre sustainable business mindset. We want our customers to regard us as portfolio through projects at Westfield Plenty Valley in Melbourne; an essential part of their communities. During the year, we launched Westfield Carousel in Perth; Westfield Coomera on Queensland’s a new community grants and recognition program called Westfield Gold Coast, our first greenfield centre; Westfield Kotara in Newcastle; Local Heroes. Our 117 inaugural Westfield Local Heroes each received and Westfield Tea Tree Plaza in Adelaide. Each of these developments a grant of $10,000, totalling $1.17 million, to further their vital work in has enhanced the customer experience and contributed to high levels addressing social needs in our local communities. We will launch the of customer advocacy. The Group commenced the redevelopment second year of the program in March 2019. of Westfield Newmarket in Auckland in 2018 and is on track to complete this in late 2019, creating another extraordinary place for Retail continues to be a dynamic sector and the Board, management our customers to connect, gather, experience and shop. and our people are working hard to keep abreast of issues that may affect the Group. Given Scentre Group’s leadership position in the Our purpose encapsulates how we create a long-term sustainable sector, the pre-eminent quality of our living centres and management’s business that satisfies the needs of diverse stakeholders including focus on adapting to the constantly evolving retail landscape and our people, securityholders, partners, suppliers, customers delivering a superior customer experience which drives strong and communities. visitation and customer advocacy, our long-term view for the business The connection between purpose, people and performance is critical is positive. for our business as we continue to rise to the challenge of meeting We would like to thank you for your ongoing support of Scentre Group. dynamic customer expectations. We also thank our people for their commitment during 2018 Our organisational culture is led from the top and we engage with our and contributing to this year’s financial results. Our purpose will people on the most important issues for our business in many ways. continue to guide our execution in the year ahead as we keep Board members meet regularly with key members of the leadership creating extraordinary living centres that play an integral role in our team, participate in asset tours of our centres and attend development customers’ lives. openings where possible. Our people engage directly with the leadership team on issues that matter to them in informal and formal ways including ‘Team Talks’ which are broadcast live and accessible to all. We host live broadcasts from major development openings to bring our people closer to the latest ‘extraordinary place’ we have created. As CEO, Peter has a direct engagement program that includes meetings with new employees every quarter and lunches with new parents and their children to keep them connected to the workplace whilst on parental leave. We continue to make progress on our vision to be the place where talent thrives. Our focus on leadership and diversity and inclusion has contributed to high levels of employee engagement. Last measured in 2017, at 88% our engagement level places us in the top 2% of high Brian Schwartz AM Peter Allen performing companies globally.