Shopping Centres Australasia Property Group (ASX:SCP) - Share price, News & Analysis

Q: What is the Fair Price of SCP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SCP (A$2.93) is trading below our estimate of [[fair value]] (A$4.73)

SCP fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	5/6
Financial Health	2/6
Dividends	3/6

SCP Stock Overview

SCA Property Group (SCP) includes two internally managed real estate investment trusts owning a portfolio of quality neighbourhood and sub-regional shopping centres located across Australia.

Rewards

Trading at 38.1% below our estimate of its fair value

Revenue is forecast to grow 5.65% per year

Earnings grew by 706.9% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 25.2% per year for the next 3 years

Debt is not well covered by operating cash flow

Unstable dividend track record

Large one-off items impacting financial results

+ 1 more risk

Shopping Centres Australasia Property Group Competitors

HomeCo Daily Needs REIT

ASX:HDN

AU$2.8b

BWP Trust

ASX:BWP

AU$2.6b

Waypoint REIT

ASX:WPR

AU$1.8b

Charter Hall Retail REIT

ASX:CQR

AU$2.3b

Price History & Performance

Summary of all time highs, changes and price drops for Shopping Centres Australasia Property Group
Historical stock prices
Current Share Price	AU$2.93
52 Week High	AU$3.16
52 Week Low	AU$2.56
Beta	0.34
1 Month Change	3.53%
3 Month Change	1.03%
1 Year Change	12.69%
3 Year Change	13.57%
5 Year Change	32.58%
Change since IPO	103.47%

Shareholder Returns

	SCP	AU REITs	AU Market
7D	-0.3%	-1.2%	0.7%
1Y	12.7%	-9.7%	-8.0%

Return vs Industry: SCP exceeded the Australian REITs industry which returned -9.7% over the past year.

Return vs Market: SCP exceeded the Australian Market which returned -8% over the past year.

Price Volatility

Is SCP's price volatile compared to industry and market?
SCP volatility
SCP Average Weekly Movement	3.4%
REITs Industry Average Movement	4.1%
Market Average Movement	10.5%
10% most volatile stocks in AU Market	17.6%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: SCP is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SCP's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2012	n/a	Anthony Michael Mellowes	https://www.scaproperty.com.au

SCA Property Group (SCP) includes two internally managed real estate investment trusts owning a portfolio of quality neighbourhood and sub-regional shopping centres located across Australia. The SCA Property Group invests in shopping centres predominantly anchored by non-discretionary retailers, with long term leases to tenants such as Woolworths Limited, Coles Group Limited and companies in the Wesfarmers Limited group. The SCA Property Group is a stapled entity comprising Shopping Centres Australasia Property Management Trust (ARSN 160 612 626) and Shopping Centres Australasia Property Retail Trust (ARSN 160 612 788).

Shopping Centres Australasia Property Group Fundamentals Summary

How do Shopping Centres Australasia Property Group's earnings and revenue compare to its market cap?
SCP fundamental statistics
Market Cap	AU$3.21b
Earnings (TTM)	AU$792.40m
Revenue (TTM)	AU$332.20m

4.1x

P/E Ratio

9.8x

P/S Ratio

Is SCP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SCP income statement (TTM)
Revenue	AU$332.20m
Cost of Revenue	AU$110.60m
Gross Profit	AU$221.60m
Other Expenses	-AU$570.80m
Earnings	AU$792.40m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 16, 2022

Earnings per share (EPS)	0.71
Gross Margin	66.71%
Net Profit Margin	238.53%
Debt/Equity Ratio	51.7%

How did SCP perform over the long term?

See historical performance and comparison

Dividends

4.9%

Current Dividend Yield

74%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SCP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SCP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SCP. This is calculated by dividing SCP's market cap by their current preferred multiple.
What is SCP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$3.21b

SCP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	24x
Enterprise Value/EBITDA	n/a
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does SCP's PE Ratio compare to its peers?

