Earnings call transcript: Waypoint REIT posts H1 2026 earnings growth as shares slip

Waypoint REIT reported a 3.4% increase in first-half distributable earnings, with net tangible assets rising marginally. However, the stock fell 0.41% to $2.40 as investors considered elevated interest costs, a lackluster property transaction market and lower expectations for the second half. The Australia-based fuel and convenience property trust reaffirmed its full-year dividend guidance at AUD 0.1714 per security, highlighting strong lease renewals and near-target lowering of gearing.

Distributable earnings per security amounted to AUD 8.59 cents, a 3.4% rise year-on-year, while net tangible assets per security stood at AUD 2.92. The company's debt-to-equity ratio remained at 88%, consistent with its gearing level. Weighted average cap rate saw a 10 basis point increase, and gearing stood near the lower end of its target range, at 32.4%.

Liquidity was approximately AUD 100 million. The trust generated AUD 8.59 cents in distributable earnings per security, up 3.4% from the previous year, driven by rental growth, portfolio revaluations, and cost control. However, higher interest expenses partially offset these gains. CEO Hadyn Stephens noted that while the first-half result reflected earnings growth, the second half may be slightly weaker due to factors such as higher hedging costs and limited progress on non-core asset sales.

The trust aims to sell AUD 10 million to AUD 20 million of non-core assets in 2026, contingent on market opportunities. Waypoint also emphasized its focus on 33 leases expiring in 2027, which are believed to be under-rented based on independent valuer advice.