ASX:VCX

Stock Analysis Report

Executive Summary

Vicinity Centres (Vicinity) is one of Australia’s leading retail property groups.


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

How has Vicinity Centres's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VCX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.4%

VCX

5.0%

AU REITs

5.1%

AU Market


1 Year Return

-56.8%

VCX

-31.5%

AU REITs

-19.0%

AU Market

Return vs Industry: VCX underperformed the Australian REITs industry which returned -31.8% over the past year.

Return vs Market: VCX underperformed the Australian Market which returned -19.2% over the past year.


Shareholder returns

VCXIndustryMarket
7 Day11.4%5.0%5.1%
30 Day-50.2%-36.8%-20.9%
90 Day-57.3%-35.2%-25.6%
1 Year-54.1%-56.8%-28.3%-31.5%-15.4%-19.0%
3 Year-55.3%-62.8%-11.8%-24.4%-3.3%-16.6%
5 Yearn/a12.8%-12.3%6.9%-17.3%

Price Volatility Vs. Market

How volatile is Vicinity Centres's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Vicinity Centres undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VCX (A$1.08) is trading below our estimate of fair value (A$3.7)

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


Price To Earnings Ratio

PE vs Industry: VCX is poor value based on its PE Ratio (11.5x) compared to the REITs industry average (9x).

PE vs Market: VCX is good value based on its PE Ratio (11.5x) compared to the Australian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: VCX is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: VCX is good value based on its PB Ratio (0.4x) compared to the AU REITs industry average (0.8x).


Next Steps

Future Growth

How is Vicinity Centres forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VCX's forecast earnings growth (11.8% per year) is above the savings rate (1.1%).

Earnings vs Market: VCX's earnings (11.8% per year) are forecast to grow faster than the Australian market (10.2% per year).

High Growth Earnings: VCX's earnings are forecast to grow, but not significantly.

Revenue vs Market: VCX's revenue is expected to decline over the next 3 years (-2.9% per year).

High Growth Revenue: VCX's revenue is forecast to decline over the next 3 years (-2.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VCX's Return on Equity is forecast to be low in 3 years time (5.3%).


Next Steps

Past Performance

How has Vicinity Centres performed over the past 5 years?

-3.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VCX has a large one-off loss of A$218.3M impacting its December 31 2019 financial results.

Growing Profit Margin: VCX's current net profit margins (27.9%) are lower than last year (51%).


Past Earnings Growth Analysis

Earnings Trend: VCX's earnings have declined by -3.9% per year over the past 5 years.

Accelerating Growth: VCX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VCX had negative earnings growth (-49.3%) over the past year, making it difficult to compare to the REITs industry average (1.7%).


Return on Equity

High ROE: VCX's Return on Equity (3.1%) is considered low.


Next Steps

Financial Health

How is Vicinity Centres's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: VCX has a high level of physical assets or inventory.

Debt Coverage by Assets: VCX's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

Asset Level: VCX's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if VCX has a sufficient allowance for bad loans.

Low Risk Liabilities: VCX reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if VCX has an acceptable proportion of non-loan assets held.

Low Risk Deposits: VCX has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if VCX has an appropriate level of bad loans.


Next Steps

Dividend

What is Vicinity Centres's current dividend yield, its reliability and sustainability?

14.33%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: VCX's dividend (14.33%) is higher than the bottom 25% of dividend payers in the Australian market (3.17%).

High Dividend: VCX's dividend (14.33%) is in the top 25% of dividend payers in the Australian market (8.1%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VCX has been paying a dividend for less than 10 years.

Growing Dividend: VCX has only been paying a dividend for 5 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (89.3%), VCX's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VCX's dividends in 3 years are forecast to be thoroughly covered by earnings (0.02% payout ratio).


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Grant Lewis Kelley (54yo)

2.25s

Tenure

AU$2,266,341

Compensation

Mr. Grant Lewis Kelley has been the Chief Executive Officer, Managing Director and Director of Vicinity Centres since January 01, 2018. Mr. Kelley had been the Chief Executive Officer at City Developments  ...


CEO Compensation Analysis

Compensation vs Market: Grant Lewis's total compensation ($USD1.36M) is below average for companies of similar size in the Australian market ($USD2.52M).

Compensation vs Earnings: Grant Lewis's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Grant Lewis Kelley
CEO, MD & Director2.25yrsAU$2.27m0.0085% A$339.0k
Peter Huddle
Chief Operating Officer1.08yrsAU$1.45mno data
Nicholas Schiffer
Chief Financial Officer0.58yrno datano data
Ian Padgham
Acting Chief Information Officer1.25yrsno datano data
Penny Berger
Head of Investor Relationsno datano datano data
Carolyn Reynolds
General Counsel & Company Secretaryno datano datano data
Katherine Rellos
Head of Corporate Communicationsno datano datano data
Tanya Southey
Chief People & Culture Officer0.50yrno datano data
Justin Mills
Chief Strategy Officer1.33yrsno datano data
Carolyn Viney
Chief Development Officer1.25yrsno datano data

1.3yrs

Average Tenure

Experienced Management: VCX's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Grant Lewis Kelley
CEO, MD & Director2.25yrsAU$2.27m0.0085% A$339.0k
Timothy Edward Hammon
Independent Non-Executive Director8.33yrsAU$226.60k0.0013% A$53.6k
Trevor Gerber
Independent Chairman of the Board0.42yrAU$206.00k0.0040% A$161.1k
David Thurin
Non-Executive Director4.83yrsAU$185.40k0.37% A$14.9m
Peter Kahan
Independent Non Executive Directorno dataAU$226.60k0.00089% A$35.6k
Clive Appleton
Non-Executive Director1.58yrsAU$137.33k0.00087% A$34.8k
Karen Lee Penrose
Independent Non-Executive Director4.83yrsAU$226.60k0.0013% A$51.2k
Janette Kendall
Independent Non-Executive Director2.33yrsAU$185.40k0.0011% A$45.6k

2.3yrs

Average Tenure

60yo

Average Age

Experienced Board: VCX's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: VCX insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Vicinity Centres's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Vicinity Centres
  • Ticker: VCX
  • Exchange: ASX
  • Founded:
  • Industry: Retail REITs
  • Sector: Real Estate
  • Market Cap: AU$3.998b
  • Shares outstanding: 3.72b
  • Website: https://www.vicinity.com.au

Number of Employees


Location

  • Vicinity Centres
  • Chadstone Tower One
  • Level 4
  • Chadstone
  • Victoria
  • 3148
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VCXASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDJun 2015
CNRA.FOTCPK (Pink Sheets LLC)YesStapled SecuritiesUSUSDJun 2015
VCXCHIA (Chi-X Australia)YesStapled SecuritiesAUAUDJun 2015
C98DB (Deutsche Boerse AG)YesStapled SecuritiesDEEURJun 2015

Biography

Vicinity Centres (Vicinity) is one of Australia’s leading retail property groups. With a fully integrated asset management platform and $26 billion in retail assets under management across 63 shopping centres, it is the second largest listed manager of Australian retail property. Vicinity has a Direct Portfolio with interests in 59 shopping centres (including the DFO Brisbane business) and manages 31 assets on behalf of Strategic Partners, 27 of which are co-owned by Vicinity. Vicinity is listed on the Australian Securities Exchange (ASX) under the code ‘VCX’ and has over 23,000 securityholders. Vicinity also has European medium term notes listed on the ASX under the code ‘VCD’. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/05 10:37
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.