SCP PE Ratio vs Peers

The above table shows the PE ratio for SCP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.8x
HDN HomeCo Daily Needs REIT	65.7x	26.4%	AU$2.8b
BWP BWP Trust	5.4x	-36.6%	AU$2.6b
WPR Waypoint REIT	4.1x	-40.0%	AU$1.8b
CQR Charter Hall Retail REIT	4x	-14.4%	AU$2.3b
SCP Shopping Centres Australasia Property Group	4.1x	-25.2%	AU$3.2b

Price-To-Earnings vs Peers: SCP is good value based on its Price-To-Earnings Ratio (4.1x) compared to the peer average (19.8x).

Price to Earnings Ratio vs Industry

How does SCP's PE Ratio compare vs other companies in the AU REITs Industry?

Price-To-Earnings vs Industry: SCP is good value based on its Price-To-Earnings Ratio (4.1x) compared to the Australian REITs industry average (6.7x)

Price to Earnings Ratio vs Fair Ratio

What is SCP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SCP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4.1x
Fair PE Ratio	8.1x

Price-To-Earnings vs Fair Ratio: SCP is good value based on its Price-To-Earnings Ratio (4.1x) compared to the estimated Fair Price-To-Earnings Ratio (8.1x).

Share Price vs Fair Value

What is the Fair Price of SCP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SCP (A$2.93) is trading below our estimate of fair value (A$4.73)

Significantly Below Fair Value: SCP is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is lower than the current share price.

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Future Growth

How is Shopping Centres Australasia Property Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-25.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCP's earnings are forecast to decline over the next 3 years (-25.2% per year).

Earnings vs Market: SCP's earnings are forecast to decline over the next 3 years (-25.2% per year).

High Growth Earnings: SCP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SCP's revenue (5.7% per year) is forecast to grow faster than the Australian market (5.6% per year).

High Growth Revenue: SCP's revenue (5.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SCP's Return on Equity is forecast to be low in 3 years time (5.8%).

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Past Performance

How has Shopping Centres Australasia Property Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

17.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SCP has a large one-off gain of A$640.6M impacting its December 31 2021 financial results.

Growing Profit Margin: SCP's current net profit margins are higher than last year (34.4%).

Past Earnings Growth Analysis

Earnings Trend: SCP's earnings have grown by 17% per year over the past 5 years.

Accelerating Growth: SCP's earnings growth over the past year (706.9%) exceeds its 5-year average (17% per year).

Earnings vs Industry: SCP earnings growth over the past year (706.9%) exceeded the REITs industry 182.6%.

Return on Equity

High ROE: SCP's Return on Equity (25.1%) is considered high.

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Financial Health

How is Shopping Centres Australasia Property Group's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SCP's short term assets (A$380.3M) exceed its short term liabilities (A$159.3M).

Long Term Liabilities: SCP's short term assets (A$380.3M) do not cover its long term liabilities (A$1.6B).

Debt to Equity History and Analysis

Debt Level: SCP's net debt to equity ratio (51.1%) is considered high.

Reducing Debt: SCP's debt to equity ratio has increased from 49.1% to 51.7% over the past 5 years.

Debt Coverage: SCP's debt is not well covered by operating cash flow (10.5%).

Interest Coverage: SCP's interest payments on its debt are well covered by EBIT (12.6x coverage).

Balance Sheet

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Dividend

What is Shopping Centres Australasia Property Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

4.91%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SCP's dividend (4.91%) is higher than the bottom 25% of dividend payers in the Australian market (2.65%).

High Dividend: SCP's dividend (4.91%) is low compared to the top 25% of dividend payers in the Australian market (6.3%).

Stability and Growth of Payments

Stable Dividend: SCP has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SCP's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (73.9%), SCP's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (93.4%), SCP's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

9.0yrs

Average management tenure

CEO

Anthony Michael Mellowes

9.75yrs

Tenure

AU$1,969,988

Compensation

Mr. Anthony Michael Grainger Mellowes serves as the Chief Executive Officer at Shopping Centres Australasia Property Group Re Limited, a Responsible Entity of Shopping Centres Australasia Property Group si...

CEO Compensation Analysis

Compensation vs Market: Anthony Michael's total compensation ($USD1.38M) is about average for companies of similar size in the Australian market ($USD1.56M).

Compensation vs Earnings: Anthony Michael's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: SCP's management team is seasoned and experienced (9 years average tenure).

Board Members

Experienced Board: SCP's board of directors are considered experienced (7.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